Appraisal Report — Fontana City Council, September 26, 2023

APPRAISAL REPORT

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 100
(Victoria)

City of Fontana, San Bernardino County, California
(Appraisers’ File No. 2023-1283)

Prepared For
City of Fontana
8353 Sierra Avenue
Fontana, California 92335

Prepared By
Kitty Siino & Associates, Inc.
115 East Second Street, Suite 100
Tustin, California 92780

KITTY SIINO & ASSOCIATES, INC.

REAL ESTATE APPRAISERS & CONSULTANTS

August 22, 2023

Jessica Brown, Chief Financial Officer
City of Fontana
8353 Sierra Avenue
Fontana, CA 92335

Reference: Appraisal Report
City of Fontana Community Facilities District No. 100 (Victoria) Aurora Park by TriPointe Homes
Southwest Corner of Victoria Street and Kestrel Drive,
East of Interstate 15, Fontana, California

Dear Ms. Brown:

At the request and authorization of the City of Fontana, we have completed an Appraisal Report for The City of Fontana Community Facilities District No. 100 (Victoria) (“Fontana CFD No. 100”) which consists of a gated residential community known as Aurora Park , in the City of Fontana .

Aurora Park includes a total of 193 residential units split between two product lines , Sienna at Aurora Park (“Sienna”) and Goldenrod at Aurora Park (“Goldenrod”). Sienna is proposed for 82 detached alley load units and Goldenrod is proposed for 111 detached cluster units; all homes are detached condominiums. TriPointe Homes Holdings, Inc. ("TriPointe") has an agreement with Rescal Victoria 193, LLC (dba “Resmark”), in which Resmark purchased the subject lands, and TriPointe has been purchasing “takedowns” of phases in a land banking agreement. Resmark and TriPointe also have an executed Construction agreement and take down schedule detailing the partnership. TriPointe is developing and marketing the property and the majority of these takedowns have occurred. Aurora Park offers two-story floorplans ranging in size from 1,879 to 2,264 square feet for Sienna (ally load product), and 2,006 to 2,743 square feet for Goldenrod (cluster product). Out of the 193 proposed units within Aurora Park, 72 have closed to individual homeowners to date with an additional 19 in escrow which are due to close upon completion. The TriPointe-owned property ranges from completed model homes to houses under construction while the Resmark owned property is all physically finished lots/pads.

The valuation method s used in this report are the Sales Comparison Approach, a Discounted Cash Flow Analysis and a Mass Appraisal Technique as defined within this report. The fee simple estate of the subject property has been valued, subject to the Fontana CFD No. 100 special tax lien. This report is written with the hypothetical condition that the subject propert y is enhanced by the improvements and/or fee credits to be funded by the Special Tax Bonds of Fontana CFD No. 100. As a result of our investigation, the concluded minimum market value for the subject property is shown below.

Aurora Park:

Resmark Ownership (78 pads) $ 15,064,993
TriPointe Ownership (27 lots/pads & 16 houses) $ 12,152,143 Individual Owners (72 houses) $ 43,783,946
Total Aggregate Value CFD No. 100 $ 71,001,082

The values are stated subject to the Assumptions and Limiting Conditions of this report, the Appraiser’s Certification and as of July 17, 2023.

115 East Second Street, Suite 100, Tustin, California 92780 (714) 544-9978 - Phone, (714) 544-9985 – Fax, E-Mail: [email protected] Jessica Brown
City of Fontana
August 22, 2023
Page Two

Some supporting documentation concerning the data, reasoning and analyses may be retained in the appraiser’s files. The information contained in this report is specific to the needs of the client and for the intended use stated in this report. This Appraisal Report is intended to comply with both the Uniform Standards of Professional Appraisal Practice (“USPAP” January 2020) and with the Appraisal Standards of the California Debt and Investment Advisory Commission (“CDIAC”). The appraiser is not responsible for unauthorized use of this report.

This letter of transmittal is part of the attached report, which sets forth the data and analyses upon which our opinion of value is, in part, predicated.

Respectfully submitted,

KITTY SIINO & ASSOCIATES, INC.

Kitty S. Siino, MAI
California State Certified General
Real Estate Appraiser (AG004793)

TABLE OF CONTENTS

Assumptions and Limiting Conditions............................................................................... i Hypothetical Condition .................................................................................................... iii Extraordinary Assumption ............................................................................................... iii Aerial Photo of Fontana CFD No. 100 (Aurora Park) ...................................................... iv Purpose of the Appraisal ................................................................................................ 1 The Subject Property ...................................................................................................... 1 Intended Use of the Report ............................................................................................. 3 Definitions ...................................................................................................................... 3 Property Rights Appraised ............................................................................................. 5 Effective Date of Value ................................................................................................... 5 Date of Report ................................................................................................................ 6 Scope of Appraisal ........................................................................................................ 6 Regional Area Map.......................................................................................................... 8 County of San Bernardino Area Description ................................................................... 9 City of Fontana Area Map & Description ....................................................................... 17 Immediate Surroundings ............................................................................................... 23 Community Facilities District No. 100 ........................................................................... 26 Subject Property Description ......................................................................................... 29 Inland Empire Housing Market ...................................................................................... 38 Highest and Best Use Analysis ..................................................................................... 49 Valuation Analysis and Conclusions ............................................................................. 54 Appraisal Report Summary ........................................................................................... 74 Appraiser’s Certification ............................................................................................... 75

ADDENDA
Fontana CFD No. 100 Boundary Map
Tract Map No. 20229 and Condominium Maps
Discounted Cash Flow Analysis
Finished Lot Land Sales Map and Summary Chart
Improved Residential Sales Map and Summary Chart
Appraiser’s Qualifications
_________________________________________________________________________________________________________ Appraisal Report
City of Fontana CFD No. 100 (Victoria) - Aurora Park by TriPointe Homes Kitty Siino & Associates, Inc. Page i

ASSUMPTIONS AND LIMITING CONDITIONS

1. This report might not include full discussions of the data, reasoning and analyses that were used in the appraisal process to develop the appraiser’s opinion of value. Some supporting documentation concerning the data, reasoning and analyses may be retained in the appraiser’s files. The information contained in this report is specific to the needs of the client and for the intended use stated in this report. The appraiser is not responsible for unauthorized use of this report.

2. No responsibility is assumed for legal or title considerations. Title to the property is assumed to be good and marketable unless otherwise stated in this report.

3. It is assumed that the subject property is subject to the special tax lien of Fontana CFD No. 100.

4. Responsible ownership and competent property management are assumed unless otherwise stated in this report.

5. The information furnished by others is believed to be reliable; however, no warranty is given for its accuracy.

6. All engineering is assumed to be correct. Any plot plans and illustrative material used in this report are included only to assist the reader in visualizing the property and may not be to scale.

7. It is assumed that there are no hidden or unapparent conditions of either property, subsoil or structures that would render them more or less valuable. No responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them.

8. It is assumed that there is full compliance with all applicable federal, state and local environmental regulations and laws unless otherwise stated in this report.

9. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless nonconformity has been stated, defined and considered in this appraisal report.

10. It is assumed that all required licenses, certificates of occupancy or other legislative or administrative authority from any local, state or national governmental or private entity or organization have been or can be obtained or renewed for any use on which the value estimates contained in this report are based.

11. Any sketch or photograph included in this report may show approximate dimensions and is included only to assist the reader in visualizing the properties. Maps , photographs and exhibits found in this report are provided for reader reference purposes only. No guarantee regarding accuracy is expressed or implied unless _________________________________________________________________________________________________________ Appraisal Report
City of Fontana CFD No. 100 (Victoria) - Aurora Park by TriPointe Homes Kitty Siino & Associates, Inc. Page ii
otherwise stated in this report. No survey has been made for the purpose of this report.

12. It is assumed that the utilization of the land and improvements (if any) are within the boundaries or property lines of the property described and that there is no encroachment or trespass unless otherwise stated in this report.

13. The appraiser is not qualified to detect hazardous waste and/or toxic materials. Any comment by the appraiser that might suggest the possibility of the presence of such substances should not be taken as confirmation of the presence of hazardous waste and/or toxic materials. Such determination would require investigation by a qualified expert relating to asbestos, urea- formaldehyde foam insulation or other potentially hazardous materials that may affect the value of the property. The appraiser’s value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value unless otherwise stated in this report. No responsibility is assumed for any environmental conditions or for any expertise or engineering knowledge required to discover them. The appraiser’s descriptions and resulting comments are the result of the routine observations made during the appraisal process.

14. Proposed improvements, if any, are assumed to be completed in a good workmanlike manner in accordance with the submitted plans and specifications.

15. The distribution, if any, of the total valuation in this report between land and improvements applies only under the stated program of utilization. The separate allocations for land and buildings , if any, must not be used in conjunction with any other appraisal and are invalid if so used.

16. The Americans with Disabilities Act (“ADA”) became effective on January 26, 1992 and have been updated several times since then. The appraiser has made no specific compliance survey and analysis of the property to determine whether they conform to the various detailed requirements of the ADA, nor is the appraiser a qualified expert regarding the requirements of the ADA. It is possible that a compliance survey of the property, together with a detailed analysis of the requirements of the ADA, could reveal that the property is not in compliance with one or more of the requirements of the ADA. If so, this fact could have a negative effect upon the value of the property.

Since the appraiser has no direct evidence relating to this issue, a possible noncompliance with requirements of the ADA in estimating the value has not been considered.

17. It is assumed there are no environmental concerns that would slow or thwart development of the subject properties and that the soils are adequate to support the highest and best use conclusions.

18. Possession of this report, or a copy thereof, does not carry with it the right of publication. It may not be used for any purpose by any person other than the party to whom it is addressed without the written consent of the appraiser, and in any event, only with proper qualification and only in its entirety. Permission is given for this appraisal to be published as a part of the Official Statement or similar document for the Fontana CFD No. 100 special tax bonds

19. It is assumed that there are no conditions of approval or hindrances which could slow or thwart the obtaining of occupancy permits on the 193 subject residential units. This is the case per TriPointe.

HYPOTHETICAL CONDITION

1. It is assumed that all improvements and benefits to the subject properties, which are to be funded by the City of Fontana CFD No. 100 Special Tax Bond Proceeds are completed and in place.

EXTRAORDINARY ASSUMPTION

1. It is assumed that the sales information and remaining development costs as reported by the builder and summarized in the report are correct. Regarding sales, we have reviewed samples of closed sales against public record when available.

Differences occur between the builder’s sales information and public record. It is the appraiser’s understanding that the differences equate to the closing cost concessions which are given by the builder on a case- by-case basis. Regarding costs; while we have reviewed the remaining land development costs and fees and they appear reasonable; we are not experts in the field of construction estimation and are relying on the costs received in the valuation analysis.

PURPOSE OF THE APPRAISAL

The purpose of this appraisal report is to estimate the value of the fee simple interest of the subject property, subject to the lien of the Fontana CFD No. 100 Special Tax Bonds.

THE SUBJECT PROPERTY

The subject property consists of 193 proposed single-family detached homes being developed into a gated community known as Aurora Park in the City of Fontana (“City”).

Aurora Park is located at the southwest corner of Victoria Street and Kestrel Drive, just east of Interstate 15 (“I-15”). Aurora Park is being built and sold by TriPointe Homes, and features two product lines: Sienna which includes 82 detached alley load units sized 1,879 to 2,264 square feet, and Goldenrod which includes 111 detached cluster units sized from 2,006 to 2,743 square feet. The subject community is encompassed by Tract Map 20229 and subsequent condominium maps , which subdivide the property into 82 pads for alley-loaded detached condominiums, and 111 pads for cluster detached condominiums. TriPointe has an agreement with Resmark, who owned the property, with TriPointe acquiring certain lots/pads as needed for development. Of the total 19 3 lots/pads, TriPointe has taken down 115 of the lots/pads and has sold and closed on 72 of the completed houses to individuals. The remaining lots vary in status from completed models, to under homes construction to finished lots. The description, ownership and condition of the lands are detailed in the chart on the following page.

Lots Owner Product / Condition / Status
Sienna at Aurora Park (Ally Load Small Lot Detached) Lot 1 of Tract 20229: Modules A, AA, C, E.

G. I. K, M, O, Q, S and U
Units 58-61 and 185-189 of
Module G; Units 157-162 and
170-172 of Module A; Units
163-166 and 173-176 of Module
C; Units 167-169 and 177-178
and 190-193 of Module E
35 Individuals Completed Homes
Units 108-110 of Module AA 3 TriPointe Model Homes (0 in Escrow) Units 55-57 and 179-184 of
Module I 9 TriPointe Over 95% Complete (9 in Escrow)
Units 86-90 of Module K 5 TriPointe Under Construction (5 in Escrow) Units 91-93 and 121-123 of
Module M 6 TriPointe Finished Lots (0 in Escrow)
Units 94-97 and 119-120 of
Module O; Units 98-101 and
117-118 of Module Q; Units
102-105 and 113-116 of Module
S; Units 106-107 and 111-112
of Module U
24 Resmark
(Land Bank) Finished Lots (0 in Escrow)
Sienna Subtotal: 82
Goldenrod at Aurora Park (Cluster Small Lot Detached) Lot 1 of Tract 20229: Modules B, BB, D, F, H, J, L, N, P, R, T, V, W and X
Units 1-6 of Module J; Units 43-
48 and 62-65 of Module H;
Units 49-54 of Module F; Units
142-147 of Module B; Units
148-156 of Module D
37 Individuals Completed Homes
Units 139-141 of Module BB1 3 TriPointe Model Homes (0 in Escrow) Unit 136 of BB1 1 TriPointe Over 95% Complete (used as Sales Gallery)
Units 7-12 of Module L 6 TriPointe Under Construction (5 in Escrow) Units 13-18 and 82-85 of Module
N 10 TriPointe Finished Lots (0 in Escrow)
Units 19-24 and 78-81 of Module
P; Units 25-30 and 74-77 of
Module R; Units 31-36 and 70-
73 of Module T; Units 37-42 and
66-69 of Module V; Units 124-
129 of Module W; Units 130-
135 of Module X; Units 137-138
of Module BB1
54 Resmark
(Land Bank) Finished Lots (0 in Escrow)
Goldenrod Subtotal: 111
TOTAL CFD No. 100 193

INTENDED USE OF THE REPORT

It is the appraiser’s understanding that the client, the City of Fontana, will utilize this report in disclosure documents related to the sale of the Fontana CFD No. 100 Special Tax Bonds. This report may be included in the Official Statement or similar document to be distributed in connection with the marketing and offering of the bonds. It is the appraiser’s understanding that there are no other intended uses of this report.

DEFINITIONS

Market Value
The term “Market Value” as used in this report is defined as:

"The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

1. buyer and seller are typically motivated;

2. both parties are well informed or well advised, and each acting in what he or she considers his or her own best interest;

3. a reasonable time is allowed for exposure in the open market;

4. payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and

5. the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.”
1 Inherent in the Market Value definition is exposure time or the time the subject property would have been exposed on the open market prior to the appraisal in order to sell at the concluded values. In the case at hand and considering current market conditions , the exposure time for each individually owned property or the entire TriPointe or Resmark owned properties, each in a bulk sale, is less than one year.

1 The Appraisal of Real Estate, 13th Edition
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City of Fontana CFD No. 100 (Victoria) - Aurora Park by TriPointe Homes Kitty Siino & Associates, Inc. Page 4
Finished Lot/Pad
The term “Finished Lot/Pad” is defined as:
“A parcel which has legal entitlements created by a recorded subdivision or condominium map, whose physical characteristics are a fine graded level pad per lot /pad with infrastructure contiguous to each individual lot /pad, asphalt paved roads and the necessary utilities. This term assumes the payment of all applicable development fees with the exception of building permit and plan check fees.”

Minimum Market Value
The term “Minimum Market Value” as used in this report is defined as:

“The base market value of a new home. That is, most buyers purchase some upgrades, options and/or lot premiums when purchasing a new home.

The sales price for the new home typically includes the base price for the plan, plus any upgrades, options or lot premiums, less concessions, if any, which were given or paid for by the builder. The concluded minimum market value is for the base value of the plan only, not taking into consideration any upgrades, options or premiums.”

Mass Appraisal Technique
The term “Mass Appraisal” as used in this report is defined as:
“The process of valuing a universe of properties as of a given date using standard methodology employing common data and allowing for statistical testing”
2 In the case at hand, the statistical testing included reviewing all original builder sales and reviewing the Multiple Listing Service (“MLS”) for any resales and/or current listings of each plan type. In addition, we have determined the actual range of sales prices for each plan type which will be utilized in the valuation process . The search of the MLS resulted in no resales and one current resale listing within the subject property.

Hypothetical Condition
The term “Hypothetical Condition” is defined by USPAP as:
“A condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis”

2 USPAP 2018-2019 Edition
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The Hypothetical Condition within this report is that subject property is enhanced by the improvements and/or fee credits to be funded by bonds issued by Fontana CFD No. 100.

Extraordinary Assumptions
The term “Extraordinary Assumption” is defined by USPAP as:
“An assignment specific assumption as of the effective date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser’s opinions or conclusions”

There is one Extraordinary Assumption within this report which is that the sales information and the cost information as received from TriPointe are true and accurate.

Regarding the sales information, differences occur between the builder’s sales information and public record which, it is the appraiser’s understanding, equates to closing cost concessions which are given to the buyers on a case- by-case basis.

Regarding costs, we have reviewed the remaining land development costs and fees and they appear reasonable; however, we are not experts in the field of cost estimating. It should be noted that these costs were relied upon for the value conclusion and, if the remaining costs differ, it may change the value conclusion.

PROPERTY RIGHTS APPRAISED

The property rights being appraised are of a fee simple estate interest, subject to easements of record and subject to Fontana CFD No. 100. The definition of “fee simple estate” is defined as:
“absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.”
3 EFFECTIVE DATE OF VALUE

The subject property is valued as of July 17, 2023.

3 The Appraisal of Real Estate, 13th Edition
_________________________________________________________________________________________________________ Appraisal Report
City of Fontana CFD No. 100 (Victoria) - Aurora Park by TriPointe Homes Kitty Siino & Associates, Inc. Page 6

DATE OF REPORT

The date of this report is August 22, 2023.

SCOPE OF APPRAISAL

As previously stated, the purpose of this appraisal is to report the appraiser ’s best estimate of the market value for the subject property, Fontana CFD No. 100, which is known as the community of Aurora Park. TriPointe is the builder and is actively marketing the homes. Aurora Park offers two-story floorplans ranging in size from 1,879 to 2,264 square feet as marketed for Sienna (conventional small lot detached product), and 2,006 to 2,743 square feet for Goldenrod (detached cluster product). There are a total of 19 3 proposed homes within the subject. This appraisal will be presented in the following format:
• County of San Bernardino Description
• City of Fontana Description
• Immediate Surroundings Description
• Brief Description of Fontana CFD No. 100
• Subject Property Description
• Inland Empire Residential Market Analysis
• Highest and Best Use Analysis
• Valuation Procedure, Analysis and Conclusions
• Appraisal Report Summary

In valuing the subject propert y, the value estimates will be based upon the highest and best use conclusion using the Sales Comparison Approach. The Sales Comparison Approach to value is defined as:
“…a set of procedures in which a value indication is derived by comparing the property being appraised to similar properties that have been sold recently, then applying appropriate units of comparison and making adjustments to the sales prices of the comparables based on the elements of comparison. The Sales Comparison Approach may be used to value improved properties, vacant land or land being considered as though vacant; it is the most common and preferred method of land valuation when an adequate supply of comparables is available.” 4 4 Dictionary of Real Estate Appraisal, Fourth Edition, 2002 _________________________________________________________________________________________________________ Appraisal Report
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In the Sales Comparison Approach, market value is estimated by comparing properties similar to the subject that have recently been sold, are listed for sale or are under contract.

Neither a cost or income approach was utilized as they were not considered necessary to arrive at credible results. In addition, we have utilized a mass appraisal technique which included reviewing all builder sales and searching the MLS for any resales and/or resale listings.

The due diligence of this appraisal report included the following:

1. Compiled demographic information and related that data to the subject propert y to perform a feasibility/demand analysis.

2. Gathered and analyzed information on the subject marketplace, reviewed several real estate brokerage publications on historical and projected growth in the subject market and researched the micro- and macro- economic outlook within San Bernardino County and the Fontana area.

3. Inspected the subject property between July 1, 2023 and July 25, 2023.

4. Had the site flown by an aerial photographer on July 15, 2023.

5. Interviewed representatives from TriPointe and/or their consultants in order to obtain project information.

6. Reviewed a preliminary title report on the subject property.

7. Searched the area for relevant comparable residential land sales , inspected and verified each sale with a buyer or seller or broker familiar with the transaction.

8. Searched the area for relevant comparable new home residential projects, including sales prices and concessions and interviewed representatives from each comparable project.

9. Reviewed the sales brochure and website for the subject community.

10. Reviewed developer sales information on each home within each neighborhood in the community along with reviewing public record on sample lots in each community.

11. Reviewed Multiple Listing Service information to determine if there are any resales, pending resales or listings of resale homes.

REGIONAL AREA MAP

COUNTY OF SAN BERNARDINO AREA DESCRIPTION

Location
The subject property is located in the southwestern portion of San Bernardino County, in the northwestern portion of the City of Fontana. More specifically, Aurora Park is located less than 1,000 feet east of Interstate 15 (“I-15”), at the southwest corner of Victoria Street and Kestrel Drive.

San Bernardino County (the “County”) is the largest county in the United States by area containing over 20,100 square miles, and includes large expanses of undeveloped deserts, valleys, canyons and mountains with deserts comprising about 90 percent of the acreage. The County is a major beneficiary of outward urban pressure from Los Angeles, Orange and Riverside Counties. Although located at the periphery of most urban activity in Southern California, the southwestern portion of San Bernardino County has been a major growth area and is perceived by most observers as an area expected to continue to grow. Riverside and San Bernardino Counties are considered distinct from Los Angeles and Orange Counties, and belong to the same Metropolitan Statistical Area (“MSA”). This area, consisting of San Bernardino and Riverside Counties, is commonly referred to as the Inland Empire.

Transportation
The subject property is situated just east of I -15, approximately one- half mile south of Interstate 210 (“I-210”), and approximately four miles north of Interstate 10 (“I-10”). The I-15 and I-210 are the nearest interstates providing access to the subject . While the subject is nearly adjacent to the I-15, there is no on/off ramp from Victoria Street, so the nearest freeway access is via Baseline Avenue (one half mile south of the subject). From I-210, access is possible via Cherry Avenue (0.75 miles east) to Victoria Street. I-15 travels in a northerly/southerly direction and provides access to Barstow and Nevada to the north and San Diego to the south. I-10 begins from the west in Los Angeles and provides access into Arizona to the east. In the vicinity of the subject, I-210 provides additional east/west access about two miles north of I -10 beginning in Santa Clarita in Los Angeles County and provides access near the City of San Bernardino. The subject _________________________________________________________________________________________________________ Appraisal Report
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is located 1.5 miles north of the historical Route 66, the original Los Angeles to Chicago cross country route.

The County is served by Amtrak and Metrolink as well as several rail -freight lines. The Ontario International Airport provides regional international air service and is located approximately seven miles southwest of the subject property. San Bernardino International Airport is located approximately 1 5 miles southeast of the subject. In addition, the County has extensive trucking corridors along the previously referred to interstates, highways and state freeways.

Population
The County has experienced population growth for several decades and is anticipated to continue to do so in the foreseeable future. Per the California Department of Finance, the January 1, 2023 (latest available) County population was 2.182 million. This represents a one-year increase of 0. 1 percent. This compares to an average annual growth rate over the past 20 years of 2.1 percent. Current projections for San Bernardino County per the California Department of Finance suggest the population is anticipated to reach approximately 2.32 milli on by 2030, indicating an average annual increase of approximately 0.90 percent over the next seven years. The current near zero growth rate is lower than t he previous 20- year annual average of 2.1 percent, likely due to the disruption of the COVID pandemic. The future growth of 0. 90 percent annually was predicted assuming a more stable market than was seen prior to the Great Recession, however doesn’t take into effect the COVID pandemic.

Economy
The U.S. economy is experiencing challenging times due to reactions from the COVID recession. These economic challenges include significant inflation, increasing interest rates, banks’ instability and reaching an agreement on the debt ceiling. During COVID , the Federal, State, County and City Governments (“Governments”) originally shut down non-essential businesses and areas where social gatherings occur in order to slow the spread of the virus. This created a strain on small and large businesses alike. Restaurants _________________________________________________________________________________________________________ Appraisal Report
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and hotels were hit hard and travel reduced drastically as citizens were urged to stay home. Layoffs occurred with reports of 40 million people filing for unemployment the first few months of the pandemic. The Governments attempted to curtail the job losses and hardships with the approval of over 5.6 trillion in COVID relief to our nation. In addition, the Federal Reserve Board (“Board”) reduced interest rates and started quantitative easing by buying bonds. This legislation helped shore up the U.S. economy ; however, due to the significant amount of new money introduced into the economy, inflation began occurring at a rate not seen for 40 years. As of June 2023, the national inflation rate was at a two year low at 2.97 percent; down from February 2023’s 6.0 percent and from the peak in June 2022 of 9.1 percent. This compares to a 1.24 annual percent rate for 2020 and an average of 1.74 percent annual rate for the previous ten years. Whether it is a result of the Russian/Ukraine war, supply chain issues due to COVID or from the additional money entering the economy, inflation is hitting Americans hard.

In an effort to curb inflation, the Federal Reserve Board began raising interest rates. Since March 2022, there have been ten interest rate increases rising the Federal Funds Rate (“FRR”) from 0.25 – 0.50 percent to 5.0 – 5.25 percent. While these increases appeared to help slow inflation, the quick, significant increases have strained bank balance sheets.

Three major banks failed in early 2023 with the government taking unprecedented action to help shore them up. At the most recent Board meeting (June 14, 2023) they paused the increases; however, additional minimal increases are expected later in the year. In addition to causing bank instability, the FRR increases over the past 15 months increased a typical 30-year fixed mortgage rate from 2.98 percent as of November 10, 2021, to 7.08 percent as of November 10, 2022; however, the rate has dropped to 6. 96 percent as of July 13, 2023 (per Federal Reserve Economic Data-St. Louis). This steep increase over the past 15 months has significantly affected the real estate market.

The COVID disruption to the economy also caused extreme volatility in the stock market with the Dow Jones Industrial Average (“DJIA”) dropping from 29,398 in February 2020 to 19,174 in March, 2020, a drop of 37 percent. The Government interventions resulte d in a bounce back in the DJIA to 27,111 by June 2020 with the stock market then climbing _________________________________________________________________________________________________________ Appraisal Report
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up to an all-time high of 36,799 in January 2022. In February 2022, Russia began invading Ukraine which caused volatility in world economics followed by U.S. inflation, interest rate increases and instability in the U.S. due to the debt ceiling being reach ed. All of these factors caused a drop in the DJIA of nearly seven percent from January 2022 to July 13, 2023 (34, 395). The nation’s debt limit can only be increased through government approvals. The current partisanship in our government caused a stand- off in increasing the debit limit which was in danger of being reached, and the stock market’s volatility throughout May due to this stand-off was evident. However, a deal was reached in early June (before the deadline), and the stock market has shown less volatility. Current concerns include the Federal reserve decisions on interest rate increases.

The significant increase in mortgage rates over the past year is just one part of the puzzle affecting the impact of new housing on the broader economy. Additional risks include homebuilders trying to find balanced inventory levels, supply chain issues, both wage and price increases, and persistent inflation. Over the past 25 years, the Inland Empire economy has had significant cycles with home prices almost doubling from 1995 to 2005, then falling by over 50 percent during the Great Recession, taking prices back to 2002 levels. Home values appeared to hit bottom in 2009 then remained essentially flat for two to three years with the majority of the Inland Empire housing market seeing an improvement beginning in mid- 2012. Contrary to homebuilder’s original thoughts of a slowdown due to the pandemic, new home buyers stepped up in the spring of 2020 and new home sales were significantly higher during the second half of 2020 versus the previous year and continued extremely strong throughout 2021. This exceptional activity in new home sales was the one bright spot in the COVID recession and is thought to be due to several factors, including: a tight supply of resale homes; historically low interest rates; millennials finally buying homes; and, the work from home factor which began during the pandemic and allowed residents to live in more suburban areas without long commutes. As rates began increasing in early 2022, there was a significant slowdown in sales and softening of prices within the Inland Empire, with year -over-year decreases in sales as of July 2023 of more than 10 percent. The high mortgage rates have significantly slowed existing homeowners from moving. The limited availability of existing homes on _________________________________________________________________________________________________________ Appraisal Report
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the market has resulted in new homes capturing a much larger share of the total home sales; however, new home sales are also down year-over-year.

While most jobs have come back, job losses were significant during the COVID recession as the Nation’s unemployment rate went from 3.5 percent in February 2020 to 14.4 percent in April 2020, with the June 2023 National unemployment rate at 3. 8 percent (Employment Development Department, not seasonally adjusted). The Congressional Budget Office (“CBO”) Forecast for the U.S. Economy (published February 2023) predicted real GDP growth will come to a halt in 2023 then will average 2.4 percent from 2024 to 2027 and then 1.8 percent between 2028 to 2033. The CBO states they expect unemployment rates to rise through early 2024 reflecting the slowdown in economic growth. In summation, the CBO projects for 2023: stagnant output, rising unemployment, gradually slowing inflation, and interest rates to remain at or above their current levels.

They believe that in 2023, non-interest spending will substantially exceed revenues with rising interest rates driving up the cost of borrowing which results in the government debt steadily increasing. Over the long term, they suggest changes in fiscal policy to address the rising costs of interest and mitigate other adverse consequences of high and rising debt.

The unemployment rate for the MSA was estimated at 5.0 percent (as of June 2023 per the Employment Development Department). This reflects a decrease from the peak during the Great Recession of 15.1 percent in 2010 and a decrease from the peak during COVID of 14.9 percent. As of June 2023, San Bernardino County’s unemployment rate was 4. 9 and Riverside County had a 5.0 percent unemployment rate. The current unemployment rate for the MSA of 5.0 percent is higher than the California rate at 4. 1 percent and higher than the June 2023 National rate of 3. 8 percent. Below is a table comparing San Bernardino County’s unemployment rate to the unemployment rates of the surrounding counties as of June 2023.

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Jurisdiction As of Unemployment Rate*
Los Angeles County June-2023 4.9%
Riverside County June-2023 5.0%
San Bernardino County June-2023 4.9%
Orange County June-2023 3.7%
San Diego County June-2023 3.4%
Source: State of California E.D.D.; *Not Seasonally Adjusted

The latest UCLA Anderson Forecast (“Forecast”) was issued March 15, 2023 and stated that the potential action by the Federal Reserve will determine whether the nation continues to grow or experiences a mild, short-lived recession in 2023. They believe the economy is at a recession- related fork in the road with one path leading to continued economic growth (although slower than the recent 2.4 percent growth rate) and the other would lead to a mild short -lived recession. Whether the economy slips into recession or not will depend largely on inflation stickiness and the additional action the Federal Reserve takes to bring down inflation. The Forecast states that if the Federal Reserve moderates its aggressive tightening, economic growth is expected to slow to 2.3 percent growth in first quarter 2023; 1.8 percent in 2nd quarter and 1.0 percent grow th for the second half of 2023. If the Federal Reserve keeps aggressively tightening, a mild recession will occur with the economy contracting beginning in the third quarter 2023 and deepening in the fourth quarter 2023 and the first quarter 2024 followed by the beginning of a rebound. The Forecast states under both scenarios, inflation will still be elevated but will be more persistent in the recession scenario requiring tighter monetary policy. They believe both outcomes will include persistent inflation with the no -recession scenario resulting in lower inflation and thus, more moderate monetary policy.

The UCLA Forecast for California is more positive than the overall Nation due to a strong demand for defense goods, labor saving equipment and software. In the no- recession scenario unemployment rate averages by year are estimated at 4.0 percent for 2023, 3.9 percent for 2024 and 3.6 percent for 2025. In the recession scenario, unemployment rate averages are expected to be 4.3 percent for 2023, 4.8 percent for 2024 and 3.7 percent for 2025. Under both scenarios the California Forecast projects housing permi ts to grow to 150,000 in 2025 in spite of the higher interest rates. The fact that the California housing _________________________________________________________________________________________________________ Appraisal Report
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market is not overbuilt will offset the decrease in the housing market. Overall, the Forecast believes that California will have a more moderate slowing or, in the case of a recession, a milder downturn than the U.S. overall.

As a final indicator of overall economic activity for the region, we have reviewed the rise and fall of TEUs (Twenty-foot Equivalent Units – i.e., containers) being processed in the local ports. This is especially important for the Inland communities, as it represents much of the growth in development of west coast distribution centers and warehouses in the Inland Empire linked to supply -chain nodes in the Pacific Rim. The chart below shows TEU activity at the Port of Long Beach. Generally, there has been increases since 2009 with the exception of a slight dip in 2016 and again in 2019 which ended with a 5.6 percent downturn. The 2022 calendar year saw a decrease of 2.6 percent from the previous year.

June 2023 was running 28.5 percent below June of 2022 (597,076 versus 835,412 total TEUs). It should be noted that Spring 2022 was a time when the back-up at the ports was still occurring due to supply chain issues. Per the Orange County Register (“Lack of product demand hurts drivers,” October 31, 2022) consumer demand cooled in mid-2022 leaving fewer TEUs needing to be driven from the ports. They are stating shipments have slowed due to American demand finally waning after the pandemic coupled with some major retailers bypassing the California ports for East C oast ports to avoid a possible upheaval by West Coast dockworkers as they negotiate a new contract. It appears that the slowdown in work for the dray operators (drivers who ship containers in and out of the ports) may be resulting from a slowdown in overall TEU demand.

4.0 5.0

6.0 7.0

8.0 9.0

10.0 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 TEU's (millions)
Year
Port of Long Beach TEUs
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Education
The subject area is served by the Etiwanda School District (“ESD”) and the Chaffey Joint Union High School District (“CJUHSD”). ESD serves elementary and middle school age children while CJUHSD serves high school and beyond. The subject is assigned to East Heritage Elementary School (K -5), Heritage Intermediate School (6- 8), and Etiwanda High School. ESD and CJUHSD are highly rated and are seen as stronger districts than neighboring District s. Community Colleges are available near the subject at Chaffey College in Rancho Cucamonga (four miles northwest), at Chaffey College’s Fontana campus (4.5 miles southeast), and San Bernardino Valley College (11 miles southeast).

Higher education is available approximately 11 miles northeast of the subject at California State University San Bernardino, about 15 miles southeast is University of California at Riverside, 1 2 miles southwest in the private Claremont Colleges ( which include Claremont McKenna College, Pitzer College, Harvey Mudd College, Pomona College, and Scripps College) and 19 miles to the southwest at Cal Poly Pomona.

Conclusion
Population in the County has increased over the past 2 0 years with predictions for continued population growth. The Nation’s economy has been slowing after the Board increased the F RR five percent to fight historical inflation which began during COVID.

One bright spot during COVID was housing; the region’s relative affordability and low interest rates, coupled with the rising prices in the coastal market and the demand for housing, set up a new housing boom. This was followed by a significant drop in sales due to existing homeowners being unwilling to give up their low -rate mortgages. Current concerns for the Inland Empire economy include: stubborn inflation, the high prices of homes, higher interest rates, supply chain issues, recent bank failures along with the Russian invasion of Ukraine, which are all creating volatility in both local and global financial markets. A possible light recession is forecast for later this year. What effect the recent bank failures will have on the economy is unknown at this time. In conclusion, the County is expected to continue to grow in population due to its Southern California location, the availability of land, and the relatively lower land and housing prices in comparison to adjacent Orange, Los Angeles, and San Diego Counties. _________________________________________________________________________________________________________ Appraisal Report
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CITY OF FONTANA DESCRIPTION

General Area
The subject property is located along the western border of the City of Fontana (“City”) in southwestern San Bernardino County. The City is situated at the base of the San Gabriel Foothills, east of the cities of Rancho Cucamonga and Ontario, north of Jur upa Valley, west of the City of Rialto and the community of Bloomington, and south of the San Bernardino Mountains. The City encompasses an estimated 43 square miles with generally the northern border the San Gabriel Mountains and the southern border the Jurupa Mountains. The black star on the below map shows the approximate location of Fontana CFD No. 100 within the City limits.

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History
Fontana was founded in 1913 and is the second largest city in San Bernardino County and the 20th largest city in the State of California. The area was a rural farming community with citrus orchards, vineyards and chicken ranches that ran along U.S. Route 66 which is now known as Foothill Boulevard. The historic Route 66, which was built in 1926 to connect Los Angeles to Chicago, is a commercial corridor that runs east/west through the City. During World War II, Henry J. Kaiser opened the Kaiser Steel Mill near Fontana, the only steel mill west of the Mississippi River, which brought industrial employm ent to the area during the war. To provide for the worker’s health needs, Kaiser constructed the Fontana Kaiser Permanente Medical Facility which now employs more than 5,000 people.

In 1994 the San Bernardino Freeway, which later became Interstate 10, was completed connecting Los Angeles to San Bernardino and making accessibility to Fontana relatively easy. This led to substantial growth as Fontana became an industrial hub for the County.

In the 1950s and 1960s the area of Fontana was home to a drag racing strip which served as a significant venue in the National Hot Rod Association (“NHRA”) circuit. In 1997, Roger Penske built the Fontana Speedway, now known as the Auto Club Speedway, which became a major NASCAR sanctioned tract. In 2006, the Auto Club Speedway opened a new NHRA sanctioned drag strip on site to resurrect Fontana’s drag racing heritage. The Auto Club Speedway was purchased by NASCAR in 2019 and hosts at least one major NASCAR race each year. It was recently announced the existing raceway will close due to the redevelopment of the lands; however, a smaller short -track will be developed on a portion of the lands keeping car racing in the area of Fontana.

Population
The January 2023 population of Fontana (per the California Department of Finance) is 213,851, which represents an increase of 0.6 percent over the previous year. The 2000 population of Fontana was 128,928, suggesting the population has increased 66 percent over the past 23 years or an average rate of 2.2 percent per year. The City population represents 9.8 percent of the County population. This compares to an increase of 0.1 percent in the County year -over-year and a negative growth of 0.4 percent in the St ate _________________________________________________________________________________________________________ Appraisal Report
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year-over-year. Fontana was one of seven cities within the County with positive population growth in the past year compared to 18 cities with negative growth. The City has several new home communities currently under construction, especially in the northern portion of the City. Per the U.S. Census Bureau, the average household size in Fontana is 3.75 persons while in overall San Bernardino County the average household size is 3.26 persons. Over 78 percent of the population of the City are high school graduates and over 28 percent of the population of the City are under 18 years old.

Housing
According to the Southern California Association of Governments (“SCAG”), the City of Fontana has an estimated 55,632 housing units as of 2021 (latest data available), with a growth rate of 56 percent since the year 2000. This compares to the County’s hous ing growth rate of 22.2 percent during this time. This further illustrates Fontana’s growth spurt due to land available for development over the past 20 years. Fontana hosts over eight percent of the total number of households in the County. Below is a graph showing residential units permitted in Fontana between 2002 and 2022.

While the current numbers are not at pre-Great Recession numbers, they are the highest in the past 15 years. Per SCAG, 68 percent of the housing stock is owner occupied and 32 percent are renters. Only 22 percent of the housing stock in the City was built before 1970 and 78 percent was built since that time. There are three residential projects in final planning or under construction: a 489-unit community known as Nara Hills, northwest of I-15 and Duncan Canyon; a 257- unit project at Duncan Canyon and I -15 and a 189-unit project at Duncan Canyon and Citrus. These are in addition to 777 new single- family 1,908
1,545
1,025
209 306 270 261 419 498 865
1,182 1,029
2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2021 2022 Fontana Residential Building Permits
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residential permits and 405 multi-family residential that were issued in 2021. Per the City’s 2022 annual report, there are four projects in the planning stage: Courtplace which includes 106 affordable units; Sobrato which includes 143 attached and detached units and Citrus East (75 cluster units) and Citrus West (85 cluster units). It is our understanding that the Citrus East and Citrus West buyer has cancelled both escrows, however entitlements are ongoing on these two sites with one recently entering into a new escrow.

Per the 2022 annual report, there were 629 new single-family residential permits and 400 multi-family residential permits issued. Per SCAG, the median home price in the City went from $129,000 in 2000 to a peak of $450,000 in 2006 and a low of $200,000 i n 2009.

According to Redfin Market Trends, the June 2023 median home price in Fontana was $610,000, which represents a 8.3 percent decrease year-over-year from June 2022 which was the peak of the market at $665,000.

Current new homes communities selling within Fontana include: Aurora Park by Tri Pointe with two neighborhoods (the subject), The Retreat by Lennar, Highland Park by Richmond American with two neighborhoods, Shady Trails with one remaining neighborhood by Tri Pointe, The Arboretum by Lennar with six neighborhoods, Monterado with two neighborhoods by Lennar and Nara Hills with five neighborhoods currently being marketed by LandSea Homes. Per the City web site Ventana is also under development proposed for 257 dwelling units at Duncan Canyon and Citrus Avenues. Per Realtor.com there are currently 388 existing homes for sale within the City (including 90 new homes and 298 existing homes) with the median listing price of $620,000 and the median sold home price of $597,000 (June 2023). Within the subject’s zip code of 92336, there are 234 homes for sale (including 88 new homes and 146 existing homes). The median listing home price is currently $670,000 (within the zip code) and the median sold home price is $690,000. The lower sales price than asking price (within the overall City) is in -line with current resale trends in the Inland Empire of homes selling for lower than their list price.

The higher sold price in relation to the asking price within the subject’s zip code relates to the new home sales where most buyers purchase options or upgrades.

The 210 Freeway provides east-west access through the upper third of the City; Route 66 (also known as Foothill Boulevard) provides east-west access through the approximate middle of the City and the I-10 provides east-west access through the bottom third of the City. Major on/off ramps to the City from I-15 include Foothill Boulevard, Baseline Avenue, the 210 Freeway, Summit Avenue, Duncan Canyon Road and Sierra Avenue. On/off ramps from the 210 Freeway within the City include Cherry Avenue, Citrus Avenue and Sierra Avenue. Route 66/Foothill Boulevard has stop lights at major intersections while the major on/off ramps from I-10 in the City include Etiwanda Avenue, Cherry Avenue, Citrus Avenue and Sierra Avenue. Access to the subject is via Baseline Avenue to North Heritage Circle to Kestrel Drive to Clair Lane, the gated entrance to the subject property.

Economy
Existing commercial property within the City of Fontana is generally along the major thoroughfares including I -10, Route 66/Foothill Boulevard, Sierra Avenue and the 210 Freeway. There are several large shopping centers including Sierra Lakes Marketplace and Falcon Ridge Town Center, both which serve the subject property. The City is home to an Amazon Distribution Center, a Target Distribution Center and a FedEx transfer station. The intersection of the I-10 and I-15 is a major industrial hub which extends into the City of Fontana with generally industrial use south of I-10. The Fontana Speedway is located along Cherry Avenue north of I-10 and the Metrolink station is located along Sierra Avenue. The top-ten employers in the City (from 2018 – latest available per City’s website) include the following:

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Employer No. of
Employees
Kaiser Hospital 5,430
Fontana Unified School District 5,000
City of Fontana 1,030
Target Distribution Center 621
Costco Wholesale 333
U S F Reddaway 320
Estes West 317
Sierra Aluminum Company 312
Crown Technical systems 297
Walmart Store (Foothill Blvd) 290

Summary
Fontana is located at the base of the San Gabriel Mountains and was incorporated over 100 years ago as a rural farming community. Kaiser Steel brought jobs to the area during World War II and the opening of the I-10 Freeway in the 1950s made it an easy commute to Los Angeles and Orange Counties. Almost 80 percent of the housing stock within the City was built since 1970. Between April 2020 and March 2022 residential building permits grew significantly after a lull in the first 10 years since the Great Recession. In the past year permits have slowed due to slowing sales. The area has excellent access via three major freeways and the historic Route 66. The area’s central location, reasonable land prices and the availability of land for development combine to make the area a prime area for future growth.

IMMEDIATE SURROUNDINGS

The subject property is located east of I-15, at the southwest corner of Victoria Street and Kestrel Drive, about one-half mile south of I-210, in the City of Fontana. The subject has convenient freeway access to the I -15 via the Baseline Avenue exit, or I -210 via the Cherry Avenue exit.

The subject lands are generally surrounded by vacant land to the east and west. To the north, on the north side of Victoria Street, is California Highway Patrol office and a Caltrans facility marked as “State of California Materials Testing Facility.” The facility is large and appears to be newer, with a large parking lot and several buildings of Spanish style architecture. Adjacent east of the subject is several large vacant parcels of land which do not appear to be utilized for any current use, but do include a SoCal Edison easement running through them, in a northeast/southwest direction (southeast of the subject). Adjacent south of the subject is existing residential homes, with the immediate south community known as North Heritage, built in the late 1980s/early 1990s and featuring single family detached homes on generally 7,200 square foot lots. Southwest of the subject is another tract of homes, also part of the North Heritage neighborhood, but includes denser product with detached homes situated on sm aller lots, also built in the late 1980s. In the middle of the North Heritage neighborhood, at the northwest intersection of Baseline Avenue and North Heritage Circle, is North Heritage Park, a neighborhood park less than one quarter mile southwest of the subject. Immediately west of the subject is a drainage channel with a walking/biking path. Beyond the drainage channel (known to the north as East Etiwanda Creek), is a vacant parcel of land and a storage facility (Victoria RV & Boat Storage) which abuts the I -15 freeway. The western boundary of the subject is approximately 1,000 feet east of the freeway.

There are two schools within a half mile radius of the subject: the highly ranked Etiwanda High School is located west of I -15, on the north side of Victoria Street; and Heritage Intermediate School is located on the southside of Baseline Avenue, at South Heritage Drive. Both of these schools serve the subject. Etiwanda High School is in the Chaffey Joint Union High School District, and technically is in the city of Rancho Cucamonga, _________________________________________________________________________________________________________ Appraisal Report
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despite its close proximity to the subject. Heritage Intermediate School is part of the Etiwanda School District, which also provides elementary schools to the subject. The subject’s assigned elementary school is East Heritage Elementary, which is located approximately one mile southeast of the subject (past Heritage Intermediate School) on Constitution Way, in the West End neighborhood.

There are several parks within close proximity to the subject, the closest being North Heritage Park as mentioned above. South of Baseline Avenue and adjacent to Heritage Intermediate School is Heritage Park which includes a parking lot, snack bar/restroom facility, along with Mcdermott Soccer Field, housing three full size soccer fields. Further southeast, just under one mile from the subject, is Heritage Circle Park, which features a tot lot, walking paths, covered picnic tables and barbeque areas, and a large grassy field. Approximately two miles east of the subject at the northeast corner of Beech Avenue and Walnut Street is Koehler Park, a public recreational park with large fields, basketball courts, tennis courts, play structures, covered tables and restrooms.

There are several shopping centers within one mile of the subject, with the closest retail options being at the I -15 Baseline Avenue intersection which features several dining options, including a Starbucks and Jack in the Box, as well as a gas station and several small stores. The nearest grocery store is a Vons at the southwest corner of Cherry Avenue and Baseline Avenue, located within the Heritage Village Center which includes a multitude of dining options as well as a US Bank, Shell Gas Station, Goodwill, Autozone, and Wells Fargo. At the northeast corner of Cherry Avenue and Baseline Avenue, lies the Anchored Center, complete with a Dollar Tree, Chevron gas station, KFC, Baskin- Robbins, Wienerschnitzel, Chase Bank, and more. These are all within one mi le of the subject property. Slightly farther out approximately 1.5 miles southeast of the subject at Foothill Boulevard and Cherry Avenue, is a WinCo Foods grocery store and a McDonalds.

Larger scale shopping is located just over two miles northeast of the subject on the southwest corner of Beech Avenue and Summit Avenue, where an additional shopping center, known as Summit Heights Gateway, includes a Kohl’s, PetSmart, Aldi grocery store, a Planet Fitness, and several smaller retail stores and restaurants. Directly across _________________________________________________________________________________________________________ Appraisal Report
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from Summit Heights Gateway is the larger Falcon Ridge Town Center. Falcon Ridge Town Center is located at the corner of Beech Avenue and Summit Avenue on the east side of I-15, and is anchored by a Stater Brothers Market, Target, Michael’s craft store, Ross Dress for Less, CVS, and 24 -Hour Fitness. The center also offers a multitude of dining options. Approximately 3.5 miles northeast of the subject at Sierra Lakes Parkway and Citrus Avenue, just north of I -210. This stretch of retail starts at Citrus Avenue and continues along Sierra Lakes Parkway through the Sierra Avenue on/offramp, and includes a Home Depot, Ralphs Grocery Store, Walgreens, Costco, LA Fitness, Lowes Home Improvement and more. The nearest shopping mall is approximately two miles southwest of the subject on the west side of I-15, where Victoria Gardens is anchored by a Macys and JC Penney department store in addition to a plethora of restaurant and shopping options, all located across the street from a Bass Pro Shop.

We have reviewed the City of Fontana CFD Report for Community Facilities District No. 100 (Victoria) dated November 18, 2020, as prepared by David Taussig & Associates, Inc. The CFD Report provides a brief description of Fontana CFD No. 100, a brief description of the facilities to be funded along with an estimate, a description of the boundaries and an estimate of the cost of financing the bonds used to pay for the facilities.

Resolution No. 2020-129 was adopted on October 13, 2020 and approved the intention to establish Fontana CFD No. 100.

The exterior boundaries of Fontana CFD No. 100 per the Proposed Boundary map are shown below.

Per the CFD Report, at time of formation, Fontana CFD No. 100 encompassed approximately 21.6 gross acres (13.9 acres subject to the Special Tax) proposed for 193 single family detached residential units with estimated sizes ranging from 2,154 to 2,915 square feet. Actual square footage ranges from 1,879 to 2,743 square feet.

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Per the CFD Report, the types of facilities to be eligible for funding are streets, including grading, paving, curbs and gutters, sidewalks, street signalization and signage, streetlights and parkway and landscaping related thereto, sewers, storm drains, fire protection facilities, police facilities, public facilities, landscaping, library facilities, park and recreational facilities and land, rights -of-way, and easements necessary for any of such facilities. The types of public facilities proposed to be purchased as completed facilities by CFD No. 100 are streets, including grading, paving, curbs and gutters, sidewalks, street signalization and signage, street lights and parkway and landscaping related thereto, sewers, storm drains, park and recreational facilities and land, rights-of-way, and easements necessary for any of such facilities. Furthermore, additional public facilities authorized to be purchased as completed facilities by CFD No. 100 are additional streets, including grading, paving , curbs and gutters, sidewalks, street signalization and signage, street lights and parkway and landscaping related thereto, additional sewers, additional storm drains, fire protection facilities, police facilities, public facilities, additional landscaping, library facilities, additional park and recreational facilities, and land, rights - of-way and easements necessary for any of such facilities. The types of public services to be financed by CFD No. 100 are fire protection and suppression services, maintenance and lighting of parks, parkways, streets, roads and open space, flood and storm protection services and maintenance and operation of any real property or other tangible property with an estimated useful life of five or more years that is owned by the City. Incidental expenses also included are the cost of planning and designing public facilities to be financed, including the cost of environmental evaluations of those facilities; the costs associated with the creation of CFD No. 100, issuance of bonds, determination of the amount of taxes, collection of taxes, payment of taxes, or costs otherwise incurred in order to carry out the authorized purposes of CFD No. 100; and, any other expenses incidental to the construction, completion, and inspection of the authorized work.

Per the Rate and Method, the Assigned Facilities Special Tax for Developed Property for Fontana CFD No. 100 (Victoria) are estimated as follows:

Description

Product Type

Special Tax
1 Residential Property Alley Load Product $2,348 per unit 2 Residential Property Cluster Product $2,229 per unit
3 Non-Residential Property N/A $31,660 per acre

The estimated cost of public facilities at the time the Fontana CFD No. 100 Report was created were estimated as:

PUBLIC FACILITIES AMOUNT AMOUNT
Acquisition Facilities: $3,877,579(1)
Sewer Improvements $1,342,032
Park Development Improvements $980,709
Circulation and Traffic Improvements $880,282
Storm Drain Improvements $674,556
Other Public Facilities: $3,682,270(2) $1,248,411(3)
Park and Recreational Facility $1,154,468 $173,759
Circulation Facility Improvements $1,106,662 $226,380
Storm Drain Improvements $403,682 $0
Inclusionary Housing Improvements $260,550 $260,550
Sewer Improvements $169,186 $0
Public Facility Improvements $153,678 $153,678
Landscape Facility Improvements $110,628 $110,628
Library Facility Improvements $102,927 $102,927
Police Facility Improvements $101,618 $101,618
Flood Control Improvements $87,219 $87,219
Fire Service Protection Improvements $31,652 $31,652
Additional Capital Facilities Infrastructure Improvements $1,281,498 TOTAL ESTIMATED COSTS $6,407,488
(1) Estimates provided by builder and inclusive of 10% contingency for hard costs and 25% contingency for soft costs.
(2) Estimated amount of Permit Fees PRIOR to the application of anticipated City fee credits (3) Estimated among of Permit Fees AFTER the application of anticipated City fee credits.

The maximum bonded indebtedness for CFD No. 100 is $8,000,000 . Per the latest sources and uses of funds (dated August 15, 2023) for the proposed bond issuance, there will be an estimated $ 5,330,000 in Bond Par Amount and a Net Premium of $33,870 along with $190,081 Special Tax Collection Funds on Hand for a total bond fund deposit of $5,553,951 with $ 4,770,199 going to the Project Fund, $ 361,212 in Debt Service Reserve Fund and $387,640 in Underwriter’s Discount and C ost of Issuance along with $34,900 in Initial Deposit for Administrative Expenses (all amounts subject to change). A larger copy of the Fontana CFD No. 100 boundary map is located in the Addenda for your review.

SUBJECT PROPERTY DESCRIPTION

The subject property consists of 193 proposed units being developed as Sienna at Aurora Park and Goldenrod at Aurora Park, both being built and marketed by TriPointe Homes.

The subject site is described below.

Location: Southwest corner of Victoria Street and Kestrel Drive, east of I -15, Fontana, California
Legal Property
Description: Lot 1 of Tract No. 20229 in the City of Fontana, County of San Bernardino, State of California.

Property Owner: Sienna: Individual Owners as Units 58-61 and 185-189 of Module G; Units 157-162 and 170-172 of Module A; Units 163-166 and 173-176 of Module C; Units 167- 169 and 177-178 and 190-193 of Module E of Lot 1 of Tract 20229.

TriPointe Homes Holdings, Inc. as to Units 55-57 and 179- 184 of Module I; Units 86- 90 of Module K; Units 91- 93 and 121- 123 of Module M; and Units 108-110 of Module AA of Lot 1 of Tract 20229.

Rescal Victoria 193, LLC (dba Resmark) as to Units 94-97 and 119- 120 of Module O; Units 98-101 and 117-118 of Module Q; Units 102-

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105 and 113-116 of Module S; Units 106-107 and 111-112 of Module U of Lot 1 of Tract 20229.

Goldenrod: Individual Owners as Units 1-6 of Module J; Units 43-48 and 62-65 of Module H; Units 49- 54 of Module F; Units 142 -147 of Module B; Units 148-156 of Module D of Lot 1 of Tract 20229.

TriPointe Homes Holdings, Inc. as to Units 7 -12 of Module L; Units 13-18 and 82-85 of Module N; Units 136-141 of Module BB1 of Lot 1 of Tract 20229.

Rescal Victoria 193, LLC (dba Resmark) as to Units 19 -24 and 78- 81 of Module P; Units 25-30 and 74-77 of Module R; Units 31-36 and 70-73 of Module T; Units 37- 42 and 66-69 of Module V; Units 124- 129 of Module W; Units 130- 135 of Module X; Units 137- 138 of Module BB1 of Lot 1 of Tract 20229.

Assessors
Parcel Nos.: The subject covers the following APNs: 0228-192-04 through - 47; 0228-193-01 through -38; 0228- 194-01 through - 57; 0228- 195-01 through -54.

Property Taxes: We have reviewed the property tax invoice for sample parcel 0228- 194-48-0000. The parcel has an assessed net value of $ 629,156.

The property taxes include $6,291.56 for the general levy , $203.21 for the Etiwanda Elementary Bond , $184.97 for the Chaffey High Bond, $86.19 for the Chaffey College Bond, and $22.02 in miscellaneous charges. The tax invoice (as of July 19, 2023 per the County of San Bernardino Tax Collector) shows the first installment paid. The subject Fontana CFD No. 100 is not shown on this tax invoice. It is an assumption of this report that the overall property taxes and special assessments are not over two percent.

Three-Year
Sales History: Per TriPointe, Rescal Victoria 193, LLC (dba “Resmark”) purchased the subject property for $ 25,315,146 on December 23, 2020. On June 7, 2021, TriPointe Homes Holding s, Inc. purchased the first takedown from Resmark, purchasing six of the pads/lots. To date, TriPointe has taken down 115 of the lots/pads with the most recent takedown occurring July 10, 2023, and the next take down anticipated for September 5, 2023. TriPointe began closing homes within the subject to individual owners in June 2022, and has closed 72 houses between June 14, 2022, and July 14, 2023.

Size and Shape: Tract Map 20229 is generally rectangular in shape and contains

21.539 gross acres and 19.147 net acres per the recorded map which subdivides the subject into one numbered lot and two lettered lots. Per the condominium plans, the lot was subdivided into 28 lettered modules and two recreation modules. The approved 193 _________________________________________________________________________________________________________ Appraisal Report
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units results in an overall density of 10.08 dwelling units per acre based on the net acreage of 19.147 acres per the tract map.

Zoning: Per the current City of Fontana General Plan Land Use Map dated April 2022, the site is designated as R -M (or Medium Density Residential 5.1-12 du/acre). The subject lands fall within the West Gate Specific Plan, which denotes the subject as PA 50 with R- 1- 10,000 zoning, which represents 0- 5 du/acre, per the Specific Plan dated February 14, 2017. While we were unable to obtain a copy of any further amendment, we were able to find the EIR to the Westgate Specific Plan Amendment No. 18-004 (dated April 2019) and the City of Fontana Planning Commission Documents which approved Specific Plan Amendment 18-004 and General Plan Amendment No. 18-007. Specific Plan 18- 004 modified the designation on the subject property from R -1-10,000 to R-2 Cluster (Residential 5. 1 to

12.0 dwelling units per acre). The subject’s approved density of

10.08 dwelling units per acre is within this designation.

Entitlements: The subject is entitled by Tract Map No. 20229 which was recorded on June 17, 2021 and divides the subject into one numbered lot.

Subsequent condominium maps further divide the subject: Sienna at Aurora Park Condominium Plans and Goldenrod at Aurora Park Condominium Plans . While all 13 Goldenrod Condominium plans have been recorded, 10 of the 12 Sienna Condominium plans have been recorded, with the final two (for Phase 8 and Phase 12) were not yet recorded at the time of this appraisal. A copy of Tract Map No. 20229 and subsequent condominiums maps are located in the Addenda for your review.

Home Owner’s
Association: Aurora Park ’s monthly HOA fee is estimated by TriPointe representatives as $193 per month at build out. The HOA covers maintenance of the community gate, swimming pool, spa, fire pit, barbeques, clubhouse and restrooms, community park s, as well as all walkways and community landscaping. The pool, spa and clubhouse areas appear to be complete, but there are four smaller neighborhood park areas spread throughout the community that are under construction. Per the builder’s website’s site plan rendering, these appear to include a tot lot with jungle gym, a park with outdoor exercise equipment, a green belt with gazebo and seating areas, and grassy area with tables and chairs. The TriPointe website currently quotes the monthly HOA fee at $ 230, which is more conservative than the DRE budget provided.

Topography: The subject lands are generally flat and at grade with streets on the north (Victoria Street), east (Kestrel Drive), and south (generally North Heritage Circle) borders. The eastern border is the East Etiwanda Creek drainage channel which generally travels south to _________________________________________________________________________________________________________ Appraisal Report
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the Santa Ana River. The subject has been fully graded with the lots and pads generally level with the internal streets.

Soils Condition: We have reviewed a “Geotechnical Report Update” for the subject site dated June 8, 2020, prepared by Leighton and Associates, Inc. of Rancho Cucamonga. The Report presents a summary of the observation and testing services provided by Leighton and Associates as well as their findings and suggestions for developing the site into Tract 20229. The Report concludes that the proposed development is geotechnically feasible, provided that the recommendations contained in the report are incorporated into the design and earthwork construction of the project as was currently planned.

It is an assumption of this appraisal that the soils are adequate to support the highest and best use conclusion and that all recommendations made within any and all reports were adhered to during construction. The appraiser is not a soils expert and it is recommended that any concerns relating to soils should be addressed to the appropriate experts.

Seismic
Information: Per San Bernardino County’s Geological Hazard Overlay map, the subject property is not located within a County Designated Fault Zone or an Earthquake Fault Zone Boundary.

Environmental
Concerns: We have reviewed a “Master Property Disclosure Report” (“PDR”) dated February 12, 2021, prepared by First American Natural Hazard Disclosures. The report determines that the subject is located in: a Special Flood Hazard Area (FEMA designated Flood Zone AE, X500 – one percent chance of flood discharge contained in a structure); a mapped area of low landslide susceptibility; a fire hazard zone designated “Very High” (Not VHRHSZ which is the highest) ; within one mile of property zoned to allow for commercial or industrial use; in a climate zone where properties are usually subject to duct sealing and testing requirement; and in a one- mile radius of designated “Important Farmland” that requires a statutory “Notice of Right to Farm.”

It is an assumption of this report that there are no environmental issues which would slow or thwart development of the subject property. This is evidenced by construction of homes on the site and City inspectors on site during construction.

Flood Information: Per FEMA Map No. 06071C7895J dated September 26, 2014 the property is shown as being located in Zone AE which states 1 percent annual chance flood discharge contained in structure (the Etiwanda Creek Channel, eastern border of the stie).
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Easements and
Encumbrances: We have reviewed a Preliminary Title Report prepared by First American Title Company as Order Number NHSC -6553867 dated April 10, 2023, issued for the Rescal Victoria 193, LLC and TriPointe Homes Holdings, Inc. ownerships.

Item Nos. 1-6 refers to property taxes and special assessments including CFD No. 2; CFD No. 10 and the subject CFD. Item Nos. 7 and 12 refer to abutter’s rights. Item No. 8 pertains to the development agreement. Item Nos. 9, 10, 13, 14, 15 and 16 refer to easements for sewer, storm drain, utilities, roads and equipment and incidental purposes for Spectrum Pacific West LLC . Item No. 11 refers to matters shown or disclosed by Tract No. 229. Item No. 17 refers to CC & Rs. Item Nos. 18 through 43 refers to Condominium Plans for each module within both Sienna and Goldenrod. Item No. 44 is in regard to the master dispute resolution declaration. Item Nos. 45 through 53 pertains to Easements, Covenants and Conditions between Tri Pointe Homes Holdings, Inc. and t he Aurora Park Homeowners Association. Item No. 54 refers to the rights of the public in any land lying within a road, street, alley or highway. Item No. 55 pertains to water rights and Item No. 56 is in regard to the rights of parties in possession.

It is an assumption of this appraisal report that the subject lands are free and clear of any liens and/or encumbrances other than Fontana CFD No. 100, the above referenced CFD Nos. 2 and 10 and the easements noted above. The appraiser is not a title expert and it is recommended that any concerns relating to title should be addressed to the appropriate experts.

Utilities: All normal utilities are available to serve the subject site by the following companies:

Electrical: Southern California Edison Company
Natural Gas: SoCal Gas
Sewer: Inland Empire Utilities Agency
Water: Fontana Water Company
Schools: Etiwanda School District and Chaffey Joint
Union High School District

Streets/Access: Access to the subject property is convenient via I-15 to exit 113 Base Line Road, east one-half mile to North Heritage Circle, then north on North Heritage Circle. There’s an entrance to the subject from North Heritage Circle at Mallow Drive, or from Kestrel Drive (where North Heritage Circle dead ends) via Clair Lane (main gated entrance) .

There’s a third entrance to the subject on the north from Victoria Street. For access via the I -210 exit 64B Cherry Avenue, south on _________________________________________________________________________________________________________ Appraisal Report
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Cherry for one- half mile to Victoria Street, and west on Victoria Street. The subject is on the south side of Victoria Street, approximately three-quarters mile west of Cherry Avenue.

I-15 (less than 0.25 miles west of the subject) is a major north/south freeway, which provides access to both international borders with Mexico and Canada.

I-210 (approximately 0.6 miles north of the subject) is an east/west freeway. It begins in Santa Clarita in Los Angeles County and ends near downtown San Bernardino. I -210 provides additional access parallel to I-10 which gets congested at commuting times.

I-10 (4.0 miles south of the subject) is a major east/west freeway in San Bernardino across Los Angeles and San Bernardino Counties.

I-10 provides access to Los Angeles to the west and through San Bernardino County and Riverside County to Arizona to the east. I-10 is an interstate providing a southern route across the U.S. to Florida

Base Line Road is a major east/west arterial passing through several cities. Base Line Road starts 16 miles west of the subject at Foothill Boulevard in La Verne, passes through Claremont where it provides access to the I-210/Foothill Freeway and through Upland. In Upland, it briefly becomes 16
th Street, but returns to Base Line Road in
Rancho Cucamonga. Base Line continues 20 miles east of the subject in the city of Highland, after passing through the cities of Fontana, Rialto, and San Bernardino. Base Line Road has on/off ramps at I-15, I-210, and I-215.

North Heritage Circle is a smaller local arterial that crosses Base Line Road twice, providing access from Base Line into shopping centers and residential neighborhoods to the north, and Heritage Intermediate School and additional residential lands to the south.

The road currently terminates near the subject at Kestrel Drive, but appears to possibly be built to continue and make a full circle in the future.

Cherry Avenue has on/off ramps at I -10 and I -210 and provides access into central and south Fontana. Cherry Avenue turns into Duncan Canyon Road in the Hunter’s Ridge neighborhood,
approximately three miles north east of the subject and ends at Mulberry Avenue, in the southwest industrial park area of Fontana, approximately six miles south of the subject.

Victoria Street is a smaller local arterial that runs from east/west and passes under I -15 just west of the subject, but does not provide freeway access. Victoria Street begins approximately 1.5 miles west _________________________________________________________________________________________________________ Appraisal Report
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of the subject in the Etiwanda neighborhood, and terminates 0.75 miles east of the subject at Cherry Avenue.

Internal streets within the subject include: Kestral Drive, Clair Lane, Calla Lily Drive, Bell Way, Stonecrop Lane, Gazania Lane, Prickly Pear Lane, Mallow Drive, Sedum Lane, Mangrave Lane, Birch Way, Aloe Lane, and Orbea Way. The main entrance is from Kestrel Drive via Clair Lane (main gated entrance) , directly across f rom the community pool and recreation center. The models are located adjacent to the community pool and clubhouse at Calla Lily Drive and Orbea Way.

Current Condition: The subject is being developed into 193 single-family homes consisting of motorcourt cluster pads for 111 detached condominiums and alley load pads for 82 detached condominiums.

Upon our inspection, 88 of the homes were over 95 percent complete including 72 individually owned homes, six model homes, and ten additional production homes owned by the builder ( nine in escrow).

In addition, there were 11 homes under construction (less than 95 percent complete, ten in escrow) and 94 additional finished lots/pads (none in escrow).

Costs to Complete: The subject property has been developed into 193 finished lots/pads with internal streets complete and utilities stubbed to each lot. Per TriPointe representatives there are minimal remaining hard costs which include $300,000 for a pedestrian bridge, $590,000 for remaining in-tract landscaping and $50,000 for remaining paving for a total of $940 ,000 in remaining hard costs for land development , however $300,000 (the pedestrian bridge) will be funded by the CFD proceeds. In addition, there is $2,841,662 in remaining DIF fees plus $978,286 in remaining school fees. This appraisal assumes the bonds are in place, thus there are $ 640,000 ($940,000 less $300,000) in remaining land development costs and remaining fees of $3,819,948 ($2,841,662 plus $978,286) for total rema ining costs of $4,459,948. It is our understanding that these costs are the builder’s responsibility and will be spread between the TriPointe and Resmark owned lots as the individual owners are not responsible.

Out of the total 193 lots/pads, 72 are individually owned leaving 121 lots, pads or homes owned by TriPointe and Resmark. TriPointe owns 43 which includes six models, ten houses over 95 percent complete and 11 houses under construction and 16 lot/pads .

Resmark owns 78 lots/pads. Dividing the $ 4,459,948 by the 121 lots/pads results in remaining land development costs of $36,859.072 per lot/pad.

Sienna is alley loaded detached condominiums and features three floorplans sized 1,879 to 2,264 square feet. The floorplans all feature two stories with three to four bedrooms and two to three-car garages.

Goldenrod features detached condominiums arranged in motor courts and has three floorplans sized 2,006 to 2,743 square feet, with three to five bedrooms and two to three-car garages. Note that there are two variations of Plan 2, one at 2,292 square feet and the other at 2,301 square feet due to architectural differences in the elevation.

We will utilize the smaller sized home of 2,292 square feet in our analysis. In addition, there have been some arc hitectural changes after Phase 6 which adjusted the square footage of some of the plans. These are not taken into account in this appraisal as the homes which are over 95 percent complete are all within Phases 1 through 6. The models of the co mmunity are located at the eastern entrance to the subject off of Kestrel Drive at Calla Lily Drive and Orbea Way. There are four Goldenrod models (one of which is being utilized as a sales office) and three Sienna models. Aurora Park features two story floorplans with three exterior architectural styles:

Traditional, Spanish, and Farmhouse. Home exteriors feature dual glazed low-E windows, insulated roll-up sectional garage doors, rain gutters, and 8-foot entry doors with black hardware and Smart Wi-Fi deadbolt. Aurora Park homes include tankless water heaters, 220V outlet in garage for electric car chargers, Eero Wi-Fi systems, Merv 13 air filters, and smart home system including Amazon voice control for automation of smart deadbolt, Ring doorbell, and Smart programmable Wi -Fi thermostat. Kitchens include granite countertops and white thermofoil flat panel cabinets, stainless teel double basin sinks, and GE stainless steel appliances. Seventy -two of the proposed 19 3 homes in the subject property have closed to individuals with closing dates betwee n June 14, 2022 and July 14, 2023. Per TriPointe, actual closed sales prices (including premium, upgrades, options, and net all incentives) have ranged from $529,451 to $852,048 . Current reported base asking prices range from $567,000 to $742,000 while grand opening base asking prices in December 2021 ranged from $648,000 to $752,000. Our search of the MLS revealed no resales and one current resale listing. Our physical search noted all homes appear to be in excellent condition.

It should be noted that the seller is offering varying concessions including some rate buy downs, on a case- by-case basis. The closing cost/rate buy down incentives have ranged from $ 0 to $38,500 with an average amount of $13,341.60 per home for the 91 home sales to date. The houses which are over 95 percent complete are detailed below.

*Each asterisk designates one model home per that plan. In addition to the above, there are 11 homes under construction (five at Sienna and six at Goldenrod) and an additional 94 finished lots/pads (30 at Sienna and 64 at Goldenrod).

Aurora Park by TriPointe Homes

Plan

Bed/Bath
Floors/
Parking Sq. Ft. Ind.

Owned
Bldr.

THE INLAND EMPIRE HOUSING MARKET

In analyzing the area’s housing market, population growth and economic conditions need to first be considered.

Population
The San Bernardino County population showed minimal 0. 1 percent growth between January 2022 and January 2023, and an average of about two percent the previous 20 years. The stagnant growth during this time is thought to be due to the disruption during COVID. Prior to the COVID pandemic, predictions were for the County to grow at an average annual rate of 0.75 percent over the next eight years. This equates to an increase of approximately 20,000 residents per year suggesting the need for about 7,000 homes per year within the County. The COVID influence is still unknown on the County’s population growth. New home sales in most cities in the County from 2020 were higher than the coastal communities due to affordability, the work from home factor, and the fact that millennials are finally entering the housing market. These factors may increase actual County population growth in 2023 . This has been offset by minimal existing home sales resulting in less overall home sales over the past year as compared to one year ago and also as compared to 2019, before COVID.

Economic Conditions
Over the past twenty-five years the Inland Empire has seen various cycles in the housing market. The Great Recession impacted the Inland Empire significantly and resulted in a longer recovery period than that of other Southern California regions. The rise and then fall of housing prices in the Inland Empire between 2004 and 2009 was considerably steeper than almost anywhere in the State. Unfortunately, this meant that the people who bought near the peak of the market likely faced significant negative equit y. After essentially remaining flat for a few years, housing prices began to increase in late 2012 through January 2020. Once the COVID pandemic hit in March 2020, the economy entered what is now known as the COVID Recession. The housing market slowed down significantly early on, but by May 2020, new homes were going under contract and selling at well above average absorption rates from May 2020 through Spring of 2022 in the _________________________________________________________________________________________________________ Appraisal Report
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region. Since May 2022, the new home market has seen a shake-up due to the increasing interest rates, the high prices of homes, and the high rate of inflation which is shaking consumer confidence , however this is partially offset by the extremely limited resale housing market which is fueling new home sales.

Economic growth in the Inland Empire was strong generally between 2015 (after the Great Recession), and until the economic shutdown due to COVID. The second half of 2020 and all of 2021 saw economic growth, however the first two quarters of 2022 saw GDP shrinking while the third and fourth quarters saw minimal growth with 2022’s growth at 2.6 percent. The most recent unemployment rate for the County is 4.9 percent (per the June 2023 EDD report – most recent published), slightly higher than the County’s pre- COVID unemployment rate in February 2020 of 3.7 percent. While unemployment rates are near historical lows, the inflation factor is significantly affecting the economy.

The housing market played a large role in the past two recessions. In the Great Recession, due to increased interest rates and rising home prices between June 2004 and mid-2006, the market reaction was to create non-conventional financing alternatives, such as sub- prime and non- conventional mortgages, to artificially maintain the boom housing market of 2004 and 2005. By 2007, the housing market saw a shake-up because of the problems in the sub-prime and non-conventional mortgage markets, which played a rol e in the 2008 upheaval of Wall Street and contributed significantly to the U.S. economic downturn of the Great Recession. Due to stricter income verification on new loans and the lack of available credit, coupled with job losses and declining home prices, sales of new homes slowed for the next few years and essentially remained flat until mid- 2012 when home prices began a steady climb.

During the COVID recession, new home sales were one of the brightest spots in both the local and national economies. While new home sales slowed in March and April 2020 due to the onset of the COVID pandemic, both sales and prices increased significantly throughout COVID until spring 2022 when interest rate increases began affecting the home-buying market. The rising interest rates alone did not seem to slow sales in Spring _________________________________________________________________________________________________________ Appraisal Report
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2022. However, a combination of increasing home prices and falling consumer confidence, added to the significant interest rate increases slowed new home sales significantly in late 2022 and the beginning of 2023.

Per the Zonda National Economic and Housing Market Update in July 2023, the rate of growth of new home sales is off from recent highs but up from pre- pandemic numbers, suggesting a healthy market. Per their survey of over 300 new-home builders nationally, the builders are stating sales are continuing but report they had to adjust pricing and incentives to “find the market.” In the January 2023 survey, 50 percent of builders surveyed were lowering their prices and the remaining 50 percent stated their pricing was flat. In July, the survey resulted in 54 percent of the builders stating they are raising their prices and 46 percent of builders stating they were keeping prices flat or decreasing pricing. This is a very different dynamic which is partly due to seasonality, partly due to builder’s readjusting concessions (interest rate buy -downs), and partly due to price changes. The larger public homebuilders are typically offering significant interest rate buy-downs in order to keep absorption rates steady, which is reportedly costing between $30,000 to $100,000 in incentives. The builders are attempting to find the “sweet spot” in incentives. Per Zonda a combination of price cuts of between 10- 15 percent combined with a rate buy down is obtaining the best results in the marketplace.

Home loan mortgage rates have been and are still playing a huge part in the housing market. The Board held mortgage rates at all -time lows after the Great Recession and again after the COVID Recession in an attempt to assist the housing market’s recovery.

Low rates helped home sales during this time. However, first-time buyers are now having a hard time entering the housing market due to rising prices and rising interest rates. Per FRED, the average 30-year fixed mortgage has gone from 2.65 percent in January 2021 to 7.08 percent as in October 2022, with a decrease since then with current rates at 6.96 percent as of July 13, 2023. Mortgage applications had been spiking in late 2020 and 2021 due to the low rates and the fear rates were going to start ticking up, which began happening in March 2022. The Board has increased the rate ten times in the past 15 months, which increased the FRR from 0-0.25 percent to 5.00-5.25 percent. At the latest _________________________________________________________________________________________________________ Appraisal Report
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Board meeting in mid-June, they paused the increases for the month and suggested there may be additional increases later this year. Most economists believe there will be an increase at the July Board meeting with the anticipated increase of 0.25 percent. The FRR increases are supposed to help slow the high inflation rate in the Nation, which appears to be occurring as the latest reports are showing inflation in June 2023 at 3.1 percent, down from a high of 9.1 percent in June 2022. The Board has other considerations including employment numbers, wage growth and consumer confidence to balance along with inflation.

While new home builders slowed production as sales slowed in 2022, the spring of 2023 brought optimism to builders once again. Sales were up month- over-month as buyers adjusted to higher mortgage rates and existing home inventory is at all-time lows. Existing homeowners that are locked into a 3 percent mortgage are not moving up due to the current 6+ percent rates. This is creating a supply issue for exi sting homes. New home sales are benefiting from this supply issue as in some cases, the only option for homebuyers are new homes. Per Zonda, historically, new homes capture 10 to 13 percent of all home sales; however, due to the limited supply of existing homes currently on the market, new homes are capturing well over 30 percent of all home sales in the Inland Empire.

Residential Land Development
While there had been little land development going on in most of the Inland Empire during the Great Recession years 2008-2011, the second half of 2012 saw a resurgence in the more coveted areas of the Inland Empire. The increase in housing prices since 2012 combined with the limited availability of supply made land development feasible once again for homebuilders. It is thought that the increase in regulations, which has significantly increased the timeline for processing entitlements, has limited the master developers’ further entitlement of developable land in California. While prior to the recession it was not unusual to see numerous large master-planned communities selling lots to various builders, there are few currently available in the subject area. The majority of land sales over the past few years include single tracts of land with maps ready to _________________________________________________________________________________________________________ Appraisal Report
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record or a public builder buying a larger piece of land but develops the land for its own use, such as Aurora by TriPointe Homes (subject property), The Arboretum by Lennar , Monterado by Lennar and Nara Hills by Landsea Homes, all located in Fontana.

Land sales in the Inland Empire slowly grew from 2012 up to a peak in 2017, with 2018 and 2019 showing lower land transactions. Once home sales exploded in May 2020, land sales followed with a significant number of residential land sales to builders in the Inland Empire during the second half of 2020 and throughout 2021. In late 2021 and early 2022, prior to the F RR increases, builders were paying significantly more for residential land that was ready to develop as demand was up and supply was shrinking. The beginning of 2022 continued with strong residential land sales until May, when sales began to fall sharply. According to Zonda’s survey of builders regarding residential land purchases, as of January 2023 only 2 percent of builders surveyed were “full steam ahead,” and almost 40 percent were pausing transactions or bidding lower on land transactions. As of July 2023, these percentages have changed drastically with 35 percent stating they are going “full steam ahead” and 41 percent moving “cautiously forward.” The increase in optimism from new home builders outlook since January is partially due to the extreme slowdown of existing home inventory.

New Home Sales and Pricing
We have researched new single- family homes within the subject’s market in order to reflect residential trends. It should be noted these sales numbers and prices pertain to new home sales while later in this section we discuss existing home sales. In review ing new home sales in the Inland Empire market area, per the July 16, 2023 Ryness Report, the year-to-date average sales rate (4.03 sales per month) is 10 percent lower than the same time period of the previous year (4.46 sales per month). Surprisingly, even with the increases in pricing and mortgage rates, sales of new homes are occurring at a very good pace; however this is partially due to the extreme limited supply of existing homes which is creating more demand for new homes. New home sales rates started to level off in late Spring 2022, likely due to the increase in mortgage interest rates. As rates go down, purchasing power becomes larger, which gives new-home buying a boost. However, the _________________________________________________________________________________________________________ Appraisal Report
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flip side is that as interest rates rise, purchasing power becomes lower and therefore fewer people purchase new homes. Along with home sales comes a demand for appliances, furniture, building materials and services such as insurance, mortgage services, in spections, interior designers, and landscapers, all contributing to the area economy.

When comparing the July 16, 2023, Inland Empire Ryness Report to one year prior, there are 36 additional projects (213 in July 2022 and 249 in July 2023) and sales are about 10 percent lower year -to-date than the previous year. This does not appear to be due to limited inventory as there are additional projects, but rather because of an actual slowdown in sales activity likely due to the increase in interest rates. It should be noted that current sales rates are being compared to t he shifting market of Spri ng/Summer of 2022. To put this in perspective, when comparing year to date average new home sales from July 2022 to July 2023, average sales numbers in the Inland Empire are down 10 percent (per the Ryness Report dated July 16, 2023); however, when comparing year to date average new home sales from July 2019 (prior to the pandemic) to July 2023, sales are actually 20 percent stronger (3.38 sales per month year-to-date average in July 2019 versus 4.03 sales per month year-to-date average in July 2023).

New single -family home pricing (combines both attached and detached) in the Inland Empire has also seen changes. The median new home price in the Inland Empire changed from the peak value of $437,200 in the third quarter of 2006 to $268,155 in early 2009 (decrease of 39 percent) while the current Inland Empire median new home price is $525,000 which is down from a record high of $646,000 in July 2022 per Zonda’s latest market report (Riverside-San Bernardino-Ontario, CA CBSA April 2023). This reflects an increase of over 95 percent from the bottom of the cycle and an increase of more than 20 percent over its peak during the Great Recession, however a decrease from the 2022 peak of 18.7 percent. In reality, this decrease is actually larger as builders are buy ing down interest rates which costs the builder at times, up to $100,000, however, the amount is not reflected in the recorded sales price. New home sale prices fluctuate based on the land value and competition more than on the cost of building the home. While finishes _________________________________________________________________________________________________________ Appraisal Report
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and sizes of homes can change, the basic costs on a per square foot basis typically do not fluctuate as much as land values; however, there have been inflationary increases in construction costs adding to this increase.

We have reviewed Empire Economics’ Price Point Review Study on Fontana CFD No. 100 (Victoria) dated July 17, 2023. Empire Economics did an original Price Point Study on the project in August 2020 in order to determine their market value for the various plans within the Aurora (formerly known as Victoria). The “Review Study” is to ascertain if the prices have increased or decreased since the original Study. The Empire Economics Price Point Review Study concluded that, in all cases, the current market value conclusions of the homes was, on average, 29 – 30 percent higher than the original market value conclusions in 2020.

Within our search for the most comparable actively selling new home communities, we searched the subject’s city of Fontana, which currently features a multitude of actively selling new home communities . We found 10 communities comparable to Aurora Park.

The comparables have base prices ranging from $514,990 to $857,105 While both Goldenrod’s and Sienna’s base prices range from $567,000 to $742,000, which falls well within the range of comparable new homes in the area.

Existing Homes Sales and Pricing
While the previous section looked at new home sales and pricing, this section refers to existing homes in the Inland Empire. According to the California Association of Realtors’ most recent data, within overall Southern California, the median price paid for an existing single-family home in June 2023 ($815,000) reflects a decrease of 1.8 percent from the previous year ($830,000 June 2022) however a 1.9 percent increase from the previous month ($800,000 in May 2023). Existing home sales in Southern Californi a overall were down 19.4 percent year -over-year as of June 2023. The overall Southern California numbers compare to San Bernardino County with $470,000 as the median price paid for an existing home in the County in June 2023, down 4.1 percent from the previous year ($490,000 June 2022) and an increase of 3.3 percent from the previous month ($455,000 in May 2023). Sales of existing homes in the County were down 23.2 percent year-over- _________________________________________________________________________________________________________ Appraisal Report
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year due to higher mortgage rates and high home prices. It is interesting to note that San Bernardino County has had a similar drop in price in the past year and increase in price since the past month, in line with what’s happening in the Southern California market. The slower sales rates in the existing home sales market are reflective of homeowners not ready to sell due to the changing market. Historically, the new home market captures 10- 13 percent of the overall home sales; however, in the past year, new home sales are capturing over 30 percent of total home sales. Below is a table showing the sales and prices for the Southern California area by County per the California Association of Realtors.

Southern California Existing Home Sales
County June 2023 May 2023 June 2022
Price MTM
% Change
Price YTY
% Change
Sales YTY
% Change
Los Angeles $832,310 $744,770 $860,230 11.8% -3.2% -19.1% Orange $1,260,000 $1,256,500 $1,265,000 0.3% -0.4% -12.2% Riverside $628,000 $629,000 $645,000 -0.2% -2.6% -16.0% San Bernardino $470,000 $455,000 $490,000 3.3% -4.1% -23.2% San Diego $958,250 $935,000 $950,000 2.5% 0.9% -24.3%
Ventura $927,500 $925,500 $930,000 0.2% -0.3% -24.3%
Southern Calif. $815,000 $800,000 $830,000 1.9% -1.8% -19.4% Source: California Association of Realtors

Based on June 2023 median existing homes prices, in comparison to all of the surrounding counties, San Bernardino County has a definite price advantage. The “San Bernardino County Advantage” (price difference between San Bernardino and surrounding counties) is $158,000 as compared to Riverside County, $362,310 as compared to Los Angeles County, $457,500 as compared to Ventura County, $488,250 as compared to San Diego County and $790,000 as compared to Orange County. That is, in June 2023, the median priced home in San Bernar dino County was $790,000 less than the median priced home in Orange County ($1, 260,000). Typically, as the price advantage widens, homebuyers are more open to commuting to further out areas. With the current work-from-home concept, the suburban areas have seen more growth which put pressure on home prices in the Inland Empire. It’s worth noting that June of 2022 was the first month where the majority of Southern California counties showed medi an price decreases from the previous month and May 2023 showed median prices beginning to _________________________________________________________________________________________________________ Appraisal Report
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rise suggesting that pricing may have hit bottom; however, this is due to minimal inventory/supply which is upsetting the balance in the housing market.

In a separate attempt to capture the amount of increase in home prices, the resale activity of existing homes in the subject’s immediate area (per Redfin.com) has been reviewed.

The number of sales and sale prices of existing homes within market areas surrounding the subject are shown in the table below.

Community
Name
Location
To Subject
No. of
Sales
June ‘23
Sales %
Change from
June ‘22
Jan. ‘23
Median
Sale Price
Price %
Change
from Jan.
‘22
North Fontana Larger Subject Vicinity 66 N/A $691,000 -3.8% Etiwanda West 26 -27.7% $1,132,000 8.7%
Rancho Fontana South 9 -66.6% $692,000 -1.8%
Citrus Heights South Northeast 4 -33.3% $821,500 2.7%
Walnut Village Immediate East 7 -46.1% $570,000 -9.5%
Rialto Far East 45 -6.0% $550,000 0.0%
Summit Heights North 7 -41.6% $715,000 -8.7%
Sierra Lakes Northeast 17 13/0% $718,000 1.1%
West End Southwest 24 -14.3% $647,500 -6.2%
Source: Redfin Housing Market Trends January 2023

The median home price of a detached resale home in the subject’s vicinity of North Fontana in June 2023 was $691,000, which is within the range of the resale detached home prices in the subject area. The low -end of the range relates to the Walnut Village and Rialto areas, which have older homes, while the high- end of the range relates to Etiwanda. Etiwanda is an upscale Rancho Cucamonga neighborhood on the west side of I-15, and stands as an outlier in the subject’s marketplace. This is because of Rancho Cucamonga’s more desirable address as well as Etiwanda’s highly ranked public schools.

The above price fluctuations from year-to-year relate to the California Department of Real Estate’s overall San Bernardino County detached home resale price increase of 3.3 percent year-over-year from June 2022 to June 2023 . This s uggests that the subject’s immediate marketplace is largely outperforming the County as a whole.

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According to the Ryness Report dated July 16 , 2023, there are currently 38 new home projects in the subject’s Central and East San Bernardino submarket s, with the City of Fontana housing 20 of them (including the subject’s two).

Aurora Park - Sales and Pricing
Aurora Park is comprised of 193 single family homes with marketed sizes from 1,879 to 2,743 square feet. Aurora Park grand opened in December of 2021, with opening base pricing ranging from $ 648,000 to $752,000. Current base pricing at Aurora Park ranges from $567,000 to $742,000 which is 1.3 to 12.8 percent lower than opening base prices.

Specifically, Sienna appears to have had a larger price reduction, with differences of $70,000 to $87,000 (10.1 to 12.8 percent), while Goldenrod’s prices have dropped significantly less ($10,000 to $17,000, or 1.3 to 2.7 percent). Actual closed prices, including options, upgrades, premiums, and concessions, have ranged from $529,451 to $852,048. The difference between the base pricing and the actual pricing is options, upgrades and premiums paid by the buyer offset by concessions given by the builder.

The net closing cost and rate buy down concessions for the 91 sales within the subject property average $13,341.60 per unit. These concessions are not considered in the reported sales prices and are decided on a case-by-case basis and have increased over the past eight months due to fluctuating mortgage rates. Within the subject, TriPointe has sold and closed 72 homes to individuals, with an additional 19 homes in escrow which are due to close at completion. The total of 91 sales equates to an absorption rate of 4.8 sales per month spread across the two product types (2.6 sales per month for Sienna and

2.2 sales per month for Goldenrod). This is considered to be a slower absorption rate for the subject marketplace. It should be noted that the community has had large time lapses in between phase releases, and therefore have been temporarily sold out with no available homes for sale from time to time, due to construction and weather delays, along with some architectural changes. Per the Ryness Report, a new home tracking service, as of July 16 , 2023 the year -to-date average sales per project per month in the Inland Empire is 4.5 homes; nearly double the average sales pace of Sienna and Goldenrod.

The Inland Empire had seen substantial increases in pricing since 2012 with most areas, including the subject, showing astronomical increases from mid-2020 through early 2022.

While existing home sales were originally down when COVID began in spring/early summer 2020, new home sales subsequently shot up due to the existing home market supply being constrained and interest rates hitting all -time lows. The latest statistics indicate a slowdown in sales as interest rates have risen substantially. The Fontana new- home submarket is performing in line with the Inland Empire market as a whole. The subject market area saw an increase in pricing consistent with most of Southern California throughout 2020 and 2021 and appeared to be continuing in the beginning of 2022. The past year has seen sales slow and prices lowering; however, the past couple months have seen new home builders’ optimism return as new home absorption is generally increasing. Despite uncertainty hitting the market due to rising interest rates and inflation, most observers agree that the Inland Empire housing market is healthy and population growth is still estimated to occur in the area. It is believed that as the population continues to increase, housing growth will also continue, despite a slowdown. _________________________________________________________________________________________________________ Appraisal Report
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HIGHEST AND BEST USE ANALYSIS

The highest and best use is a basic concept in real estate valuation due to the fact that it represents the underlying premise (i.e., land use) upon which the estimate of value is based. In this report, the highest and best use is defined as:

"the reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value”
5 Proper application of this analysis requires the subject properties to first be considered “As If Vacant” in order to identify the “ideal” improvements in terms of use, size and timing of development. The existing improvements (if any) are then compared to the “i deal” improvements to determine if the use should be continued, altered or demolished preparatory to redevelopment of the site with a more productive or ideal use.

“As If Vacant”
In the following analysis, we have considered the sites probable uses, or those uses which are physically possible; the legality of use, or those uses which are allowed by zoning or deed restrictions; the financially feasible uses, or those uses which generate a positive return on investment; and the maximally productive uses, or those probable permissible uses which combine to give the owner of the land the highest net return on value in the foreseeable future.

Physically Possible Uses
The subject property is rectangular in shape, consists of 21.539 gross acres and 19.147 net acres per recorded Tract Map No. 20229 . The site is located in the northwestern portion of the City of Fontana, at the southwest corner of Victoria Street and Kestrel Drive, just east of I-15. The lands are generally at street grade of surrounding streets and I-15, with existing residential homes to the south, vacant lands to the east, a California Highway Patrol and Caltrans facility to the north, and RV/Boat storage facility to the west, beyond which is I-15.

5 The Appraisal of Real Estate, 11th Edition
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The subject site has been graded for 193 single family homes: 82 pads for detached alley load homes and 111 pads for detached cluster homes. The homes area all detached but are technically condominiums, sitting on HOA owned parcels containing approximately 2,000 square feet. We have reviewed an Environmental Site Assessment along with a Soils Report on the subject site. All reports reviewed concluded that the development of the site into single- family residential use is feasible; however, all mitigation measures recommended within the reports should be adhered to during const ruction. It is an assumption of this report that the soils are adequate to support the highest and best use, and that there are no environmental issues which would slow or thwart development of the property. This is evidenced by existing homes on the site which were recently built with City inspectors on site during construction.

An engineered drainage system appears to have been designed into a street drainage system for the entire tract. All standard utilities are available to serve the subject property.

The site has good access via I-15, exit Baseline Avenue to North Heritage Circle Drive; or from I -210 exit Cherry Avenue to Victoria Street . There is neighborhood shopping within one mile of the subject at Baseline and Cherry Avenue.

Based on the physical analysis, the size and access make the subject property physically suited for numerous types of development; however, the grading that has occurred on the site suggests residential development.

Legality of Use
The subject property is located within the City of Fontana in the County of San Bernardino.

Per the City’s General Plan Land Use Map, the subject site is shown as R-M, or Medium Density Residential with 5.1 -12 du/acre. The subject lands fall within the West Gate Specific Plan, which denotes the subject as Planning Area 50 with 10,000 square foot lots (or 0 -5 du/acre) . Specific Plan Amendment No. 18- 004 was approved by the City to change the designation to R-2 Cluster (Residential 5.1 – 12.0 dwelling units per acre). In addition to the General Plan and Specific Plan zoning, the subject is covered by recorded Tract Map No. 20229 (recorded June 17, 2021) which subdivides the subject property into a single lot along with condominium maps which divide the property into 1 93 single- _________________________________________________________________________________________________________ Appraisal Report
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family units (pads for 82 alley load detached condominiums and 111 cluster detached condominiums), along with a community center and pool /spa, tot lot, gazebo area, outdoor exercise area, covered eating areas, setback areas and internal streets . The approved mapping results in a density of 10.08 dwelling units per acre based on the net acreage which is within the approved designation.

Based on the legality of use analysis, the type of development for which the subject properties can be utilized is narrowed to residential use. This is consistent with the findings of the physically possible uses.

Feasibility of Development
The third and fourth considerations in the highest and best use analysis are economic in nature, i.e., the use that can be expected to be most profitable. As discussed under the Inland Empire Housing Market section earlier within this report, the market showed strong increases in both sales and pricing in 2020, 2021 and the beginning of 2022. The second half of 2022 and the beginning of 2023 reflected a slowdown in sales and a softening in prices as interest rates have risen substantially. The slowdown in the second half of 2022 resulted in builder’s either pausing on escrows or dropping escrows resulting in few actual closings in the past twelve months. However, builders are once again entering escrows and moving forward on older escrows as new home buyers are continuing to purchase homes, even with the higher mortgage rates. Within Fontana CFD No. 100, out of 193 proposed houses, there have been 91 home sales to date including 72 home closings.

All structures appear to be in excellent condition with no physical depreciation apparent.

Within the new home market in the Fontana area, we found ten projects to be comparable to the subject ’s product lines. Homebuilding ha d not been able to keep up with the demand in 2020 and 2021 due to several factors including historically low interest rates, millennials joining the home buying market and the work from home factor which all add to the demand. While the market softened in the second half of 2022, the Inland Empire is still seeing demand and new homes are still selling. Our search for land sales found 10 land sales in the market area that we consider to be comparable. Population growth is still occurring in the area and will continue to create the need for housing. Based on the _________________________________________________________________________________________________________ Appraisal Report
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above analysis, the highest and best use for the subject property appears to be for single- family detached residential development at the right price points.

Maximum Productivity
Based on the market activity of residential lands in the immediate area, we have concluded there is a need/demand for residential lands.

Highest and Best Use Conclusion – “As If Vacant”
The final determinant of highest and best use, as if vacant, is the interaction of the previously discussed factors (i.e., physical, legal, financial feasibility and maximum productivity considerations). Based upon the foregoing analysis, it is our opinion that the highest and best use for the subject property is for residential land use.

Highest and Best Use – “As Improved”
The subject property consists of Sienna at Aurora Park and Goldenrod at Aurora Park, with 193 total proposed homes which are currently being marketed by TriPointe Homes.

Aurora Park began selling in December of 2021 and has sold 91 homes, reflecting a sales rate of approximately 4.8 sales per month spread across the two product lines .

Independently, Sienna has an average absorption rate of 2.6 sales per month while Goldenrod has an average absorption rate of 2.2 homes per month. Base prices at Aurora Park have decreased since grand opening, with base price decreases of 10.1 to 12.8 percent at Sienna (with most recent base pricing ranging from $567,000 to $622,000) and

1.3 to 2.5 percent at Goldenrod (with most recent base pricing ranging from $657,000 to $742,000). In marketing the homes, the builder is offering closing cost and rate buy down concessions on a case-by-case basis. These concessions have ranged from $ 0 to $38,500 with an average of $13,341.60 on the 91 sales to date. While the incentives are showing a softening market, per Empire Economics’ Price Point Review Study, the plan pricing has increased on aver age 33-34 percent between proposed pricing in 2020 and current pricing. The sales absorption rate within Aurora Park is considered to be slower than the average, however they have struggled with having homes available to sale with long lapses between phase releases due to construction and weather delays . As discussed under the Inland Empire Housing Market section, within the Inland Empire, the _________________________________________________________________________________________________________ Appraisal Report
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year-to-date average sales per project is 4.0 homes per month, which the subject is underperforming (at 2.6 and 2.2 sales per month per product line) . This is due in part to delays between phase releases and a lack of homes to sell. All of the homes are of good design and appear to be of good quality workmanship. There is currently one home listed as a resale that has been on the market for 78 days with no offers. The seller is asking for over 25 percent above the base price of the plan. It appears the sel ler may be attempting to take advantage of the current low supply of homes on the market. It appears that Aurora Park is being generally well received, despite the phase release lags, and the neighborhood is selling at the correct price points for the area. Based on the above information, it is concluded that the highest and best use for the subject property, is for the continued use, as improved.
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VALUATION ANALYSIS AND CONCLUSIONS

The Sales Comparison Approach will be used to value the subject property. This approach compares similar properties that have recently sold or are in escrow. In determining the value for the property, a unit of comparison needs to be addressed. For both attached and small lot cluster residential lands, they are typically sold on the basis of a finished pad for a townhome unit or finished lot for a detached unit. That is, the sales price is determined by a finished pad or lot value and then the remaining costs to develop the property to a finished condition are taken into account in the sales price. Therefore, in determining a current market value for the lands, the current condition of the lots will be considered. Our search revealed several projects similar to the subject in that they have some attached and some cluster lots. These transactions are typically looked at on a blended price per unit, taking into consideration the overall density of the project.

In the case of the completed home valuations , a single new -home is the unit of comparison. Our search will include all new home projects within the subject’s immediate and surrounding market area to find comparable new homes for sale. In determining the value for each house, a base value will be concluded for each plan which will be considered a minimum market value as most buyers typically purchase some premiums, upgrades or options which increase the price of the home.

For the completed (over 95 percent complete) builder -owned models and production houses, the homes will be valued using the Sales Comparison Approach to conclude on a retail value for each plan, followed by a Discounted Cash Flow (“DCF”) Analysis due to the s ingle ownership. The DCF will take into account the fair market value of the completed homes (utilizing the Sales Comparison Approach), remaining development costs (if any), the marketing and carrying costs associated with selling off the homes, a profit due to the developer of the homes, and a discount rate reflecting both the risk associated with selling off the homes along with the time value of money during the estimated absorption period. A home under construction (under 95 percent complete) will be valued as a finished lot rather than attribute value to a partially complete improvement. _________________________________________________________________________________________________________ Appraisal Report
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In the case of the individually owned homes, the concluded base value will be used for each plan and a mass appraisal technique will be addressed. In determining the concluded base value, new home sales in the area will be reviewed and compared with sales of the subject completed homes using standard methodology and statistical testing.

All of the value conclusions will take into consideration improvements and/or benefits to be funded by the Fontana CFD No. 100 Special Tax Bonds and their lien. A summary of the final value conclusions will be reported at the end of this valuation section.

Market Data Discussion – Residential Lots

Within Aurora Park , there are 19 3 pads in a physically finished condition, with 72 completed homes individually owned, 16 TriPointe-owned homes that are complete or nearly complete ( including six model homes and an unfurnished, but completed production home being utilized as the sales center, located in the model complex ), 11 TriPointe-owned homes that are under construction (under 95 percent complete), and 94 additional finished lots/pads (16 owned by TriPointe and 78 owned by Resmark) . As we are valuing a home under construction (under 95 percent complete) on the basis of a finished lot/pad, we will be valuing 105 lots/pads in our analysis: 27 owned by TriPointe and 78 owned by Resmark. Please refer to Page 2 of this Appraisal Report to see the detailed ownership per unit.

We have searched the area and found the ten transactions summarized in the Addenda to be most comparable to the subject property. The sales are reported both on a purchase price basis and on a finished lot basis. The actual purchase price is typically less, depending on the condition of the land (lots or pads) at the time the property was acquired.

Although some sales refer to “finished lots/pads,” they are typically physically finished lots/pads with some fees remaining to be paid to be considered true fi nished lots/pads.

Below are the details of each of the comparable land sales along with a discussion of each transaction in relationship to the subject property.

Land Sale No. 1 refers to the purchase of a 6.79-acre site located in Fontana about 2.75 miles east of the subject site. RC Homes is planning a new product which includes homes _________________________________________________________________________________________________________ Appraisal Report
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on approximately 6,000 square foot lots, however each home will have an ADU for separate living. Based on the sales price and cost estimates from brokers familiar with the transaction, the site was purchased for $3,525,000 which relates to $76,630 per lot based on the detached 6,000 square foot lots with an estimated finished lot value of $315,000. When looking at the site on the basis of 92 units (total number of units including the ADUs) the cost is $38,315 per unit or $165,000 per finished pad. In comparison to the subject property this location is considered to be slightly inferior (further out from Los Angeles/Orange Counties for commuters). When comparing the 92 units to the subject, this transaction is also considered to be inferior in overall density (13.5 dwelling units per acre versus the subject’s 10 dwelling units per acre. When comparing the 46 unit to the subject, this transaction is considered superior in overall density (6.7 dwelling units per acre versus the subject’s 10 dwelling units per acre).

Land Sale No. 2 refers to the purchase of proposed townhomes located at the northwest corner of Pine and Meadowhouse Avenues within the master planned community of the Preserve, located in Chino about f ourteen miles southwest of the subject. The Preserve is a successful master planned community with significant amenities which has been offering lots to homebuilders over the past 10 years. Beazer Homes purchased the site in June 2022 for $19,952,500 or $133,909 for each of the 149 units based on a reported finished lot price of $205,000. The product consists of 2 and 3-story attached townhomes with an overall density of 14 dwelling units pe r acre. The lands closed in an unimproved condition with an approved tentative tract map. In comparison to the subject property, this transaction is considered to be inferior due to the higher density and the fact that this product is for all attached units versus the subject’s detached product. In addition, this sale is considered to be superior due to closing in June 2022, prior to the majority of the softening in the subject market.

Land Sale No. 3 pertains to the Meritage Homes purchase of an assemblage of land in Redlands, northwest of Texas Street and Domestic Avenue about 18 miles southeast of the subject site. The parcels were all raw land at time of sale. The site was in the East Valley Corridor Specific Plan designated for science research park; however, in May _________________________________________________________________________________________________________ Appraisal Report
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2021, Meritage Homes processed the Bergamot Specific Plan which was approved by the City along with a change of zoning allowing for 317 dwelling units including: 53 single- family detached (“SFD”) lots with a minimum square footage of 7,200; 144 SFD lots with a minimum size of 3,500 square feet; and, 120 motor-court cluster SFD lots with a density of 10 dwelling units per acre. Meritage assembled and purchased the parcels from four landowners and closed between April 13
th and June 8 th, 2022. The lands were tied up
over one-year prior. The total price for the lands was $16,657,000 and the finish lot price (blended for all three products) equated to $193,000. In comparison to the subject property this location is considered to be superior due to the lot size (7,200, 3,500 and 2,000 square feet versus the subject’s alley loaded and clust er units). This transaction was negotiated in early 2021, prior to a substantial amount of appreciation in the subject marketplace. The condition of the lands for this transaction is considered to be significantly inferior as they were in a raw land state and the buyer changed the zoning and processed the mapping as compared to the subject finished lots, ready to build.

While the co sts are accounted for in the estimated finished lot price, the risk of development, processing time and market conditions are not considered.

Land Sale No. 4 and 5 refer to two land sales in Pomona which is located about 15 miles west of Fontana. Land Sale No. 4 refers to a land sale for 156 proposed units about 15 miles southwest of the subject at Garey and Rio Rancho Road. Century Communities purchased the site with entitlements for 41 detached cluster lots and 115 three story attached townhomes in April 2022. The seller of the property was the Pomona Unified School District with another builder (Melia Homes) optioning the property and processing entitlements and then selling their position to Century Communities. The overall density of the site is 17 dwelling units per acre which is considered to be significantly inferior to the subject property’s 10 dwelling units per acre. Century Communities purchased the stie for $13,400,000 or for $85,897 per unit. We were not able to obtain actual finishing costs; however, based on historical costs and development fees in the area, the blended finished pad is es timated at $185,897 per unit. Land Sale No. 5 refers to Crestwood Communities purchase of 38 lots, located about 14 miles west of the subject site.

Crestwood purchased the site for $4,695,000 or $123,553 per unit for the 38 small, _________________________________________________________________________________________________________ Appraisal Report
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detached lots. The overall density of this site is 10 dwelling units per acre which is considered to be similar to the subject. Again, we were unable to obtain actual finishing costs. However, based on historical costs and development fees, the finished lot is estimated at around $238,553. This transaction also closed in April 2022. Crestwood is planning to continue their previously sold -out Crestwood at Valencia project on the site.

Due to the finished lot numbers being estimates, less emphasis will be placed on th ese two transactions. We have included them to show the activity in the subject marketplace.

Data No. 7 pertains to the January 2022 purchase of 56 units located at the southwest corner of Bonnie View Drive and Willow Avenue in Rialto, about ten miles south of the subject site. Century Communities purchased the property from Koba Properties for $3,290,000 or $58,750 per unit based on a reported finished lot estimated at $188,000 per brokers familiar with the transaction. The site was unimproved at time of sale with an approved Tentative Tract Map and entitlements for 56 units with an overall densit y of 12 dwelling units per acre. In comparison to the subject site, the density is higher (considered inferior) and the Rialto location is considered to be inferior to the subject’s Fontana location; however, this comparable is superior in terms of the date of sale.

Land Sale No. 8 refers to the sale of 526 lots which are known as the Gardens at Arboretum. Lennar Homes purchased the acreage which is located about four miles northeast of the subject site, from Lewis Group of Companies (North Fontana Investment Company) in December 2021 for $91,935,500 per public record. The purchase included at total of 526 units made up of 69 triplex units, 99 cluster lots with a minimum size of 2,200, 109 cluster lots with a minimum size of 2,600, 97 lots with a minimum lot size of 4,000 square feet, 88 lots with a minimum lot size of 4,100 square feet and 64 lots with a minimum lot size of 6,000 square feet. We were unable to obtain finished lot /pad estimates on each product however brokers familiar with the transaction reported the blended finished lot price is estimated at $274,000. In comparison to the subject property, this transaction is considered to be superior in date of sale and lot size /overall density (4.0 dwelling units per acre versus the subject’s 10 dwelling units per acre). It should be noted that this transaction is considered a bulk sale due to the number of lots/pads which _________________________________________________________________________________________________________ Appraisal Report
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would have commanded a discount, making this transaction inferior to the subject when looking at number of pads/lots.

Land Sale No. 9 pertains to the purchase of 107 lots located at the northeast corner of San Savaine Road and South Highland Avenue in Fontana, about 1.8 miles northeast of the subject property. Richmond American purchased the lands which had approvals for 46 alley loaded lots and 61 motorcourt cluster lots from the Stratham Group in December 2021 for $18,691,821 based on a reported blended finished lot price of $285,000. The site is adjacent to the 210 Freeway. Richmond American Homes is currently selling their Cascade at Highlands project is on the conventional small lots with homes from 1,860 to 2,060 square feet and current base pricing from $56 0,990 to $596,990; and their Talise product with sizing from 1,410 to 1,950 square feet with current base pricing from $499,990 to $573,990. The overall density of this transaction is 10 dwelling units per acre, similar to the subject . This transaction is considered to be most similar to the subject property with the exception of date of sale. This property sold in December 2021 when mortgage rates were in the 3.0 percent range and average sales rates were in the 4 to 6 homes per month range.

Land Sale No. 10 refers to the purchase by Landsea Homes of 489 units located about

3.5 miles north of the subject , northwest of Duncan Canyon Road and Interstate 15.

Landsea purchased the site in September 2021 from Richland Communities who had entitled and processed engineering on the site. The site is raw land with mapping for 129 townhomes, 127 motorcourt cluster lots, 79 lots with a minimum size of 5,000 square feet, and 154 lots with a minimum lot size of 10,000 square feet. The property was reportedl y purchased for $42,736,000 or a blended per unit price of $87, 395, based on a blended finished lot/pad price of $2 85,000. The significant cost to develop the lots/pads (almost $200,000 per unit) is due to the hillside condition of a portion of the site. In comparison to the subject property, this transaction is considered to be superior due about one-half of the lots being minimum 5,000 and minimum 10,000 square feet. In addition, this transaction is considered to be i nferior due to the number of lots (considered a bulk purchase) and due to the amount of grading needed on the property. While the actual _________________________________________________________________________________________________________ Appraisal Report
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costs of land development are taken into consideration, there is higher risk associated with the development (both time of development and grading risk), while the subject lots are all graded and finished.

The chart below summarizes the considerations used in adjusting the market data to the subject property.

Data
No. Location Date of
Sale
Lot Size /
Density
Finished
Lot Price Comparison to Subject
1 Fontana 10/22 13.5 du/ac
Det w/ ADU
$315,000 /
$165,000 Slightly inferior – location
2 Chino 6/22
14 du/ac
Attached

$205,000 Superior - Amenities, Date of Sale,
Inferior – Density / all attached
3 Redlands 4 / 22
7,200
3,500
Cluster

5.3 du/ac
$193,000
Blended
Superior – Overall density & Date of
Sale
Inferior – Condition
4 Pomona 4 / 22 17 du/ac
Attached $185,897* Superior – Date of Sale
Inferior – Density / All Attached
5 Pomona 4 / 22 10 du/ac
Cluster $238,553* Similar
6 Rialto 1/22 12 du/ac $188,000 Superior – Date of Sale Inferior - Location
7 Jurupa Valley 12 / 21 Cluster

3.7 du/ac $205,000 Superior – Date of Sale, Density
Inferior - Condition
8 Arboretum,
Fontana 12 / 21
Triplex up to
6,000 sf / 4
du/ac
$274,000 Superior – Date of Sale
Inferior – Number of Lots & Condition
9 Fontana 12 / 21 Small Lot /

10.3 du/ac $285,000 Superior – Date of Sale
Inferior – Freeway Frontage
10 Fontana 9 / 21
Attach to
10,000 sf /
N/A
$285,000 Superior – Lot size & Density
Inferior – Number of Lots & Condition

As discussed under the Inland Empire County Housing Market section earlier within this report the Inland Empire real estate market rose significantly between January 2020 and June 2022, softened in mid-2022 and appears to have found its bottom and stabilized in mid-2023. Median home pricing rose approximately fifty percent between January 2020 and June 2022, however a decrease was seen for about a year, with pricing appearing to rise, once again more recently in 2023 (according to the California Association of Realtor’s). The increases for ex isting single-family homes in San Bernardino were 16.5 percent in 2020; 1 7.9 percent in 2021, 8.8 percent the first six months of 2022, a 9.5 percent decline until the end of 2022 and an approximate 4.0 percent increase since then. _________________________________________________________________________________________________________ Appraisal Report
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While the new home price fluctuations do affect the quality of the home (higher finishes with higher prices), most of the price fluctuations fall to the land value.

The above market data depicts a wide range of overall finished lot/pad price range from $165,000 to $315,000 with the low end being for a new product type consisting of a home with an ADU on the same lot (based on two units per lot) and the high end being based on only the single home on the lot. The remainder of the market data ranges from $185,000 to $285,000. The market data that sold based on a finished lot under $200,000 relates to unimproved lands (Data No. 3), a significantly higher density (Data No. 4) and an inferior location (Data No. 6). While the estimated costs of the improvements to get to a finished lot are included in the finished lot price, raw land also includes risk of development and the time it takes to process entitlements and plans on the site. The higher density product (Data No. 5) includes all attached units, while the subject lots are all detached, which is considered significantly superior. Data No. 6 is located in Rialto with a median home price of $550,000 while Fontana has a median home price of $615,000. The subject was purchased in June 2021 based on a finished lot value estimate of approximately $221,000, however this was prior to significant appreciation in the marketplace. From June 2021 through June 2022 , land transactions became more frequent as homes were selling at increased rates due to the low interest rates and work from home factor; thus builders, at times, paid a premium for the land. In the past year , land sale closings have become sparse as new home prices have fallen with no new closings in the subject market since October of 2022. New homebuilders had purchased land based on the higher new home sales rates and now that sales have slowed significantly, they are bui lding out the land purchased over the past year or two much slower than originally anticipated.

Our search of the subject area resulted in two escrows for similar density projects in Fontana which were cancelled in early 2023, however one has recently gone back under contract. These were located at the northeast and northwest corner of Citrus and Summit Avenues in Fontana.

TriPointe Ownership of Lots/Pads:
27 Lots/Pads x $230,000 $ 6,210,000
Less: Remaining Costs ($36,859.07 x 27) ( 995,195) Current Value of 27 Lots/Pads $ 5,214,805
Resmark Ownership:
78 Lots/Pads x $230,000 $17,940,000
Less: Remaining Costs ($36,859.07 x 78) (2,875,007) Current Value of 78 Lots/Pads $15,064,993

Retail House Valuation – Aurora Park
Within Aurora Park, there are 72 individually owned homes and 16 homes over 95 percent complete owned by TriPointe. The builder -owned homes over 95 percent complete include nine production homes and seven model homes.

Due to the single ownership of multiple houses ( 16 homes) by the builder within the subject property, a Discounted Cash Flow (“DCF”) analysis is needed in order to arrive at a bulk value for the homes within each neighborhood. First, a retail value for each plan within Aurora Park will be concluded followed by a DCF for the builder owned homes which will take into account the absorption time to sell off the homes, the costs associated with selling off the homes and any remaining costs owed by the builder, if any. The resulting revenue will be discounted using an appropriate rate to determine the builder - owned bulk value for the builder -owned homes. The DCF builder -owned final value will be followed by a reporting of the concluded values for the individually owned homes within each neighborhood using the concluded base retail value for each plan with a separate check of the analysis utilizing a mass appraisal technique based on actual sales prices of the homes.
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Below is a summary of the floor plans within Aurora Park , with both the Sienna and Goldenrod product lines. A listing of the improved residential comparable properties is located in the Addenda of this report. All new home comparables are located within the city of Fontana, which currently houses a multitude of actively selling new home communities.

Our search of the subject property and the local Multiple Listing Service (MLS) has resulted in no resales or and one current resale listing within Sienna and Goldenrod at Aurora Park. It should be noted that some architectural changes caused floorplan square footage to alter slightly in homes built after Phase 6, due to value engineering, per TriPointe. However, all of the homes that are 95 percent complete fall into the marketed square footages seen on the builder’s website and brochure (built before the value engineering architectural changes). In our analysis, we will use the brochure square footage which appears to be the most widely used and applies to the existing homes over 95 percent complete. The floorplans are detailed below.

The most appropriate new home comparable data for Sienna at Aurora Park Plan 1 are shown as follows.

Aurora Park by TriPointe Homes

Plan

Bed/Bath
Floors/
Parking Sq. Ft. Ind.

Owned
Bldr.

Owned
Sienna at Aurora Park (Alley Load)
1 3 / 2.5 2 / 2 1,879 12 4*
2 3 + Den / 2.5 2 / 3 1,997 12 4*
3 4 + Loft / 3 2 / 3 2,264 11 4*
Sienna Subtotals: 35 12
Goldenrod at Aurora Park (Cluster)
1 3 + Den / 2.5 2 / 2 2,006 13 1*
2 4 + Loft / 3 2 / 2 2,292-2,301 14 1*
3 5 + Loft / 4 2 / 3 2,743 10 2*
Goldenrod Subtotals: 37 4
Aurora Park Total: 72 16
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Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 1 3 / 2.5 2 / 2 1,879 --
1 2 3 / 2.5 2 / 3 1,997 $296.44
3 1 3 / 2.5 2 / 2 1,860 $312.36
4 3 3 / 2.5 2 / 2 1,710 $312.86
4 4 4 / 3 2 / 2 1,950 $303.07
5 1 3 / 3 2 / 2 1,724 $321.64
5 2 3 / 2.5 2 / 2 1,961 $285.51
6 2 3 / 2.5 2 / 2 1,832 $293.28
7 1 3 / 2.5 2 / 2 1,822 $313.69
7 2 3 / 2.5 2 / 2 1,932 $297.58
9 2 3 / 2.5 2 / 2 1,761 $322.48
9 3 4 / 2.5 2 / 2 1,969 $297.40

The comparable communities are all located in Fontana. All are of similar quality, design, and appeal. Adjustments were considered (when applicable) for location, school districts, lot size, master plan amenities, stories, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space and other amenities. The new home comparables have a base price range from $285.51 to $322.48 per square foot, with generally the larger homes at the lower end of the range and the smaller homes at the higher end of the range. This is typical due to the economies of scale obtained during construction of the homes. Aurora Park’s Sienna Plan 1 has a current base asking price of $301.76 per square foot. There have been 12 closings of Sienna Plan 1 with sales prices ranging from $281.77 to $381.18 per square foot. There are five current escrows of Sienna Plan 1 with a sales price range of $279.70 to $319.88 per square foot. It should be noted that the reported sales prices include upgrades, premiums, and options along with any concessions given by the builder, while the concluded value relates to a base price for the plan including closing cost concessions. Closing cost concessions do not show up in the reported sales price of the home, however, are a cost of selling the home. It has been concluded that Sienna Plan 1 has a base current market value of $278.00 per square foot. This calculates as follows:

1,879 sf x $278.00 = $522,362

The most appropriate new home comparable data for Sienna at Aurora Park Plan 2 are shown as follows.

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Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 2 3 / 2.5 2 / 3 1,997 --
1 1 3 / 2.5 2 / 2 1,879 $301.76
2 1 3 / 2.5 2 / 2 2,006 $327.52
3 2 3 / 2.5 2 / 3 1,930 $309.32
3 3 4 / 3 2 / 3 2,065 $299.75
4 4 4 / 3 2 / 2 1,950 $303.07
5 3 3 / 2.5 2 / 2 1,987 $291.31
5 4 3 / 2.5 2 / 2 2,046 $287.71
6 3 3 / 2.5 2 / 2 2,007 $284.72
7 2 3 / 2.5 2 / 2 1,932 $297.58
9 3 4 / 2.5 2 / 2 1,969 $297.40
9 4 4 / 3 2 / 2 1,970 $300.50
11 1 3 / 2.5 2 / 2 2,099 $307.27

Aurora Park’s Sienna Plan 2 has a current base asking price of $296.44 per square foot.

There have been 12 closings of Sienna Plan 2 with sales prices ranging from $280.69 to $356.23 per square foot. There are four current escrows of Sienna Plan 2 with a sales price range of $282.48 to $309.68 per square foot. It should be noted that the reported sales prices include upgrades, premiums, and options along with any concessions given by the builder, while the concluded value relates to a base price for the plan including closing cost concessions. Closing cost concessions do not show up in the reported sales price of the home at this time, however, are a cost of selling the home at this time. There is currently one Sienna Plan 2 on the resale market with an asking price of $375.56 per square foot.

The home has been on the multiple listing service for 78 days with no offers to date. It has been concluded that Sienna Plan 2 has a base current market value of $280.00 per square foot. This calculates as follows:

1,997 sf x $280.00 = $559,160

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The most appropriate new home comparable data for Sienna at Aurora Park Plan 3 are shown as follows.

Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 3 4 / 3 2 / 3 2,264 --
2 2 4 / 3 2 / 2 2,292 $294.50
3 3 4 / 3 2 / 3 2,065 $299.75
7 3 3 / 2.5 2 / 2 2,207 $274.13
8 1 3 / 2.5 2 / 2 2,213 $282.28
8 2 3 / 2.5 2 / 2 2,358 $270.80
10 1 4 / 3 2 / 2 2,449 $290.47
11 1 3 / 2.5 2 / 2 2,099 $307.27
11 2 4 / 3 2 / 2 2,136 $310.77
11 3 4 / 3 2 / 2 2,311 $298.99

The comparable communities are all located in Fontana. All are of similar quality, design, and appeal. Adjustments were considered (when applicable) for location, school districts, lot size, master plan amenities, stories, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space and other amenities. The new home comparables have a base price range from $270.80 to $310.77 per square foot, with generally the larger homes at the lower end of the range and the smaller homes at the higher end of the range. This is typical due to the economies of scale obtained during construction of the homes. Aurora Park’s Sienna Plan 3 has a current base asking price of $274.73 per square foot. There have been 11 closings of Sienna Plan 3 with sales prices ranging from $277.73 to $337.44 per square foot. There are five current escrows of Sienna Plan 3 with a sales price range of $255.62 to $291.03 per square foot. It should be noted that the reported sales prices include upgrades, premiums, and options along with any concessions given by the builder, while the concluded value relates to a base price for the plan including closing cost concessions. Closing cost concessions do not show up in the reported sales price at this time however, are a cost of selling the home at this time . It has been concluded that Sienna Plan 3 has a base current market value of $253.00 per square foot. This calculates as follows:

2,264 sf x $253.00 = $572,792

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The most appropriate new home comparable data for Goldenrod at Aurora Park Plan 1 are shown as follows.

Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 1 3 / 2.5 2 / 2 2,006 --
1 2 3 / 2.5 2 / 3 1,997 $296.44
3 3 4 / 3 2 / 3 2,065 $299.75
5 3 3 / 2.5 2 / 2 1,987 $291.31
5 4 3 / 2.5 2 / 2 2,046 $287.71
6 3 3 / 2.5 2 / 2 2,007 $284.72
9 3 4 / 2.5 2 / 2 1,969 $297.40
9 4 4 / 3 2 / 2 1,970 $300.50
11 1 3 / 2.5 2 / 2 2,099 $307.27

The comparable communities are all located in Fontana. All are of similar quality, design, and appeal. Adjustments were considered (when applicable) for location, school districts, lot size, master plan amenities, stories, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space and other amenities. The new home comparables have a base price range from $284.72 to $307.27 per square foot, with generally the larger homes at the lower end of the range and the smaller homes at the higher end of the range. This is typical due to the economies of scale obtained during construction of the homes. Aurora Park’s Goldenrod Plan 1 has a current base asking price of $327.52 per square foot. There have been 13 closings of Goldenrod Plan 1 with sales prices ranging from $313.51 to $382.59 per square foot. There is one current escrow of Goldenrod Plan 1 with a sales price of $342.55 per square foot. It should be noted that the reported sales prices include upgrades, premiums, and options along with any concessions given by the builder, while the concluded value relates to a base price for the plan including closing cost concessions. Closing cost concessions do not show up in the reported sales price for the home, however, are a cost of selling the home at this time . It has been concluded that Goldenrod Plan 1 has a base current market value of $3 05.00 per square foot. This calculates as follows:
2,006 sf x $305.00 = $611,830

The most appropriate new home comparable data for Goldenrod at Aurora Park Plan 2 are shown as follows.

Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 2 4 / 3 2 / 2 2,292 --
1 3 4 / 3 2 / 3 2,264 $274.73
7 3 3 / 2.5 2 / 2 2,207 $274.13
8 1 3 / 2.5 2 / 2 2,213 $282.28
8 2 3 / 2.5 2 / 2 2,358 $270.80
8 3 4 / 2.5 2 / 2 2,472 $263.09
10 1 4 / 3 2 / 2 2,449 $290.47
11 2 4 / 3 2 / 2 2,136 $310.77
11 3 4 / 3 2 / 2 2,311 $298.99

The comparable communities are all located in Fontana. All are of similar quality, design, and appeal. Adjustments were considered (when applicable) for location, school districts, lot size, master plan amenities, stories, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space and other amenities. The new home comparables have a base price range from $263.09 to $310.77 per square foot, with generally the larger homes at the lower end of the range and the smaller homes at the higher end of the range. This is typical due to the economies of scale obtained during construction of the homes. Aurora Park’s Goldenrod Plan 2 has a current base asking price of $294.50 per square foot. It's important to note that Goldenrod Plan 2 is being marketed with a square footage range of 2,292 to 2,301 square feet, with a slight variation depending upon exterior elevation and front door orientation. We have used the smaller size to represent the base Plan 2 footage; thus the 2,292 square feet is valued here. There have been 14 closings of Goldenrod Plan 2 with sales prices ranging from $300.01 to $358.60 per square foot. There are two current escrows of Goldenrod Plan 2 with a sales price range of $292.39 to $298.87 per square foot. It should be noted that the reported sales prices include upgrades, premiums, and options along with any concessions given by the builder, while the concluded value relates to a base price for the plan including closing cost concessions. Closing cost concessions do not show up in the reported sales price of the homes, however, are a cost to the seller. It has been concluded that Goldenrod Plan 2 has a base current market value of $285.00 per square foot. This calculates as follows:

2,292 sf x $285.00 = $653,220

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The most appropriate new home comparable data for Goldenrod at Aurora Park Plan 3 are shown as follows.

Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 3 5 / 4 2 / 3 2,743 --
1 3 4 / 3 2 / 3 2,264 $274.73
2 2 4 / 3 2 / 2 2,292 $294.50
8 3 4 / 2.5 2 / 2 2,472 $263.09
10 1 4 / 3 2 / 2 2,449 $290.47
10 2 4 / 3 2 / 2 2,666 $273.70
10 3 4 / 3 2 / 2 2,877 $261.37
11 4 4 / 3 2 / 2 2,552 $278.27
12 1 4 / 3.5 2 / 2 2,747 $298.17
12 2 4 / 4 2 / 2 2,961 $289.46

Aurora Park’s Goldenrod Plan 3 has a current base asking price of $270.51 per square foot.

There have been 10 closings of Goldenrod Plan 3 with sales prices ranging from $272.61 to $310.63 per square foot. There are two current escrows of Goldenrod Plan 3 with a sales price range of $281.48 to $282.67 per square foot. It should be noted that the reported sales prices include upgrades, premiums, and options along with any concessions given by the builder, while the concluded value relates to a base price for the plan including closing cost concessions. Closing cost concessions do not show up in the reported sales price of the homes, however, are a cost to the seller. It has been concluded that Goldenrod Plan 3 has a base current market value of $270.00 per square foot. This calculates as follows:

2,743 sf x $270.00 = $740,610

Builder Owned Retail Value – Aurora Park

Within the subject property, there are 1 6 TriPointe-owned houses over 95 percent complete, six of which are decorated models. Per interviews with builders, upgrades and landscape/hardscape of up to $100,000 are installed in the model homes, however, the _________________________________________________________________________________________________________ Appraisal Report
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builders generally consider this a marketing cost and do not anticipate recovering this investment on a dollar -for-dollar basis. Based on historical information, home sizes and fixtures, actual model home sales within the subject area and the current real estate market, a consideration of a $50,000 premium has been included with each of the model homes. As concluded above, the retail base value conclusions for the builder -owned homes within Aurora Park are calculated as follows:

Sienna Plan 1 (4 x $522,362) $ 2,089,448
Sienna Plan 2 (4 x $559,160) 2,236,640
Sienna Plan 3 (4 x $572,792) 2,291,168
Goldenrod Plan 1 (1 x $611,830) 611,830
Goldenrod Plan 2 (1 x $653,220) 653,220
Goldenrod Plan 3 (2 x $740,610) 1,481,220
Model Upgrades (6 x $50,000) 300,000
Total Retail Value $ 9,663,526

Absorption Period
In order to arrive at an absorption period for the 16 builder-owned homes, the absorption rate for the subject neighborhood along with the surrounding developments has been reviewed. Aurora Park grand opened in December 2021 and consists of 193 homes. There have been 91 sales since December 2021 suggesting an average absorption of 4.8 homes per month across the two product lines, which is considered to be a bit slow for the subject area with the subject’s price points. When looking at each product line individually, Sienna have averaged a sales pace of 2.6 sales per month while Goldenrod has averaged a sales pace of 2.2 sales per month. It should be noted that there was some value engineering which created some slight changes in square footage for the future homes which has taken time to go through the approval process and delayed construction. In addition, the rainy season of 2022/23 delayed construction. Taking into consideration the product, concluded sales prices and current escrows, along with the current unstable interest rates, it has been concluded that the 16 builder-owned homes will be absorbed within a six-month period at the concluded values.

Remaining Costs
As discussed under the remaining costs section earlier within this report, there are $36,859.07 per lot in remaining land development costs associated with the builder - _________________________________________________________________________________________________________ Appraisal Report
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owned homes, which equates to a total of $ 589,745 for the subject 16 homes. It is an assumption of this analysis that the remaining costs will be spread evenly over the six - month absorption time period.

Expenses
In determining an expense rate, several builders in the subject area have been interviewed as to their expenses on selling existing inventory. Expenses include marketing and general administrative costs. These costs typically range from six to ten percent depending on varying factors such as absorption period, intensity of marketing, etc. Due to the volatile market, we are considering e ight percent for marketing expenses and two percent for general and administrative costs for a total of ten percent in expenses for this analysis.

Profit
Several interviews with merchant builders in the area were conducted in order to determine an appropriate profit percentage for the subject properties. In the early 2000s, developers typically attempted to achieve a 10 to 12 percent profit based on gross s ales proceeds. During the early great recession, this range was lowered considerably to six to 10 percent with some builders drastically lowering their profit potential in order to maintain their work force. A ten percent profit is considered appropriate i n the analysis for this project.

Discount Rate
In selecting a discount rate, the following was completed:

1. Interviews with merchant builders in the San Bernardino area

2. Review of current market conditions including current market rates as well as yields reflected in other markets (i.e., municipal bonds, corporate bonds, etc.)

3. The quality, construction, historical sales and product on the subject property

The homes within Aurora Park began selling in December 2021 with the product being well received in the marketplace with a 4.8 sales per month average across the two product lines.

While this sales pace is a bit below the area average, it’s important to note that construction and weather delays have caused large gaps between phase releases, so there have been times when there were no homes available to sell. Based on the sales rate within both _________________________________________________________________________________________________________ Appraisal Report
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communities in the subject project, the competition, the product and location, and current market conditions, a 10 percent discount rate is considered appropriate for this analysis.

Discounted Cash Flow Summary
The discounted revenue (see DCF Analyses in addenda) for the builder -owned homes within Aurora Park is $6,937,338.

Aurora Park – TriPointe Homes Ownership

27 Lots/Pads owned by TriPointe $ 5,214,805
16 Houses (including 7 models) TriPointe-owned 6,937,338 Total TriPointe Ownership $12,152,143

Aurora Park – Resmark Ownership

78 Lots/Pads owned by Resmark $ 15,064,993

Individual Owners Value Conclusion – Aurora Park
There are 72 individually owned homes within the subject property. Based on the concluded value for each plan, the individually owned homes within the subject property have a minimum market value of:

Sienna Plan 1 (12 x $522,362) $ 6,268,344
Sienna Plan 2 (12 x $559,160) 6,709,920
Sienna Plan 3 (11 x $572,792) 6,300,712
Goldenrod Plan 1 (13 x $611,830) 7,953,790
Goldenrod Plan 2 (14 x $653,220) 9,145,080
Goldenrod Plan 3 (10 x $740,610) 7,406,100
Total Individual Owned $43,783,946

In an additional review, we have reviewed the original builder sales prices for the homes within the subject property. Closings for the 72 homes occurred between June 16, 2022, and July 14, 2023. The reported closing prices by the builder for the 72 individually owned homes total $5 1,177,361, which is 16.9 percent higher than the concluded value. The builder’s reported prices include premiums, upgrades and purchased options as well as took into consideration the concessions given by the builder , which would typically be higher than the base pricing. However, in the past year , public builders have increased _________________________________________________________________________________________________________ Appraisal Report
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concessions with rate buy -downs occurring which have totaled up to $100,000 in concessions with an average of over $13,000 per sale within Aurora Park. These closing cost concessions are not included in the sales prices of the homes. The current market and most recent sales not only reflect higher incentives, but also include lower pricing.

Opening base prices in December 2021 ranged from $ 648,000 to $692,000 for Sienna, while Goldenrod’s opening base prices were from $674,000 to $752,000. Current base prices are from $ 567,000 to $622,000 for Sienna and from $ 657,000 to $742,000 for Goldenrod. This shows that prices have decreased and demonstrates the adjusting of prices to meet the market. The decreasing market and the increasing incentives have been taken into account in our analysis . The above valuation is for the minimum market value, as it takes into consideration the base plan price only and does not take into account any options, premiums or upgrades which were purchased by the buyers ; however, it does take concessions into consideration. It is our conclusion that the original builder sales prices further substantiate the concluded minimum market value for the individually owned homes

APPRAISAL REPORT SUMMARY

The appraisal assignment was to value the subject property within Fontana CFD No. 100 which consists of 193 proposed residential units. The 193 units are known as Aurora Park, being marketed, and sold by TriPointe Homes, and are located in the northwestern portion of the City of Fontana . The subject includes two product lines: Sienna, 82 all ey load detached condominiums; and Goldenrod, 111 cluster detached condominiums. As of July 17, 2023, individuals have purchased and closed on 72 of the total 193 proposed houses, with an additional 19 homes in escrow which are due to close upon completion. The community has had a slower than average sales pace, in part due to the construction and weather delays causing large breaks between phase releases. All structures appear to be in excellent condition with no visible depreciation. We have reviewed builder sales and reviewed the local MLS for current listings or resales and found one current listing which is included in the report.

The subject properties were valued utilizing the Sales Comparison Approach to value, a Discounted Cash Flow Analysis, and a Mass Appraisal Technique for the individually owned homes. A minimum value was determined by concluding at a base value for the individually owned homes. The valuation took into account the improvements/benefits to be funded by the special tax Fontana CFD No. 100 bond proceeds along with the Fontana CFD No. 100 special tax lien. The concluded aggregate value for the subject properties, subject to their respective special tax lien, is:

Aurora Park:

Resmark Ownership (78 pads) $ 15,064,993
TriPointe Homes Ownership (27 lots/pads & 16 houses) $ 12,152,143 Individual Owners (72 houses) $ 43,783,946
Total Aggregate Value CFD No. 100 $ 71,001,082

The above values are stated as of said date of value and subject to the attached Assumptions and Limiting Conditions and Appraiser’s Certification. _________________________________________________________________________________________________________ Appraisal Report
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APPRAISER’S CERTIFICATION

The appraiser certifies that to the best of his knowledge and belief:

1. The statements of fact contained in this report are true and correct.

2. The reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, unbiased, professional analyses, opinions and conclusions.

3. The appraiser has no present or prospective interest in the property that is the subject of this report, and no personal interest or bias with respect to the parties involved.

4. The appraiser’s compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result or the occurrence of a subsequent event.

5. This appraisal was not based on a requested minimum valuation, a specific valuation or the approval of a loan.

6. The analyses, opinions and conclusions were developed, and this report was prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.

7. Kitty Siino has made a personal inspection of the property that is the subject of this report.

8. Kitty Siino has performed any appraisal services on the subject property in the past three years. In January 2023 an appraisal was completed with a date of value of January 3, 2023. Due to a time delay, an update was needed which is this report.

9. No other appraisers have provided significant professional assistance to the persons signing this report.

10. The reported analyses, opinions and conclusions were developed, and this report was prepared, in conformity with the requirements of the Appraisal Institute’s Code of Professional Ethics and Standards of Professional Appraisal Practice, which include the Uniform Standards of Professional Appraisal Practice.

11. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.

12. As of the date of this report, Kitty Siino has completed the requirements of the continuing education program of the Appraisal Institute.

Kitty S. Siino, MAI
State Certified General
Real Estate Appraiser (AG004793)

ADDENDA

FONTANA CFD NO. 100

BOUNDARY MAP

TRACT MAP No. 20229
& CONDOMIUM PLANS

DISCOUNTED CASH FLOW ANALYSIS

Aurora Park Builder-Owned Houses Discounted Cash Flow Analysis

MONTH MONTH 1 MONTH 2 MONTH 3 MONTH 4 MONTH 5 MONTH 6 TOTAL

INCOME:

Retail Sales $1,610,588 $1,610,588 $1,610,588 $1,610,588 $1,610,588 $1,610,588 $9,663,526

TOTAL INCOME $1,610,588 $1,610,588 $1,610,588 $1,610,588 $1,610,588 $1,610,588 $9,663,526

EXPENSES:

Remaining Costs ($98,291) ($98,291) ($98,291) ($98,291) ($98,291) ($98,290) ($589,745) Marketing & Carrying Expenses ($161,059) ($161,059) ($161,059) ($161,059) ($161,059) ($161,059) ($966,353) Profit ($161,059) ($161,059) ($161,059) ($161,059) ($161,059) ($161,059) ($966,353)

TOTAL EXPENSES ($420,409) ($420,409) ($420,409) ($420,409) ($420,409) ($420,408) ($2,522,450)

NET CASH FLOW $1,190,179 $1,190,179 $1,190,179 $1,190,179 $1,190,179 $1,190,180 $7,141,076 Discount Factor 0.9917 0.9835 0.9754 0.9673 0.9594 0.9514

DISCOUNTED CASH FLOW $1,180,343 $1,170,588 $1,160,914 $1,151,319 $1,141,804 $1,132,369

CUMULATIVE DISCOUNTED $1,180,343 $2,350,931 $3,511,845 $4,663,164 $5,804,969 $6,937,338

CASH FLOW

FINISHED LOT LAND SALES MAP
& SUMMARY CHART

FINISHED LOT LAND SALES MAP

FINISHED LOT LAND SALES SUMMARY CHART

Data
No. Location / APN / Buyer / Seller Sales
Date
#
Lots Lot Size Sales Price /
Price per Lot
Est.

Finished
Lot Price
Comments
1 Glen at Fontana, N/S Chase Road,
W/O Citrus Avenue, Fontana / 0228-
151-17, 18 & 19 / RC Homes / Masjedi
Family
Oct- 22 46
(92)

6.7 du/ac
(13.5 du/ac)

$3,525,000 /
$76,630
($38,315)
$315,000
($165,000)
Product is for a house on small lot with a
separate ADU which creates the 92 units
rather than 46. The information is reported for
both first, just the main houses and secondly
for both the main house and the ADU.
2 Zinnia at the Preserve, NE/W of Pine
Avenue & Meadowhouse Avenue,
Chino / 1057-041-13, 1057-061-12 /
Beazer Homes / Lewis Group of
Companies
Jun-22 149 14 du/ac

$19,952,500 /
$133,909 $205,000
Closed in unimproved condition with an
approved tentative tract map. This project
consists of 2/3-story attached townhomes.
3 Bergamont, NW of Texas Street &
Domestic Avenue, Redlands / 0167-
031-02 / Meritage Homes / Various
Investors (Assemblage)
Apr-22 –
Jun-22 317
7,200
3,500
10 du/ac
$16,657,000 / $193,000
(blended)
Closed in unimproved condition with an
approved Specific Plan, Environmental Impact
Report, and Tentative Tract Map. It consists of
three planning areas:
- PA 1: 53 lots, SFD, 7,200 sf
- PA 2: 144 lots, SFD, 3,500 sf
- PA 3: 120 lots, Motorcourt Cluster, 10 du/ac
$52,546
4 2121 South Garey, SWC South Garey
Ave and Rio Rancho Rd, Pomona /
8344-033-902+ / Century Communities
/ Pomona Unified School District
Apr-22 156 17 du/ac

$13,400,000 /
$85,897
***
$185,897
Estimate
Another builder was involved in the transaction
however public record shows it going straight
from school district to Century
-41 two-story detached homes
-115 three-story townhomes
F/L amount estimate based on historical costs
5 Crestwood at Arboleda, SE East
Grove Street and Hollander Street,
Pomona / 8367-011-007 / Crestwood
Communities / Arboleda 38 LLC
Apr-22 38 10 du/ac
$4,695,000 /
$123,553 ***
$238,553
Estimate
Two story all detached homes, continuation of
Crestwood's previous sold-out Pomona
community (Crestwood at Valencia). F/L
amount estimated based on historical costs
6 The Depot, SWC Bonnie View Dr and
Willow Avenue, Rialto / 0131-021-36,
37 and 38 / Century Communities /
Koba Properties
Jan-22 56 12 du/ac

$3,290,000 /
$58,750 $188,000 Closed in an unimproved condition with an approved TTM
7 Appaloosa Springs, SW of Limonite
Avenue & Clay Street, Jurupa Valley /
163-400-001, -052 / DR Horton /
Inland Harbor
Dec-21 254 3,600 $22,200,000 / $205,000
Closed in unimproved condition with an
approved tentative tract map. Single product
line SFD with lots ranging 3,600-5,000 sf $87,402

8 Gardens at Arboretum, NWC of Sierra
Avenue & Casa Grande Avenue,
Fontana / 0239-131-45 / Lennar /
Lewis Group of Companies
Dec-21 526
4 du/ac
(blended)
Triplex up to
6,000 sf

$91,935,447 /
$174,782

$274,000
(blended)
Gardens at Arboretum was closed in
unimproved condition with an approved
tentative tract map. It consists of six (6)
product lines:
• Triplex, 69 Units
• SFD (2,200 sf), 99 Lots
• SFD (2,600 sf), 109 Lots
• SFD (4,000 sf), 97 Lots
• SFD (4,990 sf), 88 Lots
• SFD (6,000 sf), 64 Lots
9 Highland, NW of Beech Avenue &
South Highland Avenue, Fontana /
0228-021-09 / Richmond American
Homes / Stratham Group
Dec-21 107
10 du/ac
(blended)
Small
Detached
$18,691,821 / $285,000
(blended)
Highland was closed in unimproved condition
with final engineering in process. It consists of
two (2) product lines:
• Alley-Load, 46 Lots
• Motorcourt Cluster, 61 Lots
$174,690
10 Monarch Hills (Narra Hills), NW of
Duncan Canyon Road & Interstate 15,
Fontana / 0226-075-18 / Landsea
Homes / Richland Communities
Sept-21 489 Varies
$42,736,000 /
$285,000*
*Represents blended price for townhomes,
cluster, 5,000 sf lots and 10,000 sf lots. Sold in
unimproved condition. Portion is hillside
allowing for views.
-PA1, 154 lots, 10,000 sf ($360,000 FLV)
- PA 2, 79 lots, 5,000 sf ($295,000 FLV)
-PA 3, 127 lots, cluster product ($245,000
FLV)
-PA 4, 129 units, townhomes ($175,000 FLV)
$87,395*

IMPROVED RESIDENTIAL

SALES MAP & SUMMARY CHART

IMPROVED RESIDENTIAL SALES SUMMARY MAP

IMPROVED RESIDENTIAL SALES SUMMARY CHART

Data
No.

Project Name
Location/Developer Plan Room
Count
Floors/
Parking
Size
(SF)
Lot Size /
Absorption
Base
Sales
Price
Price/SF
1 Sienna at Aurora Park, Victoria Street and Kestral
Drive, Fontana / TRI Pointe Homes
1 3 / 2.5 2 / 2 1,879 2,000 sf lots $567,000 $301.76
2 3 / 2.5 2 / 3 1,997 (Alley-load) $592,000 $296.44
3 4 / 3 2 / 3 2,264 2.6 sales/mo $622,000 $274.73
2 Goldenrod at Aurora Park, Victoria Street and Kestral Drive, Fontana / TRI Pointe Homes
1 3 / 2.5 2 / 2 2,006 2,000 sf lots $657,000 $327.52
2 4 / 3 2 / 2 2,292 (Det. Cluster) $675,000 $294.50
3 5 / 4 2 / 3 2,743 2.2 sales/mo $742,000 $270.51
3 Cascade at Highland Park, South Highland Avenue
and San Servaine Road, Fontana / Richmond
American
1 3 / 2.5 2 / 2 1,860 5,000 sf lot $580,990 $312.36
2 3 / 2.5 2 / 3 1,930 2.1 sales/mo $596,990 $309.32
3 4 / 3 2 / 3 2,065 $618,990 $299.75
4 Talise at Highland Park, South Highland Avenue and
San Servaine Road, Fontana / Richmond American
1 3 / 2.5 2 / 2 1,410 $514,990 $365.24
2 3 / 2.5 2 / 2 1,650 5,000 sf lots $547,990 $332.12
3 3 / 2.5 2 / 2 1,710 3.4 sales/mo $534,990 $312.86
4 4 / 3 2 / 2 1,950 $590,990 $303.07
5 Chateau at The Retreat, South Highland Avenue and
Beech Avenue, Fontana / Lennar
1 3 / 3 2 / 2 1,724 $554,505 $321.64
2 3 / 2.5 2 / 2 1,961 3,000 sf lots $559,885 $285.51
3 3 / 2.5 2 / 2 1,987 4.5 sales/mo $578,840 $291.31
4 3 / 2.5 2 / 2 2,046 $588,650 $287.71
6 Rivello at Monterado, Citrus Avenue and Duncan
Canyon Road, Fontana / Lennar
1 3 / 2.5 2 / 2 1,795 3,000 sf lots $564,350 $314.40
2 3 / 2.5 2 / 2 1,832 (Alley-load) $537,290 $293.28
3 3 / 2.5 2 / 2 2,007 4.8 sales/mo $571,440 $284.72
7 Salerno at Monterado, Citrus Avenue and Duncan
Canyon Road, Fontana / Lennar
1 3 / 2.5 2 / 2 1,822 3,000 sf lots $571,545 $313.69
2 3 / 2.5 2 / 2 1,932 (Det. Cluster) $574,915 $297.58 3 3 / 2.5 2 / 2 2,207 3.6 sales/mo $605,015 $274.13

8 Acacia at Arboretum, Sierra Avenue and Casa
Grande Avenue, Fontana / Lennar
1 3 / 2.5 2 / 2 2,213 2,500 sf lots $624,680 $282.28
2 3 / 2.5 2 / 2 2,358 3.8 sales/mo $638,555 $270.80
3 4 / 2.5 2 / 2 2,472 $650,365 $263.09
9 Blue Sage at Arboretum, Sierra Avenue and Casa
Grande Avenue, Fontana / Lennar
1 3 / 2.5 2 / 2 1,651 2,000 sf lots $559,290 $338.76
2 3 / 2.5 2 / 2 1,761 (Zero Lot Line) $567,890 $322.48
3 4 / 2.5 2 / 2 1,969 4.0 sales/mo $585,590 $297.40
4 4 / 3 2 / 2 1,970 $591,990 $300.50
10 Silverberry at Arboretum, Sierra Avenue and Casa
Grande Avenue, Fontana / Lennar
1 4 / 3 2 / 2 2,449 4,000 sf lots $711,355 $290.47
2 4 / 3 2 / 2 2,666 4.7 sales/mo $729,680 $273.70
3 4 / 3 2 / 2 2,877 $751,950 $261.37
11 Strata at Narra Hills, Lytle Creek Road and Duncan
Canyon Road, Fontana / Landsea
1 3 / 2.5 2 / 2 2,099 2,700 sf lots $644,967 $307.27
2 4 / 3 2 / 2 2,136 (Det. Cluster) $663,803 $310.77
3 4 / 3 2 / 2 2,311 10.3 sales/mo $690,967 $298.99
4 4 / 3 2 / 2 2,552 $710,154 $278.27
12 Wildstar at Narra Hills, Lytle Creek Road and Duncan Canyon Road, Fontana / Landsea
1 4 / 3.5 2 / 2 2,747 5,000 sf lots $819,073 $298.17
2 4 / 4 2 / 2 2,961 8.5 sales/mo $857,105 $289.46
3 5 / 4.5 2 / 3 3,079 $840,744 $273.06

APPRAISER’S QUALIFICATIONS

QUALIFICATIONS OF KITTY S. SIINO, MAI

Education

Bachelor of Arts in Business Administration, Financial Investments, California State University, Long Beach, California (1980)

Post-Graduate Study, Real Estate Development, University of California, Irvine, California

Appraisal Institute Classes: Uniform Standards of Professional Appraisal Practice, A & B; Appraisal Principles; Appraisal Procedures; Basic Income Capitalization; Advanced Income Capitalization; Narrative Report Writing; Advanced Applications, Case Studies.

Successfully completed all classes in addition to successfully completing the writing of a Demonstration Report and taking the Comprehensive Exam. Became a Member of the Appraisal Institute in December 1996. Have completed over 100 hours of continuing education through the Appraisal Institute every five years.

Employment

1988 - Present:

Self-Employed Real Estate Appraiser. Duties include the appraisal of various types of properties such as commercial, retail, industrial and vacant land. More complex assignments include easements, right-of-ways and special assessment districts. From 1996 to present, specialized in special assessment districts and community facilities districts appraisals for public entities, including Jurupa Community Services District, Corona Norco Unified School District, City of Corona, City of Chula Vista, City of Sa n Marcos and City of Moreno Valley.

1986-1988:

Project Manager of Development for Ferguson Partners, Irvine, California. Duties included land acquisitions; review of fee appraisals and valuations; analysis of proposed development; planning and design; and management of development, construction and lease-up. The types of properties developed were commercial and industrial. Duties ranged from raw, vacant site development through property management of recently developed projects.

1981 - 1986
Manager of Finance, Construction for Community Development Division, The Irvine Company, Irvine, California. Duties included originating and managing a newly formed division of finance to bridge between the accounting functions and project management functions. Worked with analysis and budgets for Community Development Division. Coordinated with cities in form ing new Assessment Districts and Community Facilities Districts to finance major infrastructure improvements.

Types of properties were apartments and single-family residential lots on a for sale basis to apartment and homebuilders.

1980 - 1981
Investment Counselor, Newport Equity Funds, Newport Beach, California. Duties included obtaining private financing for residential properties, working with appraisals of properties and analyzing the investments.

Licenses
Real Estate Sales Person, State of California, 1980
Certified General Appraiser, State of California (#AG004793)

Organizations
MAI #11145 - The Appraisal Institute

Public Financing
CASTOFF Meetings, 2006, 2007, 2008, 2009, 2010, 2011, 2013, 2014, 2015, 2016, 2017, 2018, 2019 and 2022

Speaker, Mello- Roos & Special Assessment Financing, UCLA Extension Publi c Policy Program, February 2009 and March 2011

Fontana City CouncilSeptember 26, 2023

Fontana City Council
September 26, 2023