Appraisal — Menifee City Council, November 6, 2024

Integra Realty Resources
Los Angeles
Appraisal of Real Property
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Residential Subdivision
Sunset Pier Road
Menifee, Riverside County, California 92584
Prepared For:

City of Menifee
Date of the Report:

September 27, 2024
Report Format:

Appraisal Report
IRR - Los Angeles
File Number: 219-2024-0055
Subject Photographs

City of Menifee CFD No. 2023-1 (Rockport Ranch)
Sunset Pier Road
Menifee, California

Aerial Photograph

Integra Realty Resources 12100 Willshire Blvd. T 213.984.4425 Los Angeles Suite 800 F 916.435.4774
Los Angeles, CA, 90025 www.irr.com

September 27, 2024

Travis Hickey
Chief Financial Officer
City of Menifee
29844 Haun Road
Menifee, CA 92586

SUBJECT: Market Value Appraisal
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Sunset Pier Road
Menifee, Riverside County, California 92584
IRR - Los Angeles File No. 219-2024-0055

Dear Mr. Hickey:

Integra Realty Resources – Los Angeles is pleased to submit the accompanying appraisal of the referenced property. The purpose of the appraisal is to develop an opinion of the market value by ownership, subject to a hypothetical condition, pertaining to the fee simple interest in the property, as well as the aggregate, or cumulative, value of the appraised properties. The client for the assignment is City of Menifee and the intended use of the report is for bond underwriting purposes.

The subject is the City of Menifee Community Facilities District (CFD) No. 2023-1 (Rockport Ranch) (“CFD No. 2023-1”), which is generally located at the southwest corner of Old Newport Road and Briggs Road, within the city of Menifee, Riverside County, California. The subject is comprised three communities North, West, and South Shore at Rockport Ranch, which have 109, 96, and 100 lots, respectively. The communities have typical lot sizes ranging from 3,600 to 6,500 square feet. North and South Shore at Rockport Ranch have a traditional lot configuration, while West Shore at Rockport Ranch has an 8-lot cluster configuration. All three communities are being developed by Lennar Homes. As of the date of value, August 30, 2024, the subject consists of partially-improved lots, improved lots with homes under construction, and completed homes. The appraised property comprises 112 completed and sold homes, six completed (unsold) homes, 90 improved lots with homes under construction at various stages and 46 partially improved lots. In total, the appraised properties comprise 254 Assessor's Parcels; the balance of City of Menifee Community Facilities District No. 2023-1 (Rockport Ranch) is 51 completed and sold homes reflected on the County of Riverside Assessor's Tax Roll with a complete assessed value for both land and Travis Hickey
City of Menifee
September 27, 2024

Page 2 ends

improvements. As requested, these 51 Assessor's Parcels are not appraised herein; rather, the aggregate, or cumulative, Assessed Value according to the 2024/25 Tax Roll is presented herein for Bond Financing purposes. A more detailed legal and physical description of the subject property is contained within the attached report.

The appraisal conforms to the Uniform Standards of Professional Appraisal Practice (USPAP), the Code of Professional Ethics and Standards of Professional Practice of the Appraisal Institute, and applicable state appraisal regulations. The Appraisal Report is also prepared in accordance with the Appraisal Standards for Land Secured Financing published by the California Debt and Investment Advisory Commission (CDIAC).

Standards Rule 2-2 (Content of a Real Property Appraisal Report) contained in the Uniform Standards of Professional Appraisal Practice (USPAP) requires each written real property appraisal report to be prepared as either an Appraisal Report or a Restricted Appraisal Report. This report is prepared as an Appraisal Report as defined by USPAP under Standards Rule 2-2(a), and incorporates practical explanation of the data, reasoning, and analysis that were used to develop the opinion of value.

Based on the valuation analysis in the accompanying Appraisal Report, and subject to the hypothetical condition, definitions, assumptions, and limiting conditions expressed in the report, the concluded opinions of value, as of the date of value, August 30, 2024, is as follows:

Market Value by Ownership
Lots/Parcels
/Homes
Lot/Home
Value
Remaining Site
Development Costs
Permits and
Fees
Value per
Component Market Value (Rd.)
Lennar Homes of California, LLC / AG EHC II (LEN) CA 1, L.P.

Part ially-Improve d L ot s
North Shore at Rockport Ranch 20 $224,000 ($47,985) - $176,015 $3,520,000 South Shore at Rockport Ranch 21 $232,500 ($47,985) - $184,515 $3,875,000 West Shore at Rockport Ranch 5 $194,000 ($47,985) - $146,015 $730,000 Homes Under Construction
North Shore at Rockport Ranch 35 $224,000 ($47,985) $22,600 $198,615 $6,952,000 South Shore at Rockport Ranch 22 $232,500 ($47,985) $22,600 $207,115 $4,557,000 West Shore at Rockport Ranch 33 $194,000 ($47,985) $22,600 $168,615 $5,564,000 Completed Homes
North Shore at Rockport Ranch 2 $530,000 - - $530,000 $1,060,000 (Not-Less-Than) South Shore at Rockport Ranch 4 $550,000 - - $550,000 $2,200,000 (Not-Less-Than) Total - Lennar Homes of California, LLC / AG EHC II (LEN) CA 1, L.P. 142 $28,458,000 Indi vidual Homeowners
Completed Homes
North Shore at Rockport Ranch 33 $530,000 - - $530,000 $17,490,000 (Not-Less-Than) South Shore at Rockport Ranch 39 $550,000 - - $550,000 $21,450,000 (Not-Less-Than) West Shore at Rockport Ranch 40 $515,000 - - $515,000 $20,600,000 (Not-Less-Than) Total - Individual Homeowners 112 $59,540,000
Aggregate, or Cumulative, Appraised Values 254 $87,998,000 Aggregate, or Cumulative, Assessed Values 51 $28,930,504 Total Aggregate, or Cumulative, Value of CFD No. 2023-1 (Rockport Ranch)
305 $116,928,504

Travis Hickey
City of Menifee
September 27, 2024

Page 3 ends

Extraordinary Assumptions and Hypothetical Conditions
(None)

1. The value derived herein is based on the hypothetical condition that certain impact fees to be financed by the CFD No. 2023-1 Revenue Bonds, Series 2024, have been paid.

The use of any extraordi nary assumpti on or hypotheti cal condi ti on may have affected the assi gnment resul ts.

The value conclusions are base d on the following hypothe tical conditions. A hypot he tical condition is a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effecti ve date of the assi gnment resul ts, but i s used for the purpose of anal ysi s.

The val ue concl usi ons are subject to the fol l owi ng extraordi nary assumpti ons. An extraordi nary assumpti on i s an assignm e nt-spe cific assum pt ion as of the e ffe ctive date re garding unce rtain inform at ion use d in an analysis which, if found to be false , could alte r t he appraise r’s opinions or conclusions.

The opinions of value represent a "not-less-than" value due to the fact we were requested to provide a market value for the smallest floor plan in each community improved with a completed home without a complete assessed improvement value reflected on the County of Riverside Assessor's Tax Roll.

Please note the aggregate of the appraised values is not the market value of the appraised properties in bulk. As defined by The Dictionary of Real Estate Appraisal, an aggregate value is the "total of multiple market value conclusions." For purposes of this Appraisal Report, market value is estimated by ownership.

As a condition of this assignment, the Assessed Values for certain Assessor's Parcels with completed and sold homes with a complete Assessed Value for both Land and Improvements (improvement value greater than $300,000) is presented herein for illustration purposes, which will be relied upon for underwriting purposes.

Travis Hickey
City of Menifee
September 27, 2024

Page 4 ends

If you have any questions or comments, please contact the undersigned. Thank you for the opportunity to be of service.

Respectfully submitted,
Integra Realty Resources - Los Angeles

Blake Fassler
California Certified General Real Estate
Appraiser #3007274
Telephone: 916-435-3883
Email: [email protected]
Kevin Ziegenmeyer, MAI
California Certified General Real Estate
Appraiser #AG013567
Telephone: 916.435.3883, ext. 224
Email: [email protected]

Eric Segal, MAI
California Certified General Real Estate
Appraiser #AG026558
Telephone: 916.435.3883, ext. 228
Email: [email protected]

Table of Contents
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Executive Summary 1
Identification of the Appraisal Problem 2
Subject Description 2
Sale History 2
Pending Transactions 3
Appraisal Purpose 3
Value Type Definitions 3
Property Rights Definitions 4
Client and Intended User(s) 4
Intended Use 4
Applicable Requirements 4
Report Format 4
Prior Services 5
Appraiser Competency 5
Scope of Work 6
Economic Analysis 8
Area Analysis – Riverside County 8
Introduction 8
Population 8
Employment & Economy 9
Household Income 11
Transportation 11
Recreation & Culture 12
Conclusion 12
Surrounding Area Analysis 15
Residential Market Analysis 19
Property Analysis 27
Land Description and Analysis 27
Proposed Improvements Description 37
Real Estate Taxes 42
Highest and Best Use 45
Valuation 47
Valuation Methodology 47
Market Valuation – Floor Plans 48
Residential Lot Valuation 59
Land Residual Analysis 71
Reconciliation of Lot Value 80
Market Value by Ownership 81
Exposure Time 82
Marketing Time 83
Certification 84
Assumptions and Limiting Conditions 86
Addenda
A. Appraiser Qualifications
B. Definitions
C. Preliminary Title Report
D. Comparable Data
Land Sales - North Shore at Rockport
Ranch
Land Sales - West Shore at Rockport
Ranch

Executive Summary 1
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Executive Summary
Property Name
Address
Property Type
Owner of Record
Tax ID
Land Area 78.80 acres; 3,432,528 SF
Zoning Designation
Highest and Best Use
Exposure Time; Marketing Period 6-9 months; 6-9 months
Effective Date of the Appraisal August 30, 2024
Date of the Repor
t September 27, 2024
Property Interest A ppraised
Value Conclusion
Value Type & Appraisal Premise Interest Appraised Date of Value No. of Lots Value Conclusion Aggregate, or Cumulative, Appraised Values Fee Simple August 30, 2024 254 $87,998,000 Aggregate, or Cumulative, Assessed Values - - 51 $28,930,504 Total Aggregate, or Cumulative, Value of CFD No. 2023-1 (Rockport Ranch)
Fee Simple August 30, 2024 305 $116,928,504
Rockport Ranch SP - MHDR and MDR, Rockport Ranch Specific Plan - Courtyard Residential and Single-Family Residential
The values reported above are subject to the definitions, assumptions, and limiting conditions set forth in the accompanying re port of which this summary is a part. No party other than City of Menifee and its associated finance team may use or rely on the information, opin ions, and conclusions contained in the report. It is assumed that the users of the report have read the entire report, including all of the definitio ns, assumptions, and limiting conditions contained therein.

Residential use
Fee Simple
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Sunset Pier Road
Meni fee, Ri versi de County, Cal i forni a 92584
Land - Single Family Development Land
Lennar Homes of California, LLC, AG EHC II (LEN) CA 1, L.P., and Individual Homeowners 364-460-001 through -034, -037 through -052, 364-470-001 through -026, -030 through -082, 364-480-001 through -050, 364-490-001 through -072 and 364-500-001 through -054

Extraordinary Assumptions and Hypothetical Conditions
(None)

1. The value derived herein is based on the hypothetical condition that certain impact fees to be financed by the CFD No. 2023-1 Revenue Bonds, Series 2024, have been paid.

The use of any extraordinary assumption or hypothetical condition may have affected the assignment results.

The value conclusions are based on the following hypothetical conditions. A hypothetical condition is 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.

The value conclusions are subject to the following extraordinary assumptions. An extraordinary assumption is 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.

Subject Description 2
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Identification of the Appraisal Problem
Subject Description
The subject is the City of Menifee Community Facilities District (CFD) No. 2023-1 (Rockport Ranch) (“CFD No. 2023-1”), which is generally located at the southwest corner of Old Newport Road and Briggs Road, within the city of Menifee, Riverside County, California. The subject is comprised three communities North, West, and South Shore at Rockport Ranch, which have 109, 96, and 100 lots, respectively. The communities have typical lot sizes ranging from 3,600 to 6,500 square feet. North and South Shore at Rockport Ranch have a traditional lot configuration, while West Shore at Rockport Ranch has an 8-lot cluster configuration. All three communities are being developed by Lennar Homes.

As of the date of value, August 30, 2024, the subject consists of partially-improved lots, improved lots with homes under construction, and completed homes. The appraised property comprises 112 completed and sold homes, six completed (unsold) homes, 90 improved lots with homes under construction at various stages and 46 partially improved lots. In total, the appraised properties comprise 254 Assessor's Parcels; the balance of City of Menifee Community Facilities District No. 2023-1 (Rockport Ranch) is 51 completed and sold homes reflected on the County of Riverside Assessor's Tax Roll with a complete assessed value for both land and improvements. As requested, these 51 Assessor's Parcels are not appraised herein; rather, the aggregate, or cumulative, Assessed Value according to the 2024/25 Tax Roll is presented herein for Bond Financing purposes. A legal description of the property is provided in the addenda.

Property Identification
Property Name City of Menifee CFD No. 2023-1 (Rockport Ranch) Address Sunset Pi er Road
Menifee, California 92584
Tax ID 364-460-001 through -034, -037 through -052, 364-470-001 through -026, -030 through -082, 364-480-001 through -050, 364-490-001 through -072 and 364-500-001 through -054 Owner of Record Lennar Homes of California, LLC, AG EHC II (LEN) CA 1, L.P., and Individual Homeowners

Sale History
To the best of our knowledge, no sale or transfer of ownership has taken place within a three-year period prior to the effective appraisal date and to the best of our knowledge the property is not currently being marketed for sale in bulk.

Lennar Homes of California, Inc. is utilizing a land bank (AG EHC II (LEN) CA 1, L.P.) to serve as a financing mechanism, which is relatively commonplace for transactions involving national homebuilders, especially within master planned communities such as the subject. Lennar had the option to acquire residential lots over time typically pursuant to a takedown schedule. This transaction is not considered an arm’s length transfer of the subject lots, as defined; thus, no further consideration is warranted. For purposes of analysis herein, there is no delineation between Lennar Homes of California, Inc. and AG EHC II (LEN) CA 1, L.P. in the determination of market value, in bulk, of the properties held by the master developer.

Pending Transactions 3
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Based on the scope of work for this assignment, a detailed sales history was not performed on a parcel-by-parcel basis. From information provided and the analysis included in this report, it is our understanding prior and pending home sales within the past 12 months were negotiated and transferred at prices consistent with market conditions as of the date of the sale.

Pending Transactions
Based on discussions with the appropriate contacts, the property is not subject to an agreement of sale or an option to buy, nor is it listed for sale, in bulk as of the effective appraisal date. However, some individual homes that are under construction are in contract from the homebuilder to individual homeowners.

Appraisal Purpose
The purpose of this Appraisal Report is to estimate the market value (fee simple estate), by Assessor’s parcel, and the cumulative, or aggregate value of the appraised properties comprising City of Menifee CFD No. 2023-1 (Rockport Ranch), subject to the hypothetical condition certain proceeds from the 2024 Special Tax Bonds will be available to finance the certain impact fees, as of the effective date of the appraisal, August 30, 2024. The date of the report is September 27, 2024. The appraisal is valid only as of the stated effective date. The home values are based on a “not-less-than” value for the smallest floor plan within each community with a completed home, without consideration for upgrades and lot premiums. Further, we have excluded any contributory value of unfinished homes, but consider the value of permits and impact fees paid for lots with either construction underway or not yet begun.

Value Type Definitions
The definitions of the value types applicable to this assignment are summarized below.

Market Value
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 and 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 acting in what they consider their own best interests;

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

Property Rights Definitions 4
City of Menifee CFD No. 2023-1 (Rockport Ranch)

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 Assessed Value
The value of a property according to the tax rolls in ad valorem taxation; may be higher or lower than market value, or based on an assessment ratio that is a percentage of market value. 2 Property Rights Definitions
The property rights appraised which are applicable to this assignment are defined as follows.

Fee Simple Estate
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 Client and Intended User(s)
The client is City of Menifee. The intended users are City of Menifee and its associated finance team.

No party or parties beyond the client and The Finance Team with this proposed issuance may use or rely on the information, opinions, and conclusions contained in this report; however, this appraisal report may be included in the offering document provided in connection with the issuance and sale of the Bonds.

Intended Use
The intended use of the appraisal is for bond underwriting purposes. The appraisal is not intended for any other use.

Applicable Requirements
This appraisal report conforms to the following requirements and regulations:
 Uniform Standards of Professional Appraisal Practice (USPAP);  Code of Professional Ethics and Standards of Professional Practice of the Appraisal Institute;  Applicable state appraisal regulations;
 Interagency Appraisal and Evaluation Guidelines issued December 10, 2010;  Appraisal Standards for Land Secured Financing published by the California Debt and Investment Advisory Commission (CDIAC) (2004).

Report Format
Standards Rule 2-2 (Content of a Real Property Appraisal Report) contained in the Uniform Standards of Professional Appraisal Practice (USPAP) requires each written real property appraisal report to be

1 Code of Federal Regulations, Title 12, Chapter I, Part 34.42[h]; also, Interagency Appraisal and Evaluation Guidelines, Federal Register, 75 FR 77449, December 10, 2010, page 77472 2 Appraisal Institute, The Dictionary of Real Estate Appraisal, 7th ed. (Chicago: Appraisal Institute, 2022) 3 Appraisal Institute, The Dictionary of Real Estate Appraisal, 7th ed. (Chicago: Appraisal Institute, 2022) Prior Services 5
City of Menifee CFD No. 2023-1 (Rockport Ranch)
prepared as either an Appraisal Report or a Restricted Appraisal Report. This report is prepared as an Appraisal Report as defined by USPAP under Standards Rule 2-2(a), and incorporates practical explanation of the data, reasoning, and analysis used to develop the opinion of value.

Prior Services
USPAP requires appraisers to disclose to the client any other services they have provided in connection with the subject property in the prior three years, including valuation, consulting, property management, brokerage, or any other services. We have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding the agreement to perform this assignment.

Appraiser Competency
No steps were necessary to meet the competency provisions established under USPAP. The assignment participants have appraised several properties similar to the subject in physical, locational, and economic characteristics, and are familiar with market conditions and trends; therefore, appraiser competency provisions are satisfied for this assignment. Appraiser qualifications and state credentials are included in the addenda of this report.

Appraiser Competency 6
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Scope of Work
Introduction
The appraisal development and reporting processes require gathering and analyzing information about the assignment elements necessary to properly identify the appraisal problem. The scope of work decision includes the research and analyses necessary to develop credible assignment results, given the intended use of the appraisal. Sufficient information includes disclosure of research and analyses performed and might also include disclosure of research and analyses not performed.

To determine the appropriate scope of work for the assignment, the intended use of the appraisal, the needs of the user, the complexity of the property, and other pertinent factors were considered. The concluded scope of work is described below.

Research and Analysis
The type and extent of the research and analysis conducted are detailed in individual sections of the report. Although effort has been made to confirm the arms-length nature of each sale with a party to the transaction, it is sometimes necessary to rely on secondary verification from sources deemed reliable.

Subject Property Data Sources
The legal and physical features of the subject property, including size of the site, flood plain data, seismic zone designation, property zoning, existing easements and encumbrances, access and exposure, and condition of the improvements (as applicable) were confirmed and analyzed.

Inspection
Details regarding the property inspection conducted as part of this appraisal assignment are summarized as follows:

Property Inspection
Party Inspection Type Inspection Date
Blake Fassler None N/A
Kevin Ziegenmeyer, MAI On-site August 30, 2024
Eric Segal, MAI On-site August 30, 2024

The aerials of the subject were taken August 25, 2024.

Valuation Methodology
Three approaches to value are typically considered when developing a market value opinion for real property. These are the cost approach, the sales comparison approach, and the income capitalization approach. Use of the approaches in this assignment is summarized as follows:

Appraiser Competency 7
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Approaches to Value
Approach Appl i cabi l i ty to Subject Us e i n As s i gnment Cos t Approach Not Appl i cabl e Not Uti l i zed
Sales Comparison A pproach A pplicable Utilized
Income Capitalization Approach Not Applicable Not Utilized

The valuation began by employing the sales comparison approach to estimate the not-less-than market value for the completed single-family homes, based on the smallest floor plan being marketed within each community.

The market value of the residential lots was estimated utilizing the sales comparison approach and land residual analysis to value. In valuing the subject lots, we selected two benchmark lot categories.

In the sales comparison approach, adjustments were applied to the prices of comparable bulk lot transactions, and a market value for each benchmark lot category was concluded. Additionally, we utilized a land residual analysis (a variation of the cost approach and income capitalization approaches), in which all direct and indirect costs are deducted from an estimate of the anticipated gross sales price of the improved home product; the resultant net sales proceeds are then discounted to present value at an anticipated discount rate over the development and absorption period to indicate the residual value of the lots. After reconciling the two approaches to value, we apply a lot size adjustment factor to account for differing lot sizes from the benchmark lot category.

This appraisal will utilize the term “improved lot” to denote a residential lot that has all off-sites and on-sites in place, and includes any impact fees due up until building permit. Building permits and fees due at building permit are excluded for finished lot. Terminology for this type of improved lot can vary by market area, and is sometimes referred to as a “loaded lot”.

The market value estimates for the various taxable land use components described above were then assigned to the various assessor’s parcels comprising the appraised properties in order to derive the cumulative, or aggregate, value of CFD No. 2023-1. Our analysis excluded a typical cost approach; however, costs associated with home construction were taken into consideration as part of the land residual analysis and determination of financial feasibility. Given the limited, if any, income producing potential of the land, an income approach was not utilized.

Area Analysis – Riverside County 8
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Economic Analysis
Area Analysis – Riverside County
Introduction
Riverside County is part of a region known as the Inland Empire of southern California, southeast of Los Angeles. The county is bordered by San Bernardino County to the north, Orange County to the west, San Diego and Imperial counties to the south, and the state of Arizona to the east. Major cities in the county include Riverside, Moreno Valley, Corona, Murrieta and Temecula. In general, Riverside County is one of California’s fastest growing metropolitan areas as new residents locate here from the more expensive metropolitan areas of Los Angeles and San Diego.

Population
The county has a population of 2.44 million and has grown at an average rate of 0.5% per year over the past five years. The following table illustrates recent population trends for Riverside County.

Population Trends
City 2018 2019 2020 2021 2022 2023 %/Yr (5-year)
Banning 31,014 31,068 30,621 30,592 30,856 31,250 0.2% Beaumont 48,013 49,913 53,318 53,945 54,349 56,590 3.6% Blythe 19,772 19,530 18,586 17,376 17,417 17,265 -2.5% Calimesa 8,959 9,015 10,028 10,588 10,950 10,962 4.5% Canyon Lake 10,990 11,021 11,069 11,082 11,003 10,949 -0.1% Cathedral City 53,148 53,308 51,356 51,599 51,621 51,433 -0.6% Coachella 46,697 47,318 41,900 41,931 41,935 42,462 -1.8% Corona 166,299 166,937 156,637 157,182 157,139 157,005 -1.1% Desert Hot Springs 29,823 30,019 32,415 32,351 32,389 32,608 1.9% Eastvale 65,509 65,735 69,742 70,457 69,978 69,514 1.2% Hemet 84,126 84,354 89,325 89,302 89,170 89,918 1.4% Indian Wells 5,314 5,351 4,759 4,791 4,785 4,774 -2.0% Indio 88,984 90,112 88,795 89,422 89,789 90,837 0.4% Jurupa Valley 104,645 106,056 104,828 105,131 105,154 104,983 0.1% Lake Elsinore 62,622 63,270 70,572 71,225 71,989 71,973 3.0% La Quinta 40,563 40,663 37,504 37,727 37,562 37,979 -1.3% Menifee 92,110 94,710 102,466 104,323 107,411 110,034 3.9% Moreno Valley 205,450 207,190 208,237 208,387 208,302 208,289 0.3% Murrieta 112,352 113,207 110,702 111,024 110,592 109,998 -0.4% Norco 26,593 26,473 26,659 24,680 25,035 25,037 -1.2% Palm Desert 53,554 53,695 50,696 50,683 50,626 50,615 -1.1% Palm Springs 47,253 47,410 44,206 44,312 44,165 44,092 -1.3% Perris 77,649 78,095 78,614 78,867 78,474 78,948 0.3% Rancho Mirage 18,257 18,397 16,588 16,692 16,854 17,012 -1.4% Riverside 325,916 327,076 316,307 309,598 314,818 313,676 -0.8% San Jacinto 48,536 49,655 53,835 54,186 54,303 54,103 2.3% Temecula 112,243 112,561 109,820 109,881 109,468 108,899 -0.6% Wildomar 36,436 36,878 36,720 36,713 36,438 36,336 -0.1% Unincorporated 374,835 380,040 391,880 394,680 398,404 401,693 1.4% Total 2,397,662 2,419,057 2,418,185 2,418,727 2,430,976 2,439,234 0.3% Source: California Department of Finance
Area Analysis – Riverside County 9
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Riverside is the fourth most populous county in California, following Los Angeles, San Diego and Orange Counties. The majority of residents live within incorporated areas, the largest of which is the city of Riverside, with a population of just over 313,000.

Employment & Economy
The California Employment Development Department (EDD) has reported the following employment data for Riverside County over the past five years.

Riverside County saw declining unemployment rates in 2004-2006, increases from 2007 to 2010, declines between 2011 and 2019, a significant increase in 2020 due to the pandemic followed by improvement in 2021 and 2022. A slowing economy has contributed to rising unemployment during 2023.

The California Employment Development Department reported an unemployment rate of 5.5% in Riverside County in January 2024, up from 4.5% a year ago and compared to 5.7% for California and

4.1% for the nation.

As of January 2024, it was reported 23,700 non-farm jobs were gained in the Riverside-San Bernardino-Ontario MSA year-over-year. Annual job growth has slowed in recent quarters. The greatest job growth was in the Private Education/Health Services sector with 22,300 jobs gained, followed by the Government sector with 12,400 jobs gained. The greatest job loss was in the Trade, Transportation/Utilities sector with a loss of 10,700 jobs, followed by Leisure/Hospitality with a loss of 3,800 jobs. The following chart indicates the percentage of total employment for each sector in the metro as of January 2024.

Employment Trends
2018 2019 2020 2021 2022 2023
Labor Force 1,090,100 1,108,100 1,121,100 1,133,000 1,152,100 1,157,900 Employment 1,041,700 1,061,500 1,008,000 1,050,000 1,104,100 1,102,300 Annual Employment Change 27,500 19,800 -53,500 42,000 54,100 -1,800 Unemployment Rate 4.4% 4.2% 10.1% 7.3% 4.2% 4.8%
Source: California Employment Development Department
Area Analysis – Riverside County 10
City of Menifee CFD No. 2023-1 (Rockport Ranch)

The region’s largest employment sector, accounting for roughly 27% of total employment, is Trade/Transportation/Utilities, which includes wholesale and retail trade; followed by Private Education/Health Services (18%) and Government (16%).

The region’s largest employers are listed in the following table.

Area Analysis – Riverside County 11
City of Menifee CFD No. 2023-1 (Rockport Ranch)

Household Income
Median household income represents a broad statistical measure of well-being or standard of living in a community. The median income level divides households into two equal segments with one half of households earning less than the median and the other half earning more. The median income is considered to be a better indicator than the average household income as it is not dramatically affected by unusually high or low values. According to Claritas Spotlight data reporting service, the median household income estimated for Riverside County in 2024 is $84,882, which is lower than the state of California’s median income of $92,191.

Transportation
Access to and through Riverside County is provided by several major routes, including Interstates 10, 15 and 215, as well as State Routes 60, 62, 74, 79, 86, 91, 111 and 243. The 10 Freeway is the primary Top Employers - Riverside County
Employer Location Description No. of Employees
County of Riverside Countywide County Government 25,366 Amazon Countywide E-Commerce 14,317
March Air Reserve Base March ARB Military Reserve Base 9,600 Nestle UA Mira Loma General Line Grocery Merchant Wholesalers 8,874 University of California, Riverside Riverside University 8,623 State of California Countywide State Government 8,383
Walmart Countywide Retail 7,494
Moreno Valley Unified School District Moreno Valley School District 6,020 Kaiser Permanente Riverside Medical Center Riverside Hospital 5,817 Corona-Norco Unified School District Corona School District 5,478 Riverside Unified School District Riverside School District 5,431 Mt. San Jacinto College San Jacinto Community College District 4,638 Marie Callender Wholesalers, Inc. Corona Wholesale Trade 4,454 Temecula Valley Unified School District Temecula School District 4,022 Eisenhower Medical Center Rancho Mirage Hospital 4,001
Pechanga Resort & Casino Temecula Resort/Casino 4,000
Hemet Unified School District Hemet School District 3,960 Murrieta Valley Unified School District Murrieta School District 3,552 Starcrest of California Perris E-Commerce 3,450
Palm Springs Unified School District Palm Springs School District 3,328 Stater Bros Countywide Retail Grocery 3,297
Lake Elsinore Unified School District Lake Elsinore School District 3,267 Home Depot Countywide Retail 3,115
Jurupa Unified School District Jurupa Valley School District 2,749 McDonalds Countywide Restaurant 2,721
City of Riverside Riverside City Government 2,700
Target Countywide Retail 2,631
Coachella Valley Unified School District Thermal School District 2,581 Albertsons/Sav-On Countywide Retail Grocery 2,231
Riverside Community College District Riverside Community College District 2,228 Hemet Valley Medical Center Hemet Hospital 2,214
Agua Caliente Band of Cahuilla Indians Rancho Mirage Tribal Government / Casinos 2,200 Spa Resort & Casino Palm Springs Resort & Spa 2,120
Beaumont Unified School District Beaumont School District 2,053 Kroger (Ralphs & Vons) Countywide Retail Grocery 2,035
Abbott Vascular, Inc. Temecula Medical Device Manufacturing 2,008 Desert Regional Medical Center Palm Springs Hospital 1,991 Alvord Unified School District Corona School District 1,936 Lowe's Home Improvement Countywide Retail 1,928
United Parcel Service Countywide Delivery Services 1,678 Source: Riverside County Economic Development Agency, with source cited as "DatabaseUSA.com, Websites, and Public Records, 2023" Area Analysis – Riverside County 12
City of Menifee CFD No. 2023-1 (Rockport Ranch)
east-west connector while the 15 and 215 Freeways are the primary north-south highways. The 91 Freeway provides travel from the Inland Empire to Orange County via the 55 Freeway.

The 10 Freeway links the major southern California cities of Santa Monica, Los Angeles, Ontario, Beaumont, Palm Springs, Indio and Blythe, before intersecting with the City of Phoenix, Arizona and continuing east through New Mexico, Texas, Louisiana, Mississippi, Alabama, and terminating in Jacksonville, Florida.

As a primary north-south connector, Interstate 15 connects the counties of San Bernardino, Riverside and San Diego. The route extends north through Nevada, Arizona, Utah, Idaho and Montana to the Canadian border. Interstate 15 is a major thoroughfare for traffic between San Diego and the Inland Empire, as well as between Southern California and Las Vegas, Nevada. Interstate 215 comprises approximately 55 miles of interstate highway in the Inland Empire. The southern terminus of Interstate 215 is at the junction of Interstate 15 in Murrieta in south Riverside County and travels through Perris before joining the 60 Freeway in Moreno Valley. This interstate provides an alternative to Interstate 15 for travel between Phoenix, Las Vegas, San Bernardino and the San Diego area.

Public transportation is provided by various agencies. Riverside Transit Agency serves the western third of Riverside County, SunLine Transit Agency serves Palm Springs and the Coachella Valley area, Palo Verde Valley Transit Agency serves Blythe near the Arizona border, Pass Transit serves the San Gorgonio Pass communities, and Corona Cruiser serves the community of Corona. In addition, Riverside County is also served by Greyhound buses and Amtrak passenger trains.

Recreation & Culture
Riverside County offers innumerable recreational and cultural opportunities, including many public parks, schools, golf courses, museums and performing arts venues. Popular attractions include the Botanical Gardens at the University of California, Riverside; the historic Mission Inn in downtown Riverside; March Field Air Museum, an aviation museum near Moreno Valley and Riverside, adjacent to the March Air Reserve Base; Temecula Valley, a tourist destination in the southern part of the county with numerous wineries, wine tasting rooms, bed and breakfast inns and wedding venues; and Castle Park, an amusement park. Annual events in the county include the Festival of Lights in Riverside, known for its display of nearly three million Christmas lights; Ghost Walk Riverside; Temecula Valley Balloon and Wine Festival; and Harvest Wine Celebration.

Riverside County is home to multiple higher education institutions including, but not limited to, the University of California Riverside, California Baptist University, California Southern Law School, California State University San Bernardino and Mt. San Jacinto College.

Conclusion
In general, Riverside County is one of the fastest growing areas in the state. New residents have been relocating here from the more expensive metropolitan areas of Los Angeles and San Diego. The region Area Analysis – Riverside County 13
City of Menifee CFD No. 2023-1 (Rockport Ranch)
offers diverse employment opportunities, numerous colleges and universities, extensive transportation routes, shopping centers, public services and recreational activities.

In recent years, market and economic conditions were strong, with unemployment rates falling to historical lows. Employment conditions declined sharply in 2020 after the onset of the pandemic and though market and economic conditions have since improved, current macroeconomic factors, specifically high inflation and rising interest rates, have reintroduced uncertainty in the market.

Recovery in the market is expected to be gradual and the long-term outlook for the region is good.

Area Analysis – Riverside County 14
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Area Map

Surrounding Area Analysis 15
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Surrounding Area Analysis
Introduction
This section of the report provides an analysis of the observable data that indicate patterns of growth, structure and/or change that may enhance or detract from property values. For the purpose of this analysis, a neighborhood is defined as “a group of complementary land uses; a congruous grouping of inhabitants, buildings, or business enterprises.”
Neighborhood Boundaries
The boundaries of a neighborhood identify the physical area that influences the value of the subject property. These boundaries may coincide with observable changes in prevailing land use. Physical features such as the type of development, street patterns, terrain, vegetation, and parcel size tend to identify neighborhoods. Roadways, waterways, and changing elevations can also create neighborhood boundaries.

The subject is located within the city of Menifee, Riverside County. The neighborhood boundaries can generally be described as Interstate 215 to the west, city limits of Menifee to the east, Garbani Road to the south, and McCall Boulevard to the north.

Access and Linkages
The subject is located just south of Domenigoni Parkway/Newport Road, which is a primary east and west throughfare that connects Lake Elsinore to the west and Hemet to the east. Interstate 215 is approximately two miles west of the subject (via Domenigoni Parkway/Newport Road), and extends approximately 55 miles of interstate highway in the Inland Empire. The southern terminus of Interstate 215 is at the junction of Interstate 15 in Murrieta in south Riverside County; to the north it travels through Perris before joining the 60 Freeway in Moreno Valley. State Route 74 runs east/west from San Juan Capistrano in Orange County to Palm Desert in Riverside County, stretching a total of 111 miles.

Public transportation is provided by the Riverside Transit Agency (RTA), which has a several stops along McCall and Murrieta Road to the northwest of the subject.

The county’s main airport is the Palm Springs International Airport. This two-runway airport is located about two miles east of downtown Palm Springs and is highly seasonal, with most flights operating during the winter; however, the nearest major airport to the appraised properties is Ontario International Airport (San Bernardino County), just northwest of Riverside County.

Demographics
A demographic profile of the surrounding area, including population, households, and income data, is presented in the following table.

Surrounding Area Analysis 16
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Surrounding Area Demographics
2024 Estimates 3-Mile Radius 5-Mile Radius 10-Mile Radius 92584 (Menifee,
CA)
Riverside County,
CA
Population 2020 48,638 118,513 474,019 55,643 2,418,185 Population 2024 52,343 127,603 497,226 60,413 2,500,920 Population 2029 57,124 139,135 528,861 66,285 2,623,551 Compound % Change 2020-2024 1.9% 1.9% 1.2% 2.1% 0.8%
Compound % Change 2024-2029 1.8% 1.7% 1.2% 1.9% 1.0%
Households 2020 15,161 39,093 149,299 16,864 763,283
Households 2024 16,169 41,615 155,940 18,183 791,632
Households 2029 17,529 44,971 165,401 19,836 832,792
Compound % Change 2020-2024 1.6% 1.6% 1.1% 1.9% 0.9%
Compound % Change 2024-2029 1.6% 1.6% 1.2% 1.8% 1.0%
Median Household Income 2024 $106,759 $93,912 $92,810 $112,051 $84,882 Average Hous ehol d Si ze 3.2 3.1 3.2 3.3 3.1
College Graduate % 26% 22% 23% 26% 24%
Median Age 37 39 38 36 38
Owner Occupied % 80% 78% 73% 81% 67%
Renter Occupied % 20% 22% 27% 19% 33%
Median Owner Occupied Housing Value $560,712 $528,281 $538,879 $577,682 $548,183 Median Year Structure Built 2004 2002 2000 2005 1989
Average Travel Ti me to Work i n Mi nutes 42 42 40 43 35 Source: Claritas

As shown above, the current population within a 3-mile radius of the subject is 52,343, and the average household size is 3.2. Population in the area has grown since the 2020 census, and this trend is projected to continue over the next five years. Compared to Riverside County overall, the population within a 3-mile radius is projected to grow at a faster rate.

Median household income is $106,759, which is greater than the household income for Riverside County. Residents within a 3-mile radius have a slightly higher level of educational attainment than those of Riverside County with higher median owner-occupied home values. Note the median household income and owner-occupied housing value within the zip code is greater than Riverside County.

Land Use
The subject’s immediate area consists mainly of residential development, agricultural, and vacant land. The subject is located adjacent to an egg farm that houses eggs. Most of the commercial development is located along the 215 Freeway. To the west of the subject along Newport Road at the 215 Freeway is a large retail development, which includes the Menifee Countryside Marketplace, Menifee Town Center, and Menifee Lakes Plaza. Some of the tenants within these centers include Lowes, Target, Ralphs, Aldi, Living Spaces, LA Fitness, Ross, Best Buy, Home Goods, Petsmart, Party City, and Ulta. These larger retailers are surrounded by numerous nationally-recognized in-line or pad retailers like In-N-Out Burger, Red Robin, Buffalo Wild Wings, Sonic Drive-in, Taco Bell, and Bank of America.

Surrounding Area Analysis 17
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Diamond Valley Lake, which is one of the largest man-made reservoirs in Southern California, is located four miles to the east of the subject. The lake features various recreational activities like trails, fishing, and boating.

The University of California, Riverside campus is located on 1,900 acres in the suburban district of Riverside, approximately 26 miles northwest of the subject. The university is consistently ranked as one of the most ethnically and economically diverse universities in the U.S. Mt. San Jacinto College (MSJC) serves a 1,700 square-mile area from the San Gorgonio Pass to Temecula. MSJC offers strong programs in nursing, administration of justice, automotive/ transportation technology, and business administration to name a few. Enrollment in the 2021-2022 school year was greater than 24,000 students. The closest hospital is the Menifee Global Medical Center approximately three miles to the northwest of the subject.

Outlook and Conclusions
The subject is located in city of Menifee, Riverside County. The neighborhood is primarily residential in nature, with commercial development in the neighborhood along the 215 Freeway. The subject benefits from good access to and from the neighborhood’s main transportation routes and easy access to major highways. The subject’s area has experienced steady development growth over the past five years.

Surrounding Area Analysis 18
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Surrounding Area Map

Residential Market Analysis 19
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Residential Market Analysis
Given prevailing land use patterns and the subject’s zoning, a likely use of the property is for residential development. In the following paragraphs, we examine supply and demand indicators for residential development in the subject’s area.

Submarket Overview
The subject is located in the city of Menifee. The subject is adjacent to newer home construction and planned future development and is considered to have good transportation linkages. The neighborhood is characterized as a suburban area that appeals to both local workers and commuters.

Based on existing surrounding homes and new projects under development, the subject characteristics best support a project designed for a combination of entry-level and/or first-time move-up home buyers.

Single-Family Building Permits
Single-family building permits for the city of Menifee as well as Riverside County totals are shown in the following table. When we compare the trend in permitting, population and price, there can be a relationship. More supply of homes could eventually mean lower prices, whereas conversely a lower number of permits pulled could eventually mean higher prices. Further, the number of permits pulled shows builder confidence in the current market when compared to other years.

Single-Family Building Permits
Year City of Menifee % Change County of Riverside % Change 2014 490 -- 5,074 --
2015 408 -16.73% 4,934 -2.76%
2016 565 38.48% 5,987 21.34%
2017 717 26.90% 6,703 11.96%
2018 976 36.12% 7,676 14.52%
2019 1,017 4.20% 7,002 -8.78%
2020 1,410 38.64% 8,895 27.04%
2021 1,264 -10.35% 7,835 -11.92%
2022 904 -28.48% 8,461 7.99%
2023 875 -3.21% 8,836 4.43%
Source: SOCDS Building Permits Monthly Request

Residential Market Analysis 20
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Single-Family Building Permits: 2024 Preliminary Data
Month City of Menifee County of Riverside
January 20 670
February 24 678
March 36 610
Apri l 61 651
May 75 838
June - 792
Total 216 4,239
Source: SOCDS Building Permits Monthly Request

Active New Home Projects Pricing and Absorption
The city of Menifee is located within the South Riverside submarket of the Inland Empire. The Ryness Report provides a comparison of sales activity between various regions and markets, including year- to-date totals from the same week of the previous year. Their surveys and reports include sales, buyer traffic, and financing rates on activity in major residential developments throughout California, Arizona, and Nevada. The report for the Inland Empire for the week ending August 25, 2024, is included as follows.

Residential Market Analysis 21
City of Menifee CFD No. 2023-1 (Rockport Ranch)

The absorption within the Inland Empire has increased 2% from a year ago. The number of projects within Inland Empire varies year by year due to the extended entitlement and development timelines.

The Ryness Report has identified 42 active projects in the South Riverside submarket, with 13 of those in the the city of Menifee. These projects are summarized as follows:

Residential Market Analysis 22
City of Menifee CFD No. 2023-1 (Rockport Ranch)

Residential Market Analysis 23
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Projects considered most similar to the subject are further detailed in the following table.

Active Projects
Proj ect Name Communi ty Devel oper
Average
Price
Avg. Home
Size (SF)
Average
Price/SF
Uni ts
Planned Units Sold
Avg.

Sales/Week
Avg.

Sales/Month
The Village Menifee Century Communities $547,323 2,220 $246.54 126 69 1.34 5.36 Oak Shade at Shadow Mountain Menifee KB Homes $632,936 1,931 $327.78 160 145 1.28 5.12 Poppy at Countryview Menifee KB Homes $528,823 2,189 $241.58 177 110 1.10 4.40 Sage at Countryvie w Menifee KB Homes $562,657 2,485 $226.42 173 138 1.27 5.08 Quartz Ranch Meadow Walk Menifee Lennar $633,784 2,197 $288.48 157 124 1.09 4.36 Quartz Ranch Canyon View Menifee Lennar $771,809 3,090 $249.78 125 120 1.05 4.20 Rockport Ranch North Shore Menifee Lennar $627,387 2,279 $275.29 109 64 0.95 3.80 Rockport Ranch South Shore Menifee Lennar $736,385 2,975 $247.52 100 65 0.96 3.84 Rockport Ranch West Shore Menifee Lennar $582,586 2,071 $281.31 96 68 1.01 4.04 Greenway at Cimarron Ridge Menifee Pulte Homes $620,657 2,796 $221.98 70 55 0.61 2.44 Meadows at Cimarron Ridge Menifee Pulte Homes $739,740 3,441 $214.98 116 57 0.63 2.52 Pathway at Cimarron Ridge Menifee Pulte Homes $587,990 2,393 $245.71 122 65 0.72 2.88 Legacy at Braverde Menifee Richmond American - 3,052 - 137 82 0.66 2.64 Minimum $528,823 1,931 $214.98 2.44
Maximum $771,809 3,441 $327.78 5.36
Average $631,006 2,548 $255.61 3.90
Source: Ryness Reports and Developer's Websites. *Information available was not complete for the average sale price

The absorption within projects in Menifee most similar to the subject, including the three subject projects, ranged from 2.44 to 5.36 sales per month with an average of 3.90 sales per month.

Resale Pricing
The following table shows historical resale data for more recently built homes (2021 and newer) in the city of Menifee. The resale market is analyzed as a further gauge of buyer demand for housing. Often home buyers are considering housing purchase options that cover both the new home market, as well as the resale market.

Residential Market Analysis 24
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Resales
Address Sale Date
Li vi ng Area
(SF) Sale Price
Last Li st
Price
Sales
Price /SF Sale /L ist Ye ar Built
Days on
Market
Lot Si ze
(SF)
28358 Patches DR 6/4/2024 2,381 $587,687 $617,990 $247 95.10% 2023 151 7,540 28298 Hopscotch DR 6/4/2024 2,381 $610,000 $622,368 $256 98.01% 2023 96 8,000 32573 Mckiernan LN 6/4/2024 2,615 $755,000 $725,000 $289 104.14% 2022 50 8,712 30442 Freeman DR 6/4/2024 3,405 $780,965 $732,165 $229 106.67% 2023 8 6,020 30467 Freeman DR 6/4/2024 3,136 $790,044 $788,681 $252 100.17% 2023 114 7,432 30454 Freeman DR 6/5/2024 3,048 $730,068 $740,068 $240 98.65% 2023 197 6,020 30407 Freeman DR 6/5/2024 2,970 $752,397 $749,172 $253 100.43% 2023 226 6,717 30431 Freeman DR 6/5/2024 3,040 $759,324 $758,393 $250 100.12% 2023 100 7,385 30443 Freeman DR 6/5/2024 2,910 $852,518 $852,518 $293 100.00% 2023 6 6,923 27094 Nolana WAY 6/6/2024 2,872 $640,000 $649,999 $223 98.46% 2021 209 7,893 26932 Chance DR 6/9/2024 1,620 $542,990 $542,990 $335 100.00% 2023 67 5,071 26925 Chance DR 6/9/2024 2,219 $556,397 $547,990 $251 101.53% 2023 66 5,569 27097 Lasso WAY 6/11/2024 1,906 $615,000 $615,000 $323 100.00% 2021 26 7,292 24068 Timber Farm DR 6/11/2024 2,418 $799,900 $799,900 $331 100.00% 2021 9 7,684 26920 Chance DR 6/12/2024 1,977 $605,928 $546,990 $306 110.77% 2023 11 5,011 30466 Freeman DR 6/14/2024 2,970 $719,101 $729,101 $242 98.63% 2023 175 6,453 32630 Bullard ST 6/16/2024 1,740 $659,990 $659,990 $379 100.00% 2021 94 5,990 28438 Blackjack DR 6/17/2024 2,219 $626,000 $625,000 $282 100.16% 2023 13 5,507 28199 Schola DR 6/21/2024 1,889 $610,000 $600,000 $323 101.67% 2021 18 5,663 25181 Fortuna ST 6/21/2024 2,175 $633,888 $628,888 $291 100.80% 2021 10 9,148 26029 Redoak ST 6/21/2024 2,539 $620,000 $649,900 $244 95.40% 2021 115 7,841 25375 Summer creek drive 6/23/2024 1,959 $600,000 $600,000 $306 100.00% 2023 10 7,453 29847 Canary wood Ct 6/23/2024 3,047 $689,000 $689,000 $226 100.00% 2022 9 6,000 29528 Tulipwood ST 6/23/2024 2,845 $700,000 $700,000 $246 100.00% 2023 16 6,717 29451 Santa Ynez CIR 6/28/2024 2,605 $825,000 $824,990 $317 100.00% 2022 55 7,841 26908 Chance DR 7/1/2024 2,766 $660,594 $601,990 $239 109.74% 2023 107 5,053 32822 Forgecroft ST 7/1/2024 2,911 $725,000 $725,000 $249 100.00% 2022 19 9,056 29538 Holsteiner WAY 7/1/2024 3,903 $900,000 $850,000 $231 105.88% 2021 1 8,276 24079 Kerrigan DR 7/2/2024 2,418 $660,000 $669,999 $273 98.51% 2022 5 7,200 32256 Bullard ST 7/2/2024 2,730 $660,540 $675,540 $242 97.78% 2023 10 5,100 32652 Bullard ST 7/2/2024 2,080 $778,482 $693,990 $374 112.17% 2021 122 5,665 32087 Parker ST 7/3/2024 2,780 $714,540 $724,540 $257 98.62% 2023 63 6,000 29414 Whitewood ST 7/4/2024 3,013 $735,000 $740,000 $244 99.32% 2022 27 6,050 32093 Parker ST 7/6/2024 3,100 $719,705 $729,705 $232 98.63% 2023 96 6,000 32190 Bullard ST 7/9/2024 3,172 $800,000 $829,990 $252 96.39% 2023 78 5,587 31104 Alcove LN 7/10/2024 2,531 $708,000 $698,888 $280 101.30% 2021 27 8,215 24326 Fair Oaks CT 7/16/2024 2,898 $685,000 $675,000 $236 101.48% 2021 3 6,970 28384 Abbey LN 7/18/2024 3,107 $716,200 $719,900 $231 99.49% 2022 14 6,395 26853 Chance DR 7/22/2024 1,977 $578,990 $578,990 $293 100.00% 2023 24 5,150 25417 Circle Stone DR 7/24/2024 1,959 $564,112 $564,112 $288 100.00% 2023 222 8,304 32520 Bullard ST 7/24/2024 2,075 $620,000 $615,000 $299 100.81% 2022 117 5,227 32716 Dahl Jr LN 7/24/2024 3,040 $698,952 $689,866 $230 101.32% 2023 38 6,050 25367 Circlestone DR 7/24/2024 3,125 $724,721 $708,320 $232 102.32% 2023 251 7,076 32697 Jaenichen LN 7/30/2024 2,371 $620,000 $650,000 $261 95.38% 2022 52 6,098 32071 Parker ST 7/30/2024 3,240 $720,342 $740,342 $222 97.30% 2023 36 6,000 32737 Dahl Jr LN 7/31/2024 2,680 $665,390 $665,390 $248 100.00% 2023 97 6,500 29299 Chandler DR 8/1/2024 2,907 $642,000 $639,999 $221 100.31% 2021 11 6,647 30811 Cats Paw LN 8/2/2024 2,017 $590,000 $599,000 $293 98.50% 2021 5 4,965 32738 Dahl Jr LN 8/2/2024 2,680 $650,000 $658,158 $243 98.76% 2023 110 6,500 Total Sales 49 2,620 $685,689 $682,445 $267 100.50% 2022 69 6,652 (avg.) (avg.) (avg.) (avg.) (avg.) (avg.) (avg.) (avg.) Source: Local Multiple Listing Service (MLS)

Residential Market Analysis 25
City of Menifee CFD No. 2023-1 (Rockport Ranch)
It's worth noting, the resale market remains active; though, the days on market is averaging more than two months. This is due, in large part, to the higher mortgage interest rate environment. New home communities, such as the subject, are providing in the form of incentives mortgage interest rate buy downs for qualified homebuyers, which is resulting in an appreciably higher sales volume than the resale market.

Ability to Pay
In this section, we will examine the ability to pay among prospective buyers for a representative base price point of the lowest priced and the highest priced homes within the three communities. The base price for a 1,860 square foot home in West Shore at Rockport Ranch is $559,545, while the base price for a 4,134 square foot home in South Shore at Rockport Ranch is $885,850.

First, we will estimate the required annual household income based on typical mortgage parameters in the subject’s market area. Specifically, we will employ a loan-to-value ratio of 80% (down payment of 20%), mortgage interest rate of 6.25%, 360 monthly payments, and a 40% ratio for the housing costs as a percent of monthly income (inclusive of principal, interest, all taxes and insurance). Property tax payments are accounted for in the analysis as well as homeowner’s insurance and homeowner’s association. The following table shows the estimate of the annual household income that would be required to afford homes priced at the price point.

Income Required
South Shore at
Rockport Ranch
West Shore at
Rockport Ranch
Home Price $885,850 $559,545
Loan % of Price (Loan to Value) 80% 80%
Loan Amount $708,680 $447,636
Interest Rate 6.25% 6.25%
Mortgage Payment $4,363 $2,756
Property Taxes $933 $617 Based on 1.159060% and direct charges of $923 City of Menifee CFD No. 2023-1 (Rockport Ranch) $405 $227 Homeowner's Association Fee $205 $205
Property Insurance $185 $117
Total Monthly Obligation $6,091 $3,922
Mortgage Payment % of Income 40% 40%
Monthly Income $15,227 $9,804
Annual Income $182,722 $117,652

We have obtained income data from Claritas Spotlight by Environics Analytics, for a 10-mile radius surrounding the subject property, which is considered representative of typical buyers for the subject property. In the following table we show the income brackets within the noted area, along with estimates of the percentage of households able to afford homes priced at the representative price point within each income bracket.

Residential Market Analysis 26
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Household Ability
Household Income Households
Percent of
Households
Percent Able to
Pay Households
Households
Abl e to Pay
Percent of
Households
Percent Able to
Pay Households
Households
Abl e to Pay
< $15,000 8,402 5.4% 0.0% 0 0.0% 5.4% 0.0% 0 0.0%
$15,000 - $24,999 8,539 5.5% 0.0% 0 0.0% 5.5% 0.0% 0 0.0% $25,000 - $34,999 8,498 5.4% 0.0% 0 0.0% 5.4% 0.0% 0 0.0% $35,000 - $49,999 13,020 8.3% 0.0% 0 0.0% 8.3% 0.0% 0 0.0% $50,000 - $74,999 24,092 15.4% 0.0% 0 0.0% 15.4% 0.0% 0 0.0% $75,000 - $99,999 21,258 13.6% 0.0% 0 0.0% 13.6% 0.0% 0 0.0% $100,000 - $124,999 18,639 12.0% 0.0% 0 0.0% 12.0% 29.4% 5,478 3.5% $125,000 - $149,999 15,171 9.7% 0.0% 0 0.0% 9.7% 100.0% 15,171 9.7% $150,000 - $199,999 17,312 11.1% 34.6% 5,982 3.8% 11.1% 100.0% 17,312 11.1% $200,000 - $249,999 8,932 5.7% 100.0% 8,932 5.7% 5.7% 100.0% 8,932 5.7% $250,000 - $499,999 8,583 5.5% 100.0% 8,583 5.5% 5.5% 100.0% 8,583 5.5% $500,000+ 3,496

2.2% 100.0% 3,496 2.2% 2.2% 100.0% 3,496 2.2%
155,942 100.0% 26,993 17.3% 100.0% 58,972 37.8%
South Shore at Rockport Ranch West Shore at Rockport Ranch

Conclusions
Demand for homes in the subject’s market area is considered to be dynamic at the current time as indicated by the overall trend of building permit activity, new home sales prices and activity in recent quarters as well as the absorption rate within new home projects in the subject’s area.

Land Description and Analysis 27
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Property Analysis
Land Description and Analysis
Location and Project Details
The subject is located at the southwest corner of Old Newport Road and Briggs Road, within the city of Menifee, Riverside County, California. CFD No. 2023-1 comprises Assessor’s Parcel Numbers 364-460- 001 through -034, -037 through -052, 364-470-001 through -026, -030 through -082, 364-480-001 through -050, 364-490-001 through -072, and 364-500-001 through -054. The parcel numbers include both the appraised and assessed parcels. Note there are also common area parcels throughout the community, but they are not a part of the appraised property. Several of the homes in West and South Shore at Rockport Ranch have a waterfront premium along a man-made lake. The details of each community comprising the subject is shown in the following table.

Property Summary
Community Builder Tax Zones
No. of
Units
Typical
Lot Si ze
Lot
Configuration
No. of Units
w/Water Premium
North Shore at Rockport Ranch Lennar Tax Zone 2 109 6,000 Traditional - West Shore at Rockport Ranch Lennar Tax Zone 1 96 3,600 8-Pack Cluster 3 South Shore at Rockport Ranch Lennar Tax Zone 2 100 6,500 Traditional 33 305Total - City of Menifee CFD No. 2023-1 (Rockport Ranch)

As noted, the appraised property comprises 112 completed and sold homes, six completed (unsold) homes, 90 improved lots with homes under construction at various stages and 46 partially improved lots. In total, the appraised properties comprise 254 Assessor's Parcels; the balance of City of Menifee Community Facilities District No. 2023-1 (Rockport Ranch) is 51 completed and sold homes reflected on the County of Riverside Assessor's Tax Roll with a complete assessed value for both land and improvements.

The subject has several community amenities such as a man-made lake and pond, community swimming pool, picnic area, BBQ area, several parks and trails. All of the communities are also gated.

Shape and Dimensions
The site is irregular in shape; however, the individual single-family lots are also generally rectangular in shape. Site utility based on shape and dimensions is average.

Topography
The site is generally level and at street grade. The topography does not result in any particular development limitations.

Drainage
No particular drainage problems were observed or disclosed at the time of field inspection. This appraisal assumes that surface water collection, both on-site and in public streets adjacent to the subject, is adequate.

Land Description and Analysis 28
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Flood Hazard Status
The following table provides flood hazard information.

Flood Hazard Status
Community Panel Number 06065C-2070H
Date August 18, 2014
Zone A and X
Description FEMA Zone A: Special flood hazard areas subject to inundation by the 100-year flood. Because detailed hydraulic analyses have not been performed, no base flood elevations or depths are shown. Mandatory flood insurance purchase requirements apply. FEMA Zone X: Areas determined to be outside the 500-year flood plain.

Insurance Required? No

A portion of the subject property is located within FEMA Zone A; however, given the construction of the man-made lake and pond. This mitigates the risk of flood across all three communities and it is anticipated that all of the lots and homes will be located in FEMA Zone X once completed.

Seismic Hazards
All properties in California are subject to some degree of seismic risk. The Alquist-Priolo Earthquake Fault Zoning Act was enacted by the State of California in 1972 to regulate development near active earthquake faults. The Act required the State Geologist to delineate “Earthquake Fault Zones” (formerly known as “Special Studies Zones”) along known active faults in California. Cities and counties affected by the identified zones must limit certain development projects within the zones unless geologic investigations demonstrate that the sites are not threatened by surface displacement from future faulting.

According to information from the California Department of Conservation and the California Geological Survey, the subject is not located within an Alquist-Priolo Special Studies Zone. The subject is not located in a liquefaction zone.

Fire Hazard Risk
The Fire and Resource Assessment Program of CAL FIRE has classified areas of the subject’s City by Fire Hazard Severity Zone. As shown in the following map, the subject’s area has not been classified as an area of concern.

Land Description and Analysis 29
City of Menifee CFD No. 2023-1 (Rockport Ranch)

Environmental Hazards
An environmental assessment report was not provided for review, and during our inspection, we did not observe any obvious signs of contamination on or near the subject. However, environmental issues are beyond our scope of expertise. It is assumed that the property is not adversely affected by environmental hazards.

Ground Stability
A soils report was not provided for our review. Based on our inspection of the subject and observation of development on nearby sites, there are no apparent ground stability problems. However, we are not experts in soils analysis. We assume that the subject’s soil bearing capacity is sufficient to support the existing improvements.

Subject
Land Description and Analysis 30
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Utilities
The provider of utilities to the subject is summarized in the following table.

Utilities
Service Provider
Water Eastern Municipal Water District
Sewer Eastern Municipal Water District
Ele ctricity Southe rn California E dison
Natural Gas Southe rn California Gas
L ocal Phone V arious provide rs

Zoning
The following table summarizes the zoning for the subject.

Zoning Summary
Zoning Jurisdiction City of Menifee Planning Department Zoning Designation Rockport Ranch SP - MHDR and MDR
Description Rockport Ranch Specific Plan - Courtyard Residential and Single-Family Residential Legally Conforming? Appears to be legally conforming
Zoning Change Likely? No
Permitted Uses Residential uses

According to the local planning department, there are no pending or prospective zoning changes. It appears the current use of the site is a legally conforming use. We are not experts in the interpretation of zoning ordinances. An appropriately qualified land use attorney should be engaged if a determination of compliance is required.

Other Land Use Regulations
We are not aware of any other land use regulations that would affect the property.

Easements, Encroachments and Restrictions
We have reviewed a title policy prepared by Lennar Title dated August 7, 2024. The report identifies exceptions to title, which include various utility and access easements that are typical for a property of this type. Such exceptions would not appear to have an adverse effect on value. Our valuation assumes no adverse impacts from easements, encroachments or restrictions and further assumes that the subject has clear and marketable title.

Development/Construction Status
The subject’s current development/construction status from the information provided by the developer is shown in the following table.

Land Description and Analysis 31
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Appraised Property Summary
Community
Partially-
Improved SFR
Lots
Partially
Completed
Homes
Completed
Homes*
Homes Sold to
Individuals*
Total
Appraised
Parcels
A ssessed
Parcels
North Shore at Rockport Ranch 20 35 2 33 90 19
South Shore at Rockport Ranch 21 22 4 39 86 14
West Shore at Rockport Ranch 5 33 0 40 78 18
TOTAL 46 90 6 112 254 51
*Completed homes without a complete assessment for structural improvements by County Assessor

Of the 51 assessed parcel, three of the parcels are model homes of West Shore at Rockport Ranch and the remainder of the parcels represent completed homes held by individual homeowners within the three communities comprising the subject.

Permits and Fees
Based on information provided by the developer, permits and fees due at building permit average $75,650 per lot. This figure is generally consistent with fees at other projects in the area. Additionally, there is an estimated $16,184,260 or $53,063 per lot in bond proceeds will be used to finance impact fees. The calculation of the subject’s net permits and fees are shown in the following table.

Permits and Fees due at Building Permit
Gross Permits and Fees $75,650 per unit
L ess: Bond Proceeds ($53,063) per unit
Net Permits and Fees $22 ,587 per uni t
Rd. $22,600 per unit

Site Development Costs
Site development is substantially completed at the subject property. However, there are still some remaining items related to grading, street improvements, dry utilities, walls, and common areas. The remaining site development costs are estimated at $6,215,155, which will be accounted for in the Market Value by Ownership section.

Conclusion of Site Analysis
Overall, the physical characteristics of the site and the availability of utilities result in functional utility suitable for a variety of uses including those permitted by zoning. Uses permitted by zoning include residential uses. We are not aware of any other particular restrictions on development.

Land Description and Analysis 32
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Site Plan

Land Description and Analysis 33
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Parcel Map

Land Description and Analysis 34
City of Menifee CFD No. 2023-1 (Rockport Ranch)

Land Description and Analysis 35
City of Menifee CFD No. 2023-1 (Rockport Ranch)

Land Description and Analysis 36
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Aerial
*Source: Google Maps, Boundaries are approximate and aerial does not show the current development status of the subject.

Newport Road
Proposed Improvements Description 37
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Proposed Improvements Description
Overview
The subject property is being developed by Lennar and details of the communities are presented in the following table.

Floor Plan Summary
Floor Plan
Li vi ng
Area (SF) Bedroom Bathroom Stories Garage
Typi cal Lot
Size (SF)
Developer's Base
Price Comments
Residence One 1,860 3 2.5 Two 2-Car 3,600 $559,545
Residence Two 1,987 3 2.5 Two 2-Car 3,600 $582,335
Residence Three 2,207 4 3.0 Two 2-Car 3,600 $604,945
Residence Four 2,228 5 3.0 Two 2-Car 3,600 $583,520
Residence One 1,772 3 2.0 One 2-Car 6,000 $593,185
Residence Two 2,443 4 3.0 Two 2-Car 6,000 $633,065
Residence Three 2,623 4 3.0 Two 2-Car 6,000 $655,910
Residence One 1,950 3 2.0 One 2-Car 6,500 $611,270
Residence Two 2,760 4 3.5 One 2-Car 6,500 $700,750
Residence Three 2,876 4 2.5 One 2-Car 6,500 $714,780
Residence Four 3,157 5 3.5 Two 2-Car w/storage 6,500 $769,140 Next Gen Suite Residence Five 4,134 7 4.5 Two 3-Car 6,500 $885,850 Next Gen Suite West Shore at Rockport Ranch
North Shore at Rockport Ranch
South Shore at Rockport Ranch

The interior finish profile is considered to be of a typical quality for the area with generally average to good overall quality. Note there are inconsistencies in the base prices; however, it is estimated there are possibly options/upgrades included in the base prices. Some of the floor plans offer a multigenerational suite, which has become very common over the past several years. The separate suite can be rented out to offset some of the mortgage or have a separate living space for another generation of the household. The Developer estimates that dues will be approximately $205 per home per month, to be paid by the future homeowners. The subject’s floor plans can be seen on the developer’s website.

Proposed Improvements Description 38
City of Menifee CFD No. 2023-1 (Rockport Ranch)

Proposed Improvements Description 39
City of Menifee CFD No. 2023-1 (Rockport Ranch)

Proposed Improvements Description 40
City of Menifee CFD No. 2023-1 (Rockport Ranch)

Proposed Improvements Description 41
City of Menifee CFD No. 2023-1 (Rockport Ranch)

Real Estate Taxes 42
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Real Estate Taxes
The property tax system in California was amended in 1978 by Article XIII to the State Constitution, commonly referred to as Proposition 13. It provides for a limitation on property taxes and for a procedure to establish the current taxable value of real property by reference to a base year value, which is then modified annually to reflect inflation (if any). Annual increases cannot exceed 2% per year.

The base year was set at 1975-76 or any year thereafter in which the property is substantially improved or changes ownership. When either of these two conditions occurs, the property is to be re- appraised at market value, which becomes the new base year assessed value. Proposition 13 also limits the maximum tax rate to 1% of the value of the property, exclusive of bonds and direct charges.

Bonded indebtedness approved prior to 1978, and any bonds subsequently approved by a two-thirds vote of the district in which the property is located, can be added to the 1% tax rate.

Ad Valorem Taxes
The existing ad valorem taxes are of nominal consequence in this appraisal, primarily due to the fact these taxes will be adjusted substantially as the remaining property improvements are completed and in consideration of the definition of market value employed in this appraisal, which assumes a sale of the appraised properties. According to the Riverside County Treasurer-Tax Collector’s Office, the subject has a tax rate of 1.159060% for tax year 2023-2024 (latest available), based on assessed value.

In addition, the appraised properties are subject to direct charges. Based on information provided by the special tax consultant, it is estimated the subject would have direct charges of approximately $923 per lot.

Special Assessments
All of the appraised properties are encumbered by the Special Tax Lien of City of Menifee CFD No. 2023-1 (Rockport Ranch) that also increases 2% per year. The subject communities are separated into two tax zones, which West Shore at Rockport Ranch is located within Tax Zone 1 and North and South Shore at Rockport Ranch are located within Tax Zone 2. With respect to special taxes, the annual special tax levy on the appraised properties are as follows for tax year 2024-2025:

Real Estate Taxes 43
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Special Tax Table (Fiscal Year 2024-2025)
Land Use Category Square Footage Category
Tax Zone 1
Single -Fam ily Re side ntial Prope rty L e ss than 1,900 SF $2,647 pe r unit Single -Fam ily Re side ntial Prope rty 1,900 - 2,050 SF $2,719 pe r unit Single -Fam ily Re side ntial Prope rty 2,051 - 2,200 SF $2,763 pe r unit Single -Fam ily Re side ntial Prope rty Gre ate r than 2,200 SF $2,807 pe r unit Multifam ily Prope rty N /A $36,276 pe r acre
Non-Residential Property N/A $36,276 per acre
Tax Zone 2
Single -Fam ily Re side ntial Prope rty L e ss than 1,900 SF $2,798 pe r unit Single -Fam ily Re side ntial Prope rty 1,900 - 2,100 SF $2,978 pe r unit Single -Fam ily Re side ntial Prope rty 2,101 - 2,300 SF $3,068 pe r unit Single -Fam ily Re side ntial Prope rty 2,301 - 2,500 SF $3,157 pe r unit Single -Fam ily Re side ntial Prope rty 2,501 - 2,700 SF $3,260 pe r unit Single -Fam ily Re side ntial Prope rty 2,701 - 2,900 SF $3,471 pe r unit Single -Fam ily Re side ntial Prope rty 2,901 - 3,100 SF $3,630 pe r unit Single -Fam ily Re side ntial Prope rty 3,101 - 3,300 SF $3,788 pe r unit Single -Fam ily Re side ntial Prope rty 3,301 - 3,500 SF $4,057 pe r unit Single -Fam ily Re side ntial Prope rty 3,501 - 3,700 SF $4,326 pe r unit Single -Fam ily Re side ntial Prope rty 3,701 - 3,900 SF $4,594 pe r unit Single -Fam ily Re side ntial Prope rty Gre ate r than 3,900 SF $4,862 pe r unit Multifam ily Prope rty N /A $26,112 pe r acre
Non-Residential Property N/A $26,112 per acre
Source: Rate and Method of Apportionment of Special Taxes As si gned Speci al Tax

Real Estate Taxes 44
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Tax Zones

Highest and Best Use 45
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Highest and Best Use
Process
Before a property can be valued, an opinion of highest and best use must be developed for the subject site, both as if vacant, and as improved or proposed. By definition, the highest and best use must be:
 Legally permissible under the zoning regulations and other restrictions that apply to the site.  Physically possible.
 Financially feasible.
 Maximally productive, i.e., capable of producing the highest value from among the permissible, possible, and financially feasible uses.

Highest and Best Use As If Vacant
Legally Permissible
The site is zoned Rockport Ranch SP - MHDR and MDR, Rockport Ranch Specific Plan - Courtyard Residential and Single-Family Residential. Permitted uses are limited to residential. To our knowledge, there are no legal restrictions such as easements or deed restrictions that would effectively limit the use of the property. The subject property has an approved final map for 305 single-family homes on individual lots and associated improvements. The subject's present entitlements are the result of significant planning and review, and any rezone or land use different than currently approved is unlikely. Given prevailing land use patterns in the area, only residential use is given further consideration in determining the highest and best use of the site, as though vacant.

Physically Possible
The physical characteristics of a site that affect its possible use include, but are not limited to, location, street frontage, visibility, access, size, shape, topography, availability of utilities, offsite improvements, easements and soil and subsoil conditions. The legally permissible test has resulted in single-family residential development; at this point the physical characteristics are examined to see if they are suited for the legally permissible use.

Based on our physical inspection of the subject property, we know of no reason why the property would not support development. All utilities are available, and the property is not located within an adverse earthquake, flood, or fire zone. As noted, there is a man-made lake and pond at the project to mitigate the risk of flood across all three communities and it is anticipated that all of the lots and homes will be located in FEMA Zone X once completed. Further, the subject is proximate to new development and development appears possible. Surrounding land uses are compatible and/or similar. Development on adjacent properties provides support that soils are adequate for development. Based on the physical characteristics of the subject property, residential development is considered physically possible and most appropriate
Financially Feasible
Financial feasibility depends on supply and demand influences. With respect to financial feasibility of single-family residential development, in recent months merchant builders have acquired unimproved Highest and Best Use 46
City of Menifee CFD No. 2023-1 (Rockport Ranch)
lots for near term construction, and there are multiple active projects in the area that demonstrate demand for new homes. Finished lots are transferring for prices that exceed the sum of unimproved lots and site development costs, which reflects completion of site development is financially feasible.

Maximally Productive
Legal, physical, and market conditions have been analyzed to evaluate the highest and best use of the appraised properties as vacant. The analysis is presented to evaluate the type of use(s) that will generate the greatest level of future benefits possible to the property. Based on the factors previously discussed, the maximally productive use of the appraised properties, and their highest and best use as vacant, is for near-term single-family residential development.

As Improved (Proposed)
As with the highest and best use as though vacant, the four tests of highest and best use must also be applied to the subject property considering the in-place improvements. Consideration must be given to the continued as-is use of the subject, as well as alternative uses for the subject. The potential alternative uses consist of demolition, expansion, conversion or renovation.

In the case of land under development, consideration must be given to whether it makes sense to demolish existing improvements (either on-site or off-site improvements) for replacement with another use. The time and expense to demolish existing improvements, re-grade, reroute utilities or re-map must be weighed against alternative uses. If the existing or proposed improvements are not performing well, then it may produce a higher return to demolish existing improvements, if any, and re-grade the site for development of an alternative use.

Based on the current condition, the improvements completed contribute to the overall property value. The value of the subject property as improved exceeds its value as vacant less demolition. The highest and best use of the subject property as improved is for continuing construction of homes, as dictated by demand.

Most Probable Buyer
In conjunction with the definition of market value, this appraisal assumes a hypothetical sale of the subject properties to a probable buyer/user, as of the date of value. The subject is considered to have good appeal for production homes. The most probable buyer would be a homebuilder for the partially-improved lots and homes under construction. The most probable buyer for the completed homes would be an individual homeowner.

Valuation Methodology 47
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Valuation
Valuation Methodology
Appraisers usually consider three approaches to estimating the market value of real property. These are the cost approach, sales comparison approach and the income capitalization approach.

The cost approach assumes that the informed purchaser would pay no more than the cost of producing a substitute property with the same utility. This approach is particularly applicable when the improvements being appraised are relatively new and represent the highest and best use of the land or when the property has unique or specialized improvements for which there is little or no sales data from comparable properties.

The sales comparison approach assumes that an informed purchaser would pay no more for a property than the cost of acquiring another existing property with the same utility. This approach is especially appropriate when an active market provides sufficient reliable data. The sales comparison approach is less reliable in an inactive market or when estimating the value of properties for which no directly comparable sales data is available. The sales comparison approach is often relied upon for owner-user properties.

The income capitalization approach reflects the market’s perception of a relationship between a property’s potential income and its market value. This approach converts the anticipated net income from ownership of a property into a value indication through capitalization. The primary methods are direct capitalization and discounted cash flow analysis, with one or both methods applied, as appropriate. This approach is widely used in appraising income-producing properties.

Additional analyses often undertaken in the valuation of subdivisions include extraction, land residual analysis, and the subdivision development method.

Reconciliation of the various indications into a conclusion of value is based on an evaluation of the quantity and quality of available data in each approach and the applicability of each approach to the property type.

The methodology employed in this assignment is summarized as follows:

Approaches to Value
Approach Appl i cabi l i ty to Subject Us e i n As s i gnment Cos t Approach Not Appl i cabl e Not Uti l i zed
Sales Comparison A pproach A pplicable Utilized
Income Capitalization Approach Not Applicable Not Utilized

Market Valuation – Floor Plans 48
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Market Valuation – Floor Plans
The market value of the subject’s smallest floor plans within each community with a completed home, North, South, and West Shore at Rockport Ranch, are estimated in this section. The objective of the analysis is to estimate the base price, net of incentives, upgrades and lot premiums. Incentives can take the form of direct price reductions or non-price incentives such as upgrades, interest rate buydowns, or non-recurring closing costs. The sales comparison approach to value is employed in order to provide an opinion of market value for smallest floor plan offered in the communities.

This approach is based on the economic principle of substitution. According to The Appraisal of Real Estate, 15th Edition (Chicago: Appraisal Institute, 2020), “The principle of substitution holds that the value of property tends to be set by the cost of acquiring a substitute or alternative property of similar utility and desirability within a reasonable amount of time.” The sales comparison approach is applicable when there are sufficient recent, reliable transactions to indicate value patterns or trends in the market.

The proper application of this approach requires obtaining recent sales data for comparison with the appraised properties. In order to assemble the comparable sales, we searched public records and other data sources for leads, then confirmed the raw data obtained with parties directly related to the transactions (primarily brokers, buyers and sellers). Attempts were made to obtain comparable sales from surrounding communities; however, not every attempt was returned. Further, we searched the Multiple Listing Service (MLS) for resales of comparable properties. The comparables utilized in the following analysis are from sales within the subject’s active communities and sales from surrounding communities.

For the homes with various options of the number of bedrooms or bathrooms, consistent with the “not-less-than” valuation, we will utilize the lesser of the two options. The base prices within the subject communities have increased significantly since the beginning of 2024; however, the level of incentives has also increased over this same time period. Given most homebuilders are buying down interest rates and/or offsetting closing costs, homebuilders are able to increase their base prices, while not affecting the pace of absorption or profits. The floor plans within the communities are shown in the following table.

Market Valuation – Floor Plans 49
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Floor Plan Summary
Floor Plan
Li vi ng
Area (SF) Bedroom Bathroom Stories Garage
Typi cal Lot
Size (SF)
Developer's Base
Price Comments
Residence One 1,860 3 2.5 Two 2-Car 3,600 $559,545
Residence Two 1,987 3 2.5 Two 2-Car 3,600 $582,335
Residence Three 2,207 4 3.0 Two 2-Car 3,600 $604,945
Residence Four 2,228 5 3.0 Two 2-Car 3,600 $583,520
Residence One 1,772 3 2.0 One 2-Car 6,000 $593,185
Residence Two 2,443 4 3.0 Two 2-Car 6,000 $633,065
Residence Three 2,623 4 3.0 Two 2-Car 6,000 $655,910
Residence One 1,950 3 2.0 One 2-Car 6,500 $611,270
Residence Two 2,760 4 3.5 One 2-Car 6,500 $700,750
Residence Three 2,876 4 2.5 One 2-Car 6,500 $714,780
Residence Four 3,157 5 3.5 Two 2-Car w/storage 6,500 $769,140 Next Gen Suite Residence Five 4,134 7 4.5 Two 3-Car 6,500 $885,850 Next Gen Suite West Shore at Rockport Ranch
North Shore at Rockport Ranch
South Shore at Rockport Ranch

The comparable sales are summarized in the following table.

Comparable Home Sale Summary
No. Address City
Contract
Date Sale Price
Close of
Escrow
Li vi ng Area
(SF) Bedroom Bathroom Garage Year Built
Lot Si ze
(SF)
1 30241 Adrift Lane Menifee 8/4/2024 $559,990 Pending 1,860 3 2.5 2-Car 2024 3,305 2 30241 Adrift Lane Menifee 7/17/2024 $551,216 Pending 1,860 3 2.5 2-Car 2024 3,305 3 29571 Grizzly Ct Winchester 5/19/2024 $498,706 Pending 1,882 3 2.5 2-Car 2024 3,000 4 29370 Novi Way Winchester 5/18/2024 $518,017 Pending 1,882 3 2.5 2-Car 2024 3,000 5 30421 Adrift Lane Menifee 6/9/2024 $567,075 Pending 1,772 3 2.0 2-Car 2024 8,892 6 30379 Adrift Lane Menifee 5/27/2024 $576,224 7/25/2024 1,772 3 2.0 2-Car 2024 6,024 7 30475 Adrift Lane Menifee 5/25/2024 $554,245 9/3/2024 1,772 3 2.0 2-Car 2024 6,686 8 30417 Waterline Drive Menifee 3/23/2024 $623,730 8/2/2024 1,950 3 2.0 2-Car 2024 7,062 9 25344 Picket Range Way Menifee 8/8/2024 $615,675 9/4/2024 2,024 3 2.0 2-Car 2024 5,901

Market Valuation – Floor Plans 50
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Discussion of Adjustments
The sales are compared to the subject and adjusted to account for material differences that affect value. Adjustments are considered for the following factors, in the sequence shown below.

Adjustment Factor Accounts For Comments
Special Taxes Bond debt has a direct impact on
the amount for which the end
product will sell. In an effort to
account for the impact of bond
indebtedness on the sales price, we
establish a present value amount
for the difference in the bond
encumbrance between the subject
and comparables based on the
annual assessment, and the
estimated average holding period of
a single-family home, which is
estimated at 12 years.

The subject and all of the
comparables have a bond
encumbrance and are adjusted
accordingly.

Upgrades and
Incentives
The objective of the analysis is to
estimate the base value per floor
plan, net of incentives. Incentives
can take the form of direct price
reductions or non-price incentives
such as upgrades or non-recurring
closing costs.

Incentives and upgrades included in
the sales have been considered and
adjusted for in this analysis.

Real Property Rights Fee simple, leased fee, leasehold, partial interest, etc.

All the comparables represent fee
simple estate transactions.

Therefore, adjustments for property
rights are not necessary.

Financing Terms Seller financing, or assumption of
existing financing, at non-market
terms.

The comparable sales were cash to
the seller transactions and do not
require adjustments.

Conditions of Sale Extraordinary motivation of buyer
or seller, assemblage, forced sale.

The comparables did not involve
any non-market or atypical
conditions of sale. Adjustments for
this factor do not apply.

Market Conditions
(Date of Sale, Phase
Adjustment)
The market conditions vary over
time, but the date of this appraisal
is for a specific point in time. In a
dynamic economy – one that is
undergoing changes in the value of
the dollar, interest rates and
economic growth or decline – extra
As demonstrated in the previous
market analysis section, new home
pricing has been fluctuating over
the past twelve months in the
subject’s market area, as well as
within the region overall.

Comparable 8 went under contract
Market Valuation – Floor Plans 51
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Adjustment Factor Accounts For Comments
attention needs to be paid to assess
changing market conditions.

Significant monthly changes in price
levels can occur in several areas of a
neighborhood, while prices in other
areas remain relatively stable.

Although the adjustment for market
conditions is often referred to as a
time adjustment, time is not the
cause of the adjustment.
in March of 2024 and market
conditions since improved.

Therefore, this comparable
warrants a slight upward
adjustment. All of the remaining
comparables went under contract
within the last several months and
do no warrant an adjustment for
market conditions.

Location Location is a very important factor
to consider when making
comparisons. The comparables
need not be in the same
neighborhood but should be in
neighborhoods that offer the same
advantage and have, in general, the
same overall desirability to the
most probable buyer or user.

The subject is located within the city
of Menifee. Comparables 9 and 10
are located in an inferior location of
Menifee and warrant an upward
adjustment. The remaining
comparables are considered to be in
similar locations do not warrant an
adjustment for location.

Community Appeal Community characteristics that may
influence sale prices include a gated
amenity or the condition of
surrounding development.

The subject communities have
superior amenities compared to
most neighborhoods in the region.

Comparables located outside of the
subject communities are considered
to have inferior community appeal
and warrant an upward adjustment.

Lot Size The lot size adjustment pertains to
the differences between the
subject’s average lot size and
comparables with either larger or
smaller lots. It does not include any
lot premium adjustments, which are
adjusted for separately. The
amount of the adjustment used in
the comparison of the base lot sizes
comes from a survey of premiums
paid for larger lots.

Considering the average lot size
adjustment factors indicated by the
comparable sales utilized in this
analysis, a lot size adjustment of
$10.00 /SF is considered reasonable
for the subject’s residential lots.

This figure is supported by
observations of sales in the
subject’s market area.

Lot Premiums/
Discounts
Properties sometimes achieve
premiums for corner or cul-de-sac
positioning, or proximity to open
space or views. Adjustments for lot
position premiums would be in
Appropriate adjustments are
applied based upon lot placement
and configuration within their
respective projects.

Market Valuation – Floor Plans 52
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Adjustment Factor Accounts For Comments
addition to lot size adjustments
previously considered.

Design and Appeal Design and appeal of a floor plan is
consumer specific. One exterior
may appeal to one buyer, while
another appeals to a different
buyer. These types of features for
new homes with similar functional
utility are not typically noted in the
base sales prices.

All of the comparables are similar to
the subject in regard to design and
appeal.

Quality of
Construction
Construction quality can differ from
slightly to substantially between
projects and is noted in the exterior
and interior materials and design
features of a standard unit. In terms
of quality of construction, the
subject represents good
construction quality.

All of the comparable sales feature
similar construction quality and do
not require adjustments.

Age/Condition When comparing resale to resale,
the market generally reflects a
difference of 1% per year of
difference in effective age.

All of the comparable sales
represent new construction; thus,
no adjustments are required.

Functional Utility
Ability to adequately provide for its
intended purpose.

The appraised properties and
comparables represent traditional
detached single-family residential as
well as cluster configurated lots and
are construction on similar lot size
categories as the subject.

Adjustments for this factor do not
apply.

Room Count For similar size units the differences
between room count is a buyer
preference. One buyer might prefer
two bedrooms and a den versus a
three-bedroom unit. Extra rooms
typically result in additional building
area and are accounted for in the
size adjustment. Therefore, no
adjustments are made for number
of total rooms or bedrooms.

Because bathrooms are a functional
item for each floor plan and add
substantial cost due to the number
of plumbing fixtures, an adjustment
is made for the difference in the
number of fixtures between the
subject and the comparable sales.

The adjustment is based on an
amount of $7,500 per fixture (or
half-bath) and is supported by cost
estimates for an average quality
home in the Residential Cost
Market Valuation – Floor Plans 53
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Adjustment Factor Accounts For Comments
Handbook, published by the
Marshall and Swift Corporation.

Considering the fact that plumbing
upgrades for existing bathrooms
generally range from $5,000 to over
$25,000 for the various fixtures, the
$7,500 per fixture, or half-bath, is
supported. Consequently, a factor
of $15,000 per full bath is also
applied in our analysis. The subject
and all of the comparables had a
similar bath count and no
adjustments were warranted.

Unit Size/Living Area Units similar (in the same
development), except for size, were
compared to derive the applicable
adjustment for unit size. Those used
for comparison purposes, are units
within similar projects. Units within
the same project were used since
they have a high degree of similarity
in quality, workmanship, design and
appeal. Other items such as a single
level or two-story designs, number
of bathrooms and number of garage
spaces were generally similar in
these comparisons, in order to
avoid other influences in price per
square foot. Where differences
exist, they are minor and do not
impact the overall range or average
concluded.

The typical range indicated by the
paired units in this analysis
generally demonstrated a value
range from approximately $50 to
upwards of $100 per square foot.

Considering the information cited
above, a factor of $85.00 per
square foot is concluded to be
appropriate and reasonable for the
difference in living area between
the subject and the comparables,
given the quality of the product.

Number of Stories For similar size units, the
differences between the number of
stories is typically a buyer
preference. One buyer might prefer
a single-story versus a two-story
unit.

In current market conditions, single
story floor plans typically demand a
slight premium; as such, an
adjustment of 1% is applied for
story differences. The subject and
all of the comparables have a
similar number of stories and do not
warrant an adjustment.

Market Valuation – Floor Plans 54
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Adjustment Factor Accounts For Comments
Parking/Garage Number of garage spaces The subject’s floor plans offer two- car garages. Our survey of local real
estate professionals indicates a
premium value of approximately
$15,000 for a full garage space and
approximately half, or $7,500, for
tandem garage spaces. The subject
and all of the comparables have a
similar number of parking/garage
spaces and do not warrant an
adjustment.

Landscaping Included landscaping The subject and all of the comparables include only front yard
landscaping. Therefore, no
adjustments are warranted for
landscaping.

Adjustment Grids
The following pages include grids reflecting the aforementioned adjustments.

Market Valuation – Floor Plans 55
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Residence One - West Shore at Rockport Ranch
Project Information Subject Property
Project Name West Shore at Rockport Ranch West Shore West Shore Opal Skye Opal Skye Pl an Resi dence One Resi dence One Resi dence One Pl an 5 Pl an 5 Address/Lot Number 30241 Adrift Lane 30241 Adrift Lane 29571 Grizzly Ct 29370 Novi Way Ci ty/Area Meni fee Meni fee Meni fee Wi nchester Wi nchester Price N/Ap $559,990 $551,216 $498,706 $518,017
Price Per SF N/Ap $301.07 $296.35 $264.99 $275.25
Special Taxes (12-year hold at 5.5%) $22,813 $22,813 $22,813 $19,165 $19,165 Adjustment $0 $0 -$3,649 -$3,649
Adjusted Price (Including Bonds) $559,990 $551,216 $495,057 $514,368 Total Consideration per SF $301.07 $296.35 $263.05 $273.31 Data Source Project sales agent Project sales agent Project sales agent Project sales agent Incentives N/Ap Yes ($21,428) Yes ($13,196) Yes ($16,500) Yes ($15,000) Upgrades Base No $0 Yes ($6,771) Yes ($16,206) Yes ($24,517) Effective Base Sales Price $538,562 $531,249 $462,351 $474,851 Adjustments: Factor Description +/(-) Description +/(-) Description +/(-) Description +/(-) Prope rty Rights Fe e Simple Similar Similar Similar Similar Financing Te rms Cash E quivale nt Similar Similar Similar Similar Condi ti ons of Sal e Market Market Market Market Market Market Conditions
Contract Date 8/30/2024 8/4/2024 7/17/2024 5/19/2024 5/18/2024 Project Locati on Meni fee Meni fee Meni fee Wi nchester Wi nchester Community Appeal Average Similar Similar Inferior $30,000 Inferior $30,000 Lot Size $10.00 3,600 3,305 $2,950 3,305 $2,950 3,000 $6,000 3,000 $6,000 Lot Pre mium N/A p Similar Similar Similar Similar
De sign and A ppe al A ve rage Similar Similar Similar Similar Quality of Construction Good Similar Similar Similar Similar A ge (Total/Effe ctive ) Ne w Similar Similar Similar Similar Condition Good/N e w Similar Similar Similar Similar
Functional U tility A ve rage Similar Similar Similar Similar Room Count
B e d r o o m s 3 3333
Baths $15,000 2.5 2.5 $0 2.5 $0 2.5 $0 2.5 $0
Living Area (SF) $85.00 1,860 1,860 $0 1,860 $0 1,882 ($1,870) 1,882 ($1,870) Number of Stories Two Two Two Two Two
He ating/Cooling Ce ntral/Force d Similar Similar Similar Similar Garage $15,000 2-Car 2-Car 2-Car 2-Car 2-Car
Landscaping Front Similar Similar Similar Similar
Pool/Spa None Similar Similar Similar Similar
Patios/De cks Patio Similar Similar Similar Similar
Fe ncing Re ar Similar Similar Similar Similar
Kitche n Equipme nt A ve rage Similar Similar Similar Similar Othe r None Similar Similar Similar Similar
Gross A djustments $2,950 $2,950 $37,870 $37,870
Net Adjustments $2,950 $2,950 $34,130 $34,130
Adjusted Retail Value $541,512 $534,199 $496,481 $508,981 Concluded Retail Value $515,000
Indicated Value Per SF $276.88
Comparable 1 Comparable 2 Comparable 3 Comparable 4

Adjustments were necessary to account for differences between these homes and the subject’s floor plan. The sales provide a range of indicators of $496,481 to $541,512 . All of the comparables are considered to be good indicators of value as they have all the same lot configuration. As noted, the base prices for the subject’s floor plans have increased significantly since the beginning of 2024 along with the level of concessions. Therefore, we have tempered the most recent sales of the subject’s floor plans with the other comparables. We have concluded an estimate of value of $515,000 for Residence One at West Shore at Rockport Ranch.

Market Valuation – Floor Plans 56
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Residence One - North Shore at Rockport Ranch
Project Information Subject Propert y
Project Name North Shore at Rockport Ranch North Shore North Shore North Shore South Shore Greenway at Cimarron Ridge Pl an Resi dence One Resi dence One Resi dence One Resi dence One Res i dence One Gateway Address/Lot Number 30421 Adrift Lane 30379 Adrift Lane 30475 Adrift Lane 30417 Waterline Drive 25344 Picket Range Way Ci ty/Area Meni fee Meni fee Meni fee Meni fee Meni fee Meni fee Price N/Ap $567,075 $576,224 $554,245 $623,730 $615,675 Price Per SF N/Ap $320.02 $325.18 $312.78 $319.86 $304.19 Special Taxes (12-year hold at 5.5%) $24,115 $24,115 $24,115 $24,115 $25,666 $7,119 Adjustmen
t $0 $0 $0 $1,551 -$16,996
Adjusted Price (Including Bonds) $567,075 $576,224 $554,245 $625,281 $598,679 Total Consideration per SF $320.02 $325.18 $312.78 $320.66 $295.79 Data Source Proje ct sale s agent Proje ct sale s agent Proje ct sale s agent Proje ct sale s agent Proje ct sale s age nt Incentives N/Ap Yes ($21,265) Yes ($47,891) Yes ($4,390) Yes ($19,472) No $0 Upgrades Base Yes ($6,085) Yes ($22,234) Yes ($255) Yes ($38,740) Yes ($79,896) Effective Base Sales Price $539,725 $506,099 $549,600 $567,069 $518,783 Adjustments: Factor Description +/(-) Description +/(-) Description +/(-) Description +/(-) Description +/(-) Prope rty Rights Fe e Sim ple Similar Similar Similar Similar Similar Financing Terms Cash Equivalent Similar Similar Similar Similar Similar Conditions of Sale Market Market Market Market Market Market Marke t Conditions
Contract Date 8/30/2024 6/9/2024 5/27/2024 5/25/2024 3/23/2024 $11,341 8/8/2024 Proj ect Locati on Meni fee Meni fee Meni fee Meni fee Meni fee Meni fee $10,000 Community Appe al Ave rage Similar Similar Similar Similar Infe rior $20,000 Lot Size $10.00 6,000 8,892 ($28,920) 6,024 ($240) 6,686 ($6,860) 7,062 ($10,620) 5,901 $990 Lot Pre m ium N/Ap Similar Similar Similar Similar Similar De sign and A ppeal Ave rage Similar Similar Similar Similar Similar Quality of Construction Good Similar Similar Similar Similar Similar Age (Total/Effe ctive ) New Similar Similar Similar Similar Similar Condition Good/Ne w Similar Similar Similar Similar Similar Funct ional U t ilit y A ve rage Sim ilar Sim ilar Sim ilar Sim ilar Sim ilar Room Count
B e d r o o m s 3 33333
Baths $15,000 2.0 2.0 $0 2.0 $0 2.0 $0 2.0 $0 2.0 $0
Living Area (SF) $85.00 1,772 1,772 $0 1,772 $0 1,772 $0 1,950 ($15,130) 2,024 ($21,420) Number of Stories One One One One One One
He ating/Cooling Ce ntral/Force d Similar Similar Similar Similar Similar Garage $15,000 2-Car 2-Car 2-Car 2-Car 2-Car 2-Car
Landscaping Front Similar Similar Similar Similar Similar Pool/Spa None Similar Similar Similar Similar Similar
Patios/De cks Patio Similar Similar Similar Similar Similar Fencing Re ar Similar Similar Similar Similar Similar
Kitchen Equipm ent Ave rage Similar Similar Similar Similar Similar Othe r None Similar Similar Similar Similar Similar
Gross Adjustments $28,920 $240 $6,860 $37,091 $52,410
Net Adjustments ($28,920) ($240) ($6,860) ($14,409) $9,570 Adjusted Retail Value $510,805 $505,859 $542,740 $552,661 $528,353 Concluded Retail Value $530,000
Indicated Value Per SF $299.10
Comparable 5 Comparable 6 Comparable 7 Comparable 8 Comparable 9

Adjustments were necessary to account for differences between these homes and the subject’s floor plan. The sales provide a range of indicators of $505,859 to $552,661 . As previously stated, the subject has increased their base prices significantly along with their concessions, which has lead to some inconsistencies in the comparables. For example, Comparables 6 and 7 are the same floor plan as the subject that went under contract close to the same time and differ significantly. Therefore, to arrive an estimate of value, we gave equal emphasis to all of the comparables in the data set despite some having a larger amount of gross adjustments. We have concluded an estimate of value of $530,000 for Residence One at North Shore at Rockport Ranch.

Market Valuation – Floor Plans 57
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Residence One - South Shore at Rockport Ranch
Project Information Subject Property
Project Name South Shore at Rockport Ranch North Shore North Shore North Shore South Shore Greenway at Cimarron Ridge Pl an Resi dence One Resi dence One Residence One Resi dence One Resi dence One Gateway Address/Lot Number 30421 Adrift Lane 30379 Adrift Lane 30475 Adrift Lane 30417 Waterline Drive 25344 Picket Range Way Ci ty/Area Menifee Meni fee Menifee Meni fee Meni fee Menifee Price N/Ap $567,075 $576,224 $554,245 $623,730 $615,675 Price Per SF N/Ap $320.02 $325.18 $312.78 $319.86 $304.19 Special Taxes (12-year hold at 5.5%) $25,666 $24,115 $24,115 $24,115 $25,666 $7,119 Adjustment -$1,551 -$1,551 -$1,551 $0 -$18,547
Adjusted Price (Including Bonds) $565,524 $574,673 $552,694 $623,730 $597,128 Total Consideration per SF $319.14 $324.31 $311.90 $319.86 $295.02 Dat a Source Proje ct sales agent Project sale s age nt Proje ct sale s age nt Proje ct sales agent Project sale s age nt Incentives N/Ap Yes ($21,265) Yes ($47,891) Yes ($4,390) Yes ($19,472) No $0 Upgrades Base Yes ($6,085) Yes ($22,234) Yes ($255) Yes ($38,740) Yes ($79,896) Effective Base Sales Price $538,174 $504,548 $548,049 $565,518 $517,232 Adjustments: Factor Description +/(-) Description +/(-) Description +/(-) Description +/(-) Description +/(-) Prope rty Rights Fe e Sim ple Similar Sim ilar Sim ilar Similar Sim ilar Financing T e rm s Cash Equivale nt Similar Sim ilar Sim ilar Similar Sim ilar Conditions of Sale Market Market Market Market Market Market Market Conditions
Contract Date 8/30/2024 6/9/2024 5/27/2024 5/25/2024 3/23/2024 $11,310 8/8/2024 Project Location Menifee Menifee Menifee Menifee Menifee Menifee $10,000 Community Appeal Average Similar Similar Similar Similar Inferior $20,000 Lot Size $10.00 6,500 8,892 ($23,920) 6,024 $4,760 6,686 ($1,860) 7,062 ($5,620) 5,901 $5,990 Lot Pre mium N/A p Similar Similar Similar Similar Similar De sign and A ppe al A ve rage Similar Similar Similar Similar Similar Qualit y of Const ruction Good Similar Sim ilar Sim ilar Similar Sim ilar A ge (Total/Effe ctive ) Ne w Similar Similar Similar Similar Similar Condition Good/N e w Similar Sim ilar Sim ilar Similar Sim ilar Functional U tility A ve rage Similar Sim ilar Sim ilar Similar Sim ilar Room Count
B e d r o o m s 3 33333
Baths $15,000 2.0 2.0 $0 2.0 $0 2.0 $0 2.0 $0 2.0 $0
Living Area (SF) $85.00 1,950 1,772 $15,130 1,772 $15,130 1,772 $15,130 1,950 $0 2,024 ($6,290) Number of Stories One One One One One One
He ating/Cooling Central/Force d Similar Similar Similar Similar Similar Garage $15,000 2-Car 2-Car 2-Car 2-Car 2-Car 2-Car
Landscaping Front Similar Similar Similar Similar Similar Pool/Spa None Similar Sim ilar Sim ilar Similar Sim ilar Patios/De cks Patio Similar Similar Similar Similar Similar Fe ncing Rear Similar Similar Similar Similar Similar
Kitchen Equipment Average Similar Similar Similar Similar Similar Othe r None Similar Sim ilar Sim ilar Similar Sim ilar
Gross A djust me nts $39,050 $19,890 $16,990 $16,930 $42,280 Net Adjustments ($8,790) $19,890 $13,270 $5,690 $29,700 Adjusted Retail Value $529,384 $524,438 $561,319 $571,208 $546,932 Concluded Retail Value $550,000
Indicated Value Per SF $282.05
Comparable 5 Comparable 6 Comparable 7 Comparable 8 Comparable 9

Adjustments were necessary to account for differences between these homes and the subject’s floor plan. The sales provide a range of indicators of $524,438 to $571,208 . Comparable 8 is considered to be the most similar comparable and given the greatest emphasis. However, again due to the inconsistencies in the data, we temper this indication with the balance of the data set. We have concluded an estimate of value of $550,000 for Residence One at South Shore at Rockport Ranch.

Market Valuation – Floor Plans 58
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Conclusion of Home Values
Based on the analysis herein, the market value conclusions for the homes are summarized in the following table.

Floor Plan Value Conclusions
Floor Plan Floor Plan
Li vi ng
Area (SF) Bedroom Bathroom Stories Garage
Typical Lot
Size (SF)
Concluded Base
Retail Value
West Shore at Rockport Ranch Residence One 1,860 3 2.5 Two 2-Car 3,600 $515,000 North Shore at Rockport Ranch Resi dence One 1,772 3 2.0 One 2-Car 6,000 $530,000 South Shore at Rockport Ranch Residence One 1,950 3 2.0 One 2-Car 6,500 $550,000

Residential Lot Valuation 59
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Residential Lot Valuation
For the purpose of estimating the value of the subject’s lots, we have identified the benchmark lot categories of North and West Shore at Rockport Ranch. Following the conclusion of value for the benchmark lots we will address the differences between the benchmark lot categories compared to the remaining lot categories comprising the subject property. The following table presents all of the subject lots.

We will utilize the sales comparison approach and a land residual analysis to estimate the market value of a finished lot. For purposes of this analysis, two benchmark lot categories will be utilized:

North Shore (6,000 square feet) and West Shore (3,600 square feet). The estimate of value assumes the lots would sell on a bulk, or wholesale, basis. That is, a group of lots would transfer in one transaction to a single buyer.

Later in this report, we apply a lot size adjustment factor to account for differing lot sizes within the subject. Remaining development costs applicable to the subject property are accounted for in the Market Value by Ownership section.

Sales Comparison Approach
In this section of the report, we will utilize the sales comparison approach to estimate the market value of the subject lots. This value estimate assumes the subject property would sell on a bulk, or wholesale, basis. That is, it would transfer in one transaction to a single buyer. This approach develops an indication of value by researching, verifying, and analyzing sales of similar properties. Our sales research focused on transactions within the following parameters:
 Location: Menifee and surrounding areas
 Typical Lot Size: 2,000 to 8,000 square feet
 Number of Lots: 40 to 250 lots
 Transaction Date: 2021 or later
The bulk lot sales are analyzed on a loaded lot basis. Loaded lot is the equivalent of underlying land, any remaining site development costs and all fees paid through the building permit for home construction. The most relevant sales are summarized in the following table:

Residential Lot Valuation 60
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Summary of Comparable Land Sales - North Shore at Rockport Ranch No. Name/Address
Sale Date;
Status
Sale Price ; Bond
Conside ration/L ot
Typi cal Lot
Si ze Number of Lots $/Lot
Expenditures After
Purchase
1 ES Leon Rd., SO Domenigoni Pkwy. Jan-24 $21,000,000 7,200 182 $115,385 $141,209 Winchester In-Contract $4,000
Riverside County
2 Stratford Place II - East Oct-23 $13,186,466 6,000 107 $123,238 $104,762 Evans Rd. Closed $6,000
Perris
Riverside County
3 Green Valley Ranch PA 12 Sep-23 $11,795,535 6,500 191 $61,757 $141,243 Green Valley Pky. Closed $4,000
Perris
Riverside County
4 Stratford Place II Nov-22 $4,906,500 6,000 90 $54,517 $175,483 Evans Rd. Closed $5,966
Perris
Riverside County
5 Windsong Aug-22 $7,500,000 5,000 177 $42,373 $197,345 NWQ Alessandro Blvd. and Darwin Dr. Closed $4,000
Moreno Valley
Riverside County
6 La Ventana Apr-22 $8,000,000 6,000 220 $36,364 $178,636 SEC Simpson Rd and La Ventana Rd Closed $4,000
Winchester
Riverside County
7 Pleasant Valley Ranch Aug-21 $15,728,000 7,250 202 $77,861 $150,861 Linden Flower Rd. Closed $5,376
Winchester
Riverside County
Subject - North Shore at Rockport Ranch 6,000 109
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Menifee, CA
Com me nts: T his is the pe nding sale of 182 final m appe d lots on 84.8 total acre s. The lots will be de live re d in blue -top condit ion. Additional estimated costs for a finished lot total $141,209 per lot. A bond district had not yet been created for the property but was anticipated for the project. Given surrounding projects also ut ilize bond financing, it is estimate the property would have an estimated special tax of $2,000 per lot.

Comments: This is a sale 107 unimproved lots with a typical lot size of 6,000 square feet. The finished lot price is estimated at $225,000 per lot. A building permit is estimated at $3,000 per lot. It is uncle ar if the proje ct w ill utilize bond financing. Howe ve r, give n the surrounding projects also ut ilize bond financing, it is e stim ate d the prope rty would have an e stim ate d spe cial tax of $3,000 per lot.

Comments: This is a sale of 191 unimproved lots with a typical lot size of 6,500 square feet. The finished lot price is estimat ed at $200,000 per lot. A building permit is estimated at $3,000 per lot. It is uncle ar if the proje ct w ill utilize bond financing. Howe ve r, give n the surrounding projects also ut ilize bond financing, it is e stim ate d the prope rty would have an e stim ate d spe cial tax of $2,000 per lot.

Comments: This is a sale of 90 unimproved lots with a tentative map in place and a typical lot size of 6,000 square feet. The l ots were purchased for $4,906,500 or $54,517. According to the broker, the lots were purchased at a finished lot price of $230,000 per lot. The buyer is developing the 270 lots adjacent to the north of this project. It is assumed there was a degree of assemblage influencing a part of the sale , but this was not confirme d. It is e stim at e d this proje ct w ill have a sim ilar de gre e of bond de bt as the adjacent project, which has an estimated $2,983 per lot.

Comments: This sale encompasses two adjacent parcels purchased by D.R. Horton from two different sellers. D.R. Horton closed on the first 18.01-acre parcel for $3,755,000 on August 1, 2022 and closed on the second 17.63-acre parcel for $3,745,000 on August 2, 2022. The site w ill be de ve lope d into a 177-lot s ubdivision called Windsong. Floor plans w ill range from 1,898 to 2,537 square feet and the typical lot size will be approximately 5,000 square feet. Finishing costs are estimated at approximately $197,345 per l ot. It is uncle ar if the proje ct will utilize bond financing. How e ve r, give n surrounding projects also utilize bond financing, it is estimate the property would have an estimated special tax of $2, 000 per lot.

Comments: Site consists of 220 residential lots, along with a park site and a school site. The typical lot size is approximatel y 6,000 SF. The finished lot price was reportedly $215,000/lot. It is unclear if the proje ct w ill utilize bond financing. Howe ve r, give n surrounding projects also utilize bond financing, it is estimate the property would have an estimated special tax of $2, 000 per lot.

Comments: This is a sale of 202 paper lots with a typical lot size of 7,250 square feet for $77,861 per lot. The lots included the sale of five partially completed models that were constructed prior to the Great Recession in 2007. The backstory to the project was not given; however, it appears one of the previous owners of the proj ect tried to develop the property and later abandon it. The prior models on the property were demolished by DR Horton and the site development to improve the lots was estimated at $15,400,862 or $76,2 42 per lot. Permits and fees are estimated at $73,000 per lot, while special taxes are estimated at $2,688 per lot.

Residential Lot Valuation 61
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Summary of Comparable Land Sales - West Shore at Rockport Ranch No. Name/Address
Sale Date;
Status
Sale Price ; Bond
Conside ration/L ot
Typi cal Lot
Size Number of Lots $/Lot
Expenditures
After Purchase
1 Rive rwalk Village Dec-23 $22,077,500 2,500 198 $111,503 $118,735 Bradley Rd. Closed $4,000
Menifee
Riverside County
2 Alessandro Nov-23 $16,143,500 3,600 225 $71,749 $131,516 Alessandro Blvd. Closed $4,000
More no Valle y
Riverside County
3 27550 Brodiaea Avenue Jul-23 $2,800,055 3,000 67 $41,792 $137,877 27550 Brodiaea Ave. Closed $4,000
More no Valle y
Riverside County
4 Towns & Courts Apr-22 $17,500,000 3,000 252 $69,444 $82,556 Domenigoni Pky. Closed $4,000
Winchester
Riverside County
5 SWC Leon Rd & Simpson Rd Feb-22 $8,000,000 2,250 420 $19,048 $132,952 Winchester Closed $4,000
Riverside County
Subject - West Shore at Rockport Ranch 3,600 96
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Menifee, CA
Comments: This is a sale of 198 lots in unimproved condition. The lots are configured in an 8-pack courtyard cluster and have s everal community amenities. Based on the density of the project, the typical lot size is estimated at 2,250 square feet. The finished lot is estimated at $225,338 per lot. A building permit is estimated at $4 ,900 per lot. The project is utilizing special taxes; however, the exact annual payment is unclear. Therefore, based on the surrounding projects an annual special tax is estimated at $2,000 per lot.

Comments: This is a sale of 225 tentatively mapped lots with a typical lot size of 3,000 square feet. The lots w ill be developed into clusters; however, it is unclear the exact layout. The finished lot price is estimated at $201,265 per lot. A building permit is estimated at $2,000 per lot. It is unclear if the project will utilize bond financing. However, given the surrounding projects also ut ilize bond financing, it is estimated the property would have an estimated special tax of $2,000 per lot.

Comments: This is a sale of 67 tentatively mapped lots with a typical lot size of 3,600 square feet. The finished lot price is estimated at $177,669 per lot. A building permit is estimated at $2,000 per lot. It is unclear if the project will utilize bond financing. However, given the surrounding projects also utilize bond financing, it is estimated the property would have an estima ted special tax of $2,000 per lot.

Comments: This is a sale of 252 lots in bluetop condition. The project will be developed as 124 townhomes and 128 cluster lot homes. Based on the density of the project, the typical lot size is estimated at 2,500 square feet. The finished lot is estimated at $150,000 per lot. A building permit is estimated at $2,000 per lot. The pro ject is utilizing special taxes; however, the exact annual payment is unclear.

Therefore, based on the surrounding projects an annual special tax is estimated at $2,000 per lot.

Comments: Property sold with a recorded final map for 420 single family lots. The site also includes two future parks. The estimated lot size is 3,000 square feet. The brokers estimates a finished lot value of $150,000 per lot. A building permit within the unincorporated area of Winchester is estimated at $2,000 per lot. It is unclear if the project will utilize bond financing. However, given the surrounding projects also utilize bond financing, it is estimated the property would have an estimated special tax of $2,000 per lot.

Residential Lot Valuation 62
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Comparable Land Sales Map – North Shore at Rockport Ranch

Residential Lot Valuation 63
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Comparable Land Sales Map – West Shore at Rockport Ranch

Residential Lot Valuation 64
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Loaded Lot Analysis
Prior to the application of adjustments, the following items are added to the per lot sale price.

Loaded Lot Analysis
Remaining Site Dev. Cost We a pply adjustments for remaining site development costs (if any).

Permits and Fees Permits and fees due upon bui lding permit are included on a dollar-for- dollar basis.

Bond Encumbrance If applicable, we consider the annual special tax and typical holding time for a developer (2 years) for each comparable (if bond debt exists).

Adjustment Factors
The sales are compared to the subject and adjusted to account for material differences that affect value. Adjustments are considered for the following factors, in the sequence shown below.

Adjustment Factor Accounts For Comments
Real Property Rights Fee simple, leased fee, leasehold, partial interest, etc.

All the comparables represent fee
simple estate transactions.

Therefore, adjustments for property
rights are not necessary.

Financing Terms Seller financing, or assumption of
existing financing, at non-market
terms.

All of the comparables are all cash
or cash to seller transactions and do
not warrant an adjustment.

Conditions of Sale Extraordinary motivation of buyer
or seller, assemblage, forced sale.

For North Shore at Rockport Ranch,
Comparables 2 and 4 were
influenced by the buyer’s desire to
assemble lots proximate to
properties they developed to the
north; therefore, these comparables
warrant a downward adjustment.

All of the remaining comparables
are market transactions and do not
warrant an adjustment for
conditions of sale.

Market Conditions Changes in the economic
environment over time that affect
the appreciation and depreciation
of real estate.

Home values increased significantly
leading up to the first quarter of
2022, when mortgage interest rates
began a steady increase from
historical lows (below 3%) to over
7%. While some price appreciation
was offset by rising construction
costs (materials) and labor
Residential Lot Valuation 65
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Adjustment Factor Accounts For Comments
shortages during the pandemic,
construction costs have since
moderated. As the inventory of
available new homes continues to
deplete, and demand remains
strong, despite the higher interest
rates, home prices appear to be
stabilizing. Market participants have
noted that current market values
are similar to late First Quarter
2022, which represented the top of
the market with land values
subsequently declining due to the
rising interest rates and other
economic conditions. This appears
to have been short-lived, as recent
market interviews suggest merchant
builders are once again actively in
the market for developable lots to
satisfy increased homebuyer
demand. Comparables that
transferred in 2023 and prior
warrant an upward adjustment.

Several sales were negotiated prior
to the dates of sale. The contract
dates of each sale were accounted
for in this analysis.

Location/Community
Appeal
Market or submarket area
influences on sale price;
surrounding land use influences.

The subject is located in the city of
Menifee. Comparables located in
Perris are considered to be inferior
to the subject and warrant an
upward adjustment.

Number of Lots Generally , there is an inverse
relationship between the number of
lots and price per lot such that
larger projects (with a greater
number of lots) achieve a lower
price per lot.

Typically, variances in per lot prices,
all else being equal, are not
observed in transactions between
40 and 250 lots. For West Shore at
Rockport Ranch, Comparable 5
transacted with a greater number of
lots than a typical transaction and
warrants an upward adjustment. No
further adjustments for the number
of lots is required.

Residential Lot Valuation 66
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Adjustment Factor Accounts For Comments
Lot Size Adjustments for differences in lot
size between the comparables and
subject are considered.

Those comparables with discernably
larger lot sizes relative to the
subject’s typical lot size of 6,000
and 3,600 square feet for North
Shore and West Shore at Rockport
Ranch, respectively, are adjusted
downward. Conversely,
comparables with smaller lot sizes
are adjusted upward.

Site Utility

Differences in contour, drainage,
soil conditions, as well as project
design, can affect the utility and
therefore, the market value of the
properties.

The subject property is considered
to have average utility. For West
Shore at Rockport Ranch, the lots
are configured in an 8-pack cluster
formation. Comparable 3 has a
traditional configuration, which is
considered to be superior and
warrants a downward adjustment.

Conversely, a portion of
Comparable 4 lots have a
townhome configuration, which is
considered to be inferior to a cluster
configuration and warrants an
upward adjustment. Each of the
remaining comparables are
considered to offer similar site
utility as the subject and no
additional adjustment for this
characteristic are required.

Lot Premiums/
Discounts
Primary physical factors that affect
desirability of lots.

The subject has average lot
premiums/discounts. All of the
comparables have similar lot
premiums/discounts and no
adjustments are warranted.

The tables on the following pages summarizes the required adjustments when considering the comparable sales relative to the subject.

Residential Lot Valuation 67
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Land Sales Adjustment Grid - North Shore at Rockport Ranch Subject Comparable 1 Comparable 2 Comparable 3 Comparable 4 Comparable 5 Comparable 6 Comparable 7 Name Ci ty of Meni fee
CFD No. 2023-1
(Rockport Ranch)
ES Leon Rd., SO
Domenigoni Pkwy.

Stratford Place II -
East
Green Val l ey
Ranch PA 12
Stratford Place II Windsong La Ventana Pleasant Valley
Ranch
Ci ty Meni fee Wi nches ter Perri s Perri s Perri s Moreno Val l ey Wi nchester Wi nchester Count y Rive rside Rive rside Rive rside Rive rside Rive rside Rive rside Rive rside Rive rside Sale Date Jan-24 Oct-23 Sep-23 Nov-22 Aug-22 Apr-22 Aug-21 Sale Status In-Contract Close d Close d Close d Close d Close d Close d Sale Price $21,000,000 $13,186,466 $11,795,535 $4,906,500 $7,500,000 $8,000,000 $15,728,000 Number of Lots 109 182 107 191 90 177 220 202
Price per Lot $115,385 $123,238 $61,757 $54,517 $42,373 $36,364 $77,861 Expenditures After Purchase $141,209 $104,762 $141,243 $175,483 $197,345 $178,636 $150,861 Bond Consideration $4,000 $6,000 $4,000 $5,966 $4,000 $4,000 $5,376 Price per Lot (Loaded) $260,594 $234,000 $207,000 $235,966 $243,718 $219,000 $234,098 Property Rights Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple R a n k i n g –––––––
Financing Terms Cash to seller Cash to seller Cash to seller Cash to seller Cash to seller Cash to seller Cash to seller A d j u s t m e n t –––––––
Conditions of Sal e Market Assembl ge Market Assemblge Market Market Market Adjustment – Superior – Superior – – –
Market Conditions 8/30/2024 Jan-24 Oct-23 Sep-23 Nov-22 Aug-22 Apr-22 Aug-21 Adjustment – Inferior Inferior Inferior Inferior Inferior Very Inferior Property Adjustments
Locati on/Communi ty Meni fee Wi nches ter Perri s Perri s Perri s Moreno Val l ey Wi nchester Wi nchester Adjustment – Inferior Inferior Inferior – – –
Number of Lots 109 182 107 191 90 177 220 202
A d j u s t m e n t –––––––
Typical Lot Size 6,000 7,200 6,000 6,500 6,000 5,000 6,000 7,250 A d j u s t m e n t S u p e r i o r –––I n f e r i o r –S u p e r i o r Si te Uti l i ty Average Average Average Average Average Average Average Average A d j u s t m e n t –––––––
Lot Premi ums /Di scounts Average Average Average Average Average Average Average Average A d j u s t m e n t –––––––
Overall Ranking Superior Inferior Very Inferior Inferior Inferior Inferior Inferior Residential Lot Valuation 68
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Land Sales Adjustment Grid - West Shore at Rockport Ranch Subject Comparable 1 Comparable 2 Comparable 3 Comparable 4 Comparable 5 Name Ci ty of Meni fee
CFD No. 2023-1
(Rockport Ranch)
Riverwalk Village Alessandro 27550 Brodiaea
Avenue
Towns & Courts SWC Leon Rd &
Simpson Rd
City Menifee Menifee Moreno Valley Moreno Valley Winchester Winchester Count y Rive rside Rive rside Rive rside Rive rside Rive rside Rive rside Sale Date Dec-23 Nov-23 Jul-23 Apr-22 Feb-22
Sale Status Closed Closed Closed Closed Closed
Sale Price $22,077,500 $16,143,500 $2,800,055 $17,500,000 $8,000,000 Number of Lots 96 198 225 67 252 420
Price per Lot $111,503 $71,749 $41,792 $69,444 $19,048
Expenditures After Purchase $118,735 $131,516 $137,877 $82,556 $132,952 Bond Consideration $4,000 $4,000 $4,000 $4,000 $4,000
Price per Lot (Loaded) $234,238 $207,265 $183,669 $156,000 $156,000 Property Rights Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple A d j u s t m e n t –––––
Financing Te rms Cash to se lle r Cash to se lle r Cash to se lle r Cash to se lle r Cash to se lle r A d j u s t m e n t –––––
Conditions of Sale Market Market Market Market Market
A d j u s t m e n t –––––
Market Conditions 8/30/2024 Dec-23 Nov-23 Jul-23 Apr-22 Feb-22 Adjustment – Inferior Inferior Inferior Inferior
Property Adjustments
Location/Community Menifee Menifee Moreno Valley Moreno Valley Winchester Winchester A d j u s t m e n t –––––
Number of Lots 96 198 225 67 252 420
A d j u s t m e n t ––––I n f e r i o r
Typical Lot Size 3,600 2,250 3,000 3,600 2,500 3,000
Adjustment Inferior Inferior – Inferior Inferior
Site Utility A ve rage Similar Similar A bove A ve rage Be low A ve rage Similar Adjustment – – Superior Inferior –
L ot Pre m ium s/Discounts A ve rage Sim ilar Similar Similar Similar Similar A d j u s t m e n t –––––
Overall Ranking Inferior Inferior Inferior Very Inferior Very Inferior Residential Lot Valuation 69
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Land Value Conclusion
For North Shore at Rockport Ranch, the comparables reflect a range of sales prices of $36,364 to $123,238 per lot where as for West Shore at Rockport Ranch, the comparables reflect a range of sales prices of $19,048 to $111,503 per lot. The wide disparity in the unadjusted range is largely attributable to lot condition at time of sale (unimproved lots, partially improved lots and improved lots), as well as differences in permits and fees, remaining site costs and bonds encumbrances. After accounting for the expenditures after sale, the comparables exhibit a loaded lot range of $207,000 to $260,594 per loaded lot for North Shore at Rockport Ranch. For West Shore at Rockport Ranch, the comparables exhibit a loaded lot range of $156,000 to $234,238 per loaded lot. The following table summarizes the loaded lot values (unadjusted) and our conclusion of loaded lot value for the subject property.

Bulk Lot Ranking Summary - North Shore at Rockport Ranch Comparable Sale Date
$/ Loaded Lot
(Unadjusted) Net Adjustment
1 Jan-24 $260,594 Superior
Subject - $250,000 -
5 Aug-22 $243,718 Inferior
4 Nov-22 $235,966 Inferior
7 Aug-21 $234,098 Inferior
2 Oct-23 $234,000 Inferior
6 Apr-22 $219,000 Inferior
3 Sep-23 $207,000 Very Inferi or
Estimated Unit Value $250,000

Ranking Analysis and Reconciliation - West Shore at Rockport Ranch Comparable Sale Date
$/ Loaded Lot
(Unadjusted) Net Adjustment
1 Dec-23 $234,238 Inferior
Subject - $215,000 -
2 Nov-23 $207,265 Inferior
3 Jul-23 $183,669 Inferior
4 Apr-22 $156,000 Very Inferior
5 Feb-22 $156,000 Very Inferior
Estimated Unit Value $215,000

For North Shore at Rockport Ranch, primary reliance is placed on Comparable 1 as it received the least amount of gross adjustments and is the most recent sale in the data set. The remaining comparables are given secondary reliance. For West Shore at Rockport Ranch, Comparable 1 is an outlier in the data and is given secondary reliance despite receiving the least amount of gross adjustments. The remaining comparables are considered to be inferior to the subject, so an estimate of value between Comparable 1 and the remaining comparables is considered to be reasonable.

Residential Lot Valuation 70
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Deducting the subject’s net permits and fees due at building permit, which is reflective of the impact fees to be financed by the proposed Bonds, yields a finished lot value for the subject property as calculated below for each benchmark lot category.

Conclusion of Value: Sales Comparison Approach
Lot Size Categories
North Shore at
Rockport Ranch
West Shore at
Rockport Ranch
Concluded Loaded Lot Value $250,000 $215,000
L e ss: Pe rmits & Fe e s ($22,600) ($22,600)
Estimated Finished Lot Value $227,400 $192,400
Rounded $227,000 $192,000

Land Residual Analysis 71
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Land Residual Analysis
The land residual analysis is employed as an additional indicator of market value for the subject’s lots.

This valuation method is used in estimating land value when subdivision and development are the highest and best use of the land being appraised. All direct and indirect costs are deducted from an estimate of the anticipated gross sales price of the improved product; the resultant net sales proceeds are then discounted to present value at an anticipated rate over the development and absorption period to indicate the value of the land. The land residual analysis is conducted on a quarterly basis. As a discounted cash flow analysis, the land residual analysis consists of four primary components summarized as follows:

Revenue – the gross income is based on the sale of completed homes.

Absorption Analysis – the time frame required for sell off. Of primary importance in this analysis is the allocation of the revenue over the absorption period – including the estimation of an appreciation factor (if any).

Expenses – the expenses associated with the sell-off are calculated in this section – including direct and indirect construction costs, administration, marketing, and commission costs, as well as taxes and special taxes (if any).

Discount Rate – an appropriate discount rate is derived employing a variety of data.

Discussions of these four concepts follows below, with the discounted cash flow analysis offered at the end of this section.

Revenue
The projected sales price for the average unit within the project will vary, as the ultimate sales price is affected by unit size, location within the project, site influences, construction costs, anticipated premiums achievable at the point of retail sale, as well as external influences such as adjacent land uses.

The benchmark lot categories are North and West Shore at Rockport Ranch, which consists of 109 and 96 lots, respectively, with a typical lot size of 6,000 and 3,600 square feet, respectively. Based on the Residential Market section of this report and considering current asking prices, we estimated a typical home size and corresponding base price for each benchmark lot category. For North and West Shore at Rockport Ranch, we estimate a typical average-sized home on the subject would contain approximately 2,400 and 2,000 square feet, respectively, and would have a corresponding base price of $600,000 and $530,000, respectively. These estimates will be utilized in the analysis.

Closing Projections
The typical time required for the construction of units has been approximately three to six months from start to closing. It is assumed that initial closings will occur within three to six months of the date of sale. The premise is that the builder constructs efficiently as homes are sold. These assumptions are reflected in the projected construction schedule shown in the land residual models at the end of this section. Since the land residual analysis is conducted on a quarterly basis, closings are reflected in the following period, as most construction will be substantially completed prior to initiation of sales.

Land Residual Analysis 72
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Changes in Market Conditions (Price Increases or Decreases) The subject’s market area has experienced rapid market appreciation in home prices for the past few years; however, since early 2022 the Federal Reserve Bank began raising the benchmark federal-funds rate (from near zero in March 2022) in an effort to manage rising inflation. The fed-funds rate is greater than 5%, which has resulted in a substantial rise in mortgage interest rates, which now are approximately 6.25% and have moderated from 8.0% in October of 2023. The rise in mortgage interest rates has impacted the affordability of homes for a certain segment of the homebuyer market, which may impact pricing in the near term. Consequently, under current market conditions, forecasting home appreciation during the absorption period is speculative, and several homebuilders surveyed indicate they typically do not trend/forecast home appreciation during the sell-off period. Therefore, for purposes of this analysis, the home price revenue will be held constant during the sell-off period.

Absorption
Typically, multiple product lines would be marketed in a subdivision to create characteristics appealing to as many potential purchasers as possible. Offering home products within a subdivision to different market segments is done with the aim of increasing absorption and reducing the overall development holding period for a project.

Based on the typical marketing and absorption rate data presented in the Residential Market overview, we estimate an absorption rate of approximately 3.5 and 4 units per month or 10.50 and 12 units per quarter for North and West Shore at Rockport Ranch, respectively. For North Shore at Rockport Ranch, home sales begin in Period 1 and the subject lots sell out in Period 11, with Period 12 needed to complete construction and close escrow. For West Shore at Rockport Ranch, home sales begin in Period 1 and the subject lots sell out in Period 8, with Period 9 needed to complete construction and close escrow. Our disposition period is over the course of 3.0 and 2.25 years for North and West Shore at Rockport Ranch, respectively. Market conditions are anticipated to remain stable over this time.

Expense Projections
As part of an ongoing effort to assemble market information, the table below reflects survey responses and developer budget information for numerous single-family residential subdivisions throughout the Southern California region.

Subdivision Budgets
Developer
Classification Municipality
Budget
Date
No. of
Units Quality
Avg. Home
Size (SF)
Typical Lot
Size
G & A % of
Revenue
Mkt & Sales %
of Revenue
Direct
Costs/SF
Indirect
Costs/SF
Indirect % of
Direct Costs
Site
Costs/Lot
Permits &
Fees/Unit
Cost per
Model
Profit % of
Revenue IRR
Projected
Sales/Mo.

National Winchester 2024 276 Average 1,820 3,000 2.7% 2.7% $93.38 N/Av N/Av N/Av $48,101 N/Av 19.20% N/Av 4 National San Jacinto 2024 89 Average 2,135 7,200 N/Av N/Av $88.55 N/Av N/Av $76,390 $66,100 N/Av N/Av N/Av N/Av National Winchester 2024 129 Average 2,707 6,200 N/Av N/Av $83.18 N/Av N/Av $139,940 $54,600 $37,814 N/Av N/Av N/Av Local Jurupa Valley 2023 53 Average 2,900 6,750 3.5% 3.0% $85.53 $16.67 19.49% $125,482 $64,861 N/Av 12.0% 25.0% N/Av National San Diego County 2023 27 Good 2,246 N/Av N/Av N/Av $152.00 N/Av N/Av $240,018 $50,668 N/Av N/Av N/Av N/Av Regional San Diego County 2023 83 Good 1,975 N/Av N/Av N/Av $135.00 N/Av N/Av $240,018 $47,937 N/Av N/Av N/Av N/Av National Winchester 2023 202 Average 2,342 7,250 N/Av N/Av $72.06 $11.06 15.35% $76,242 $73,000 N/Av N/Av N/Av N/Av National Victorville 2023 276 Average 2,220 7,200 N/Av N/Av $ 74.96 $11.09 14.79% $83,185 $32,800 $80,339 N/Av N/Av N/Av National San Jacinto 2023 177 Average 2,112 7,200 N/Av N/Av $77.91 $9.73 12.49% $110,669 $61,700 N/Av N/Av N/Av N/Av National Hemet 2022 150 Average 2,092 5,500 N/Av N/Av $92.11 N/Av N/Av $72,875 $51,700 N/Av 20.5% N/Av N/Av National Moreno Valley 2022 96 Average 2,346 7,350 N/Av N/Av $79.46 N/Av N/Av $124,544 $68,647 $164,265 N/Av 17.0% N/Av National San Diego County 2022 187 Average 2,420 6,698 N/Av N/Av $95.00 N/Av N/Av $255,045 $77,870 N/Av N/Av N/Av N/Av Regional Riverside County 2021 128 Average 2,009 2,565 3.0% 3.5% $87.42 $16.63 19.0% N/Av $54,371 N/Av 14.0% N/Av N/Av Regional Lancaster 2021 99 Average 2,187 8,005 4.4% 5.7% $72.68 $6.35 9% $89,461 $35,931 $54,000 9.6% 30.2% 3.96 Local Desert Hot Springs 2020 27 Average 1,834 9,148 N/Av N/Av $80.00 N/Av 16% N/Av $24,627 N/Av N/Av N/Av N/Av National Bakersfield 2020 70 Average 1,948 7,817 N/Av N/Av $87.02 N/Av 12% N/Av $38,080 N/Av N/Av N/Av N/Av Regional Riverside County 2020 145 Average 1,834 5,500 N/Av N/Av $60.00 N/Av N/Av N/Av $62,500 N/Av 8.0% N/Av 4/5 National Los Angeles County 2020 148 Average 2,253 7,000 N/Av N/Av $57.21 N/Av N/Av $39,000 $40,000 N/Av N/Av N/Av N/Av Regional Riverside County 2020 46 Average 2,289 6,600 N/Av N/Av $66.49 N/Av N/Av N/Av $31,200 N/Av N/Av N/Av N/Av Land Residual Analysis 73
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Information from the survey above will contribute to the estimate of development expenses classified as follows.

General and Administrative
These expenses consist of management fees, liability and fire insurance, inspection fees, appraisal fees, legal and accounting fees and copying or publication costs. This expense category typically ranges from 2.5% to 4.0%, depending on length of project and if all of the categories are included in a builder’s budget. We have used 3.0% for general and administrative expenses.

Marketing and Sale
These expenses typically consist of advertising and promotion, closing costs, sales operations, and sales commissions. The expenses are expressed as a percentage of the gross sales revenue. The range of marketing and sales expenses typically found in projects within the subject’s market area is 5.0% to

6.5%. A figure of 6.0%, or 3.0% for marketing and 3.0% for sales, is estimated in the marketing and sales expense category.

Property Taxes (Ad Valorem and Special Taxes)
The subject is located within an area with an effective tax rate of 1.1591%. This amount is applied to the estimated market values and divided by the total number of units to yield an estimate of ad valorem taxes/unit/year for each phase. The tax amounts are applied to unclosed inventory over the sell-off period. Property taxes are increased by 2% per year.

The subject is within the boundary of City of Menifee CFD No. 2023-1 (Rockport Ranch). The facilities special tax associated with the district, for the most recently available tax year amount to $3,157 and $2,719 per unit for North and West Shore at Rockport Ranch, respectively. The special taxes escalate at 2% per year. Based on the direct charges provided by the special tax consultant, it is estimated the subject would have direct charges of approximately $923 per lot. The total tax expense is gradually reduced over the absorption period, as the land components are sold off.

HOA
A homeowner’s association (HOA) is planned for the subject. According to the developer the estimated HOA fee applicable to the subject property is $205 per home per month, which is similar to other new home projects in the area and will therefore be utilized in the analysis.

Permits and Fees
Based on the information provided, the estimate of net permits and fees for the subject are estimated at $22,600 per lot.

Direct and Indirect Construction Costs
Construction costs are generally classified into direct and indirect costs. Direct costs reflect the cost of labor and materials to build the project. Direct costs generally are lower per square foot for larger floor plans, all else being equal, due to economies of scale. Indirect items are the carrying costs and fees incurred in developing the project and during the construction cycle. Construction quality and market-segment are significant factors that affect direct construction costs. In addition, Land Residual Analysis 74
City of Menifee CFD No. 2023-1 (Rockport Ranch)
national/public builders, which are able to achieve lower costs due to the larger scale in which orders are placed, routinely achieve lower direct costs.

Recent conversations with homebuilders confirm construction costs have fluctuated over the last several quarters, but have moderated since the pandemic. Based on the cost comparables, and considering the product line under development, a direct cost estimate of $80.00 and $85.00 per square foot is applied the estimated home within North and West Shore at Rockport Ranch, respectively. These estimates are generally consistent with comparables in the market.

Regarding indirect costs, the following list itemizes some of the typical components that generally comprise indirect costs:
• Architectural and engineering fees for plans, plan checks, surveys and environmental studies • Appraisal, consulting, accounting and legal fees
• The cost of carrying the investment in land and contract payments during construction. If the property is financed, the points, fees or service charges and interest on construction loans are considered
• All-risk insurance
• The cost of carrying the investment in the property after construction is complete, but before sell-out is achieved
• Developer fee earned by the project coordinator
• Interest reserve
Conversations with homebuilders indicate the indirect costs generally range anywhere from 10% to 15% of the direct costs (excluding marketing, sales, general and administrative expenses, taxes, which are accounted for separately). An estimate of 12% is considered reasonable for the subject.

Model Complex
North and West Shore at Rockport Ranch have constructed two and three model homes to service the subject communities, respectively. The subject communities benefit from having prospective buyers be able to visit the all models comprising the master plan. If the benchmark lot communities were being marketed separately, it is estimated each benchmark would have three model homes.

Model upgrade expenses can vary widely depending upon construction quality, targeted market and anticipated length of time on the market. These upgrades, exterior and interior, including furniture, can range from $20,000 per model to over $250,000 per model for executive homes.

Based on the quality of the subject’s proposed improvements and the targeted buyer segment, a model upgrade cost of $50,000 per model for each benchmark lot category is considered reasonable for the subject’s lots. Of this amount approximately 40% will be recaptured with the sale of the Land Residual Analysis 75
City of Menifee CFD No. 2023-1 (Rockport Ranch)
models reflecting a recapture of $20,000 per model for each benchmark lot category. Model costs will be incurred in the first period while the recapture amount will be applied evenly over the disposition period.

Summary
The following chart summarizes the revenue and expenses discussed on the preceding pages.

Revenue & Expense Summary - North Shore at Rockport Ranch

REVENUE SUMMARY
No. of Unit Base Retail
Floor Plan Units Size (SF) $/SF Value Pe r Unit Exte nsion Average Unit 109 2,400 $250 $600,000 $65,400,000
Model Recapture (@ 40% of cost) $60,000
Total Revenue Before Appreciation: 65,460,000$
$600,550 /unit
Total Revenue After Appreciation: 65,460,000$
$600,550 /unit

EXPENSES SUMMARY
Total Over Sell-Off Period
General and Administrative 3.0% of total revenue 1,963,800 $ Marke ting and Sale s 6.0% of total re ve nue 3,927,600 $ Ad Valorem Taxes $2,556 /unit/year 100,873 $ (from cash flow) Direct Charges $923 /unit/year 36,422 $ (from cash flow) Special Taxes/A ssessments $3,157 /unit/year 124,573 $ (from cash flow) Homeowner's Association Fees $205 /unit/month 382,223 $ (from cash flow) Model Costs 3 models 150,000 $ $50,000 (per model) Permi ts and Fees 2,463,400$ $22,600 (per unit)
Subtotal: 9,148,890$
Di rect Constructi on Costs (Before Appreci ation) SF Units Cost/SF Extension Average/Typical Floor Plan 2,400 109 $80.00 20,928,000 $ $192,000 /unit Indirect Construction Costs 12% of Direct Costs 2,511,360 $ $23,040 /unit Subtotal: 23,439,360$
Total Expenses Before Appreciation: 32,588,250$

Land Residual Analysis 76
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Revenue & Expense Summary - West Shore at Rockport Ranch

REVENUE SUMMARY
No. of Uni t Base Retail
Floor Plan Units Size (SF) $/SF Value Per Unit Extension Average Unit 96 2,000 $265 $530,000 $50,880,000
Model Recapture (@ 40% of cost) $60,000
Total Revenue Before Appreciation: 50,940,000$
$530,625 /unit
Total Revenue After Appreciation: 50,940,000$
$530,625 /unit

EXPENSES SUMMARY
Total Over Sel l-Off Period
General and Administrative 3.0% of total revenue 1,528,200 $ Marke ting and Sale s 6.0% of total re ve nue 3,056,400 $ Ad Valorem Taxes $2,264 /unit/year 61,841 $ (from cash flow) Direct Charges $923 /unit/year 25,214 $ (from cash flow) Special Taxes/A ssessments $2,719 /unit/year 74,285 $ (from cash flow) Homeowner's Association Fees $205 /unit/month 265,680 $ (from cash flow) Model Costs 3 models 150,000 $ $50,000 (per model) Permi ts and Fees 2,169,600$ $22,600 (per unit)
Subtotal: 7,331,219$
Direct Construction Costs (Before Appreciation) SF Uni ts Cost/SF Extension Average/Typical Floor Plan 2,000 96 $85.00 16,320,000 $ $170,000 /unit Indirect Construction Costs 12% of Direct Costs 1,958,400 $ $20,400 /unit Subtotal: 18,278,400$
Total Expenses Before Appreciation: 25,609,619$

Internal Rate of Return and Discount Rate
Positive attributes of the subject property include steady demand in the market area and limited new construction. There are some “negative” attributes associated with the subject such as rising construction costs, in addition to the potential for deterioration in market conditions in the residential sector that would result from a change in macroeconomic factors (ex. continued high inflation, unemployment rates, interest rates, etc.).

Using a 5.00% present value factor and 10.00% for developer’s incentive for North Shore at Rockport Ranch and West Shore at Rockport Ranch, results in an implied internal rate of return (IRR) of 18.16% for North Shore at Rockport Ranch and 20.80% for West Shore at Rockport Ranch.

Realty Rates provides expected Developer IRR for California developments as follows:

Land Residual Analysis 77
City of Menifee CFD No. 2023-1 (Rockport Ranch)

The survey above is primarily focused on raw land development; whereas, the subject property is analyzed herein as if improved (finished lot, or improved site, condition), which carries less risk.

Furthermore, each implied IRR for the benchmark lot categories is within the range presented by the RealtyRates survey and are considered to be reasonable.

Conclusion
The land residual analysis is presented as follows:

Land Residual Analysis 78
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Land Residual Analysis - North Shore at Rockport Ranch
Q u a r t e r :0123456789 1 0 1 1 1 2 T o t a l

ABSORPTION
Sales 10.50 10.50 10.50 10.50 10.50 10.50 10.50 10.50 10.50 10.50 4.00 0 109 Close of Escrow (COE) 0.00 10.50 10.50 10.50 10.50 10.50 10.50 10.50 10.50 10.50 10.50 4.00 109 Unsold Inventory 109 98.50 88.00 77.50 67.00 56.50 46.00 35.50 25.00 14.50 4.00 0.00 0.00 Sales Revenue (Before Appreciation) $ 6,305,780 $ 6,305,780 $ 6,305,780 $ 6,305,780 $ 6,305,780 $ 6,305,780 $ 6,305,780 $ 6,305,780 $ 6,305,780 $ 6,305,780 $ 2,402,202 $ - Annual Appreciation Factor 0% 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 Sales Revenue (After Appreciation) $ 6,305,780 $ 6,305,780 $ 6,305,780 $ 6,305,780 $ 6,305,780 $ 6 ,305,780 $ 6,305,780 $ 6,305,780 $ 6,305,780 $ 6,305,780 $ 2,402,202 $ - $ 65, 460,000 Total Sales Revenue (at Close of Escrow) $ - $ 6,305,780 $ 6,305,780 $ 6,305,780 $ 6,3 05,780 $ 6,305,780 $ 6,305,780 $ 6,305,780 $ 6,305,780 $ 6,305,780 $ 6,305,780 $ 2,402,202 $ 65,460,000

EXPENSES AND CASH FLOWS
General and Administrative 3.0% $ (163,650) $ (163,650) $ (163,650) $ (163,650) $ (163,650) $ (163,650) $ (163,650) $ (163,650) $ (163,650) $ (163,650) $ (163,650) $ (163,650) $ (1, 963,800) Marketing and Sales 6.0% $ - $ (378,347) $ (378,347) $ (378,347) $ (378,347) $ (378,347) $ (378,347) $ (378,347) $ (378,347) $ (378,347) $ (378,347) $ (144,132) $ (3 ,927,600) Ad Valorem Taxes ($/unit/yr) $2,556 $ (17,415) $ (15,816) $ (14,201) $ (12,569) $ (10,92 0) $ (9,255) $ (7,573) $ (5,873) $ (4,157) $ (2,423) $ (67 2) $ - $ (100,873) Direct Charges ($/unit/yr) $923 $ (6,288) $ (5,711) $ (5,127) $ (4,538) $ (3,943) $ (3,342) $ (2,734) $ (2,121) $ (1,501) $ (875) $ (243) $ - $ (36,422) Special Taxes/Assessments ($/unit/yr) $3,157 $ (21,506) $ (19,532) $ (17,537) $ (15,522) $ (13,486) $ (11,429) $ (9,352) $ (7,253) $ (5,133) $ (2,992) $ (830) $ - $ (124,573) Homeowner's Association Fees ($/unit/mo) $205 $ (67,035) $ (60,578) $ (54,120) $ (47,663) $ (41,205) $ (34,748) $ (28,290) $ (21,833) $ (15,375) $ (8,918) $ (2,4 60) $ - $ (382,223) Model Costs $ (150,000) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ (150,000) Permits and Fees $ (237,300) $ (237,300) $ (237,300) $ (237,300) $ (237,300) $ (237,300) $ (237,300) $ (237,300) $ (237,300) $ (237,300) $ (90,400) $ - $ (2,463,4 00) Subtotal: $ (663,194) $ (880,933) $ (870,282) $ (859,588) $ (848,851) $ (838,070) $ ( 827,245) $ (816,377) $ (805,463) $ (794,504) $ (636,601) $ (307,782) $ (9,148,890) Direct Construction Costs $ (1,008,000) $ (2,016,000) $ (2,016,000) $ (2,016,000) $ (2,016,000) $ (2,016,000) $ (2,016,000) $ (2,016,000) $ (2,016,000) $ (2,016,000) $ (1,392,000) $ (384,000) Annual Appreciation Factor 0% 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 Direct Construction Costs (Appreciated) $ (1,008,000) $ (2,016,000) $ (2,016,000) $ (2,016,000) $ (2,016,000) $ (2,016,000) $ (2,016,000) $ (2,016,000) $ (2,016,000) $ (2,016,000) $ (1,392,000) $ (384,000) $(20,928, 000) Indirect Construction Costs 12% $ (120,960) $ (241,920) $ (241,920) $ (241,920) $ (241,920) $ (241,920) $ (241,920) $ (241,920) $ (241,920) $ (241,920) $ (167,040) $ (46,080) $ (2 ,511,360) Subtotal: $ (1,128,960) $ (2,257,920) $ (2,257,920) $ (2,257,920) $ (2,257,920) $ (2,257,920) $ (2,257,920 ) $ (2,257,920) $ (2,257,920) $ (2,257,920) $ (1,559,040) $ (430,080) $(23,439,360) Total Expenses $ (1,792,154) $ (3,138,853) $ (3,128,202) $ (3,117,508) $ (3,106,771) $ (3,095,990) $ (3,08 5,165) $ (3,074,297) $ (3,063,383) $ (3,052,424) $ (2,195,641) $ (737,862) $(32,588,250) NET INCOME BEFORE DEVELOPER'S INCENTIVE $ (1,792,154) $ 3,166,927 $ 3,177,578 $ 3,188,272 $ 3,199,009 $ 3,209,790 $ 3,220,614 $ 3,231,483 $ 3,242,397 $ 3,253,355 $ 4,110,139 $ 1,664,340 $ 32,871, 750 Developers Incentive 10.00% $ - $ (630,578) $ (630,578) $ (630,578) $ (630,578) $ (630,578) $ (630,578) $ (630,578) $ (630,578) $ (630,578) $ (630,578) $ (240,220) $ (6,546,000) NET INCOME BEFORE DISCOUNTING $ (1,792,154) $ 2,536,349 $ 2,547,000 $ 2,557,694 $ 2,568,431 $ 2,579, 212 $ 2,590,036 $ 2,600,905 $ 2,611,819 $ 2,622,777 $ 3,479,561 $ 1,424,120 $ 26,325,750 Present Value Factors
Discount Rate 5.00% 0.98765 0.97546 0.96342 0.95152 0.93978 0.92817 0.91672 0.90540 0.89422 0.88318 0.87228 0.86151 Discounted Cash Flow $ (1,770,029) $ 2,474,110 $ 2,453,826 $ 2,433,708 $ 2,413,752 $ 2,393,959 $ 2,374,328 $ 2,354,856 $ 2,335,542 $ 2,316,387 $ 3,035,143 $ 1,226,891 $ 24,042,474 Net Present Value (Rounded) $ 24,040,000
per unit: $220,550
$ (1,792,154) $ 3,166,927 $ 3,177,578 $ 3,188,272 $ 3,199,009 $ 3,209,790 $ 3,220,614 $ 3,231,483 $ 3,242,397 $ 3,253,355 $ 4,110,139 $ 1,664,340 Implied Internal Rate of Return (IRR) 18.16% 0.95657 0.91503 0.87529 0.83728 0.80092 0.76613 0.73286 0.70104 0.67059 0.64147 0.61361 0.58696 $ (24,040,000) -1714323.891 2897831.117 2781305.706 2669471.905 2562140.685 2459130.631 2360267.641 2265384.626 2174321.234 20869 23.572 2522023.157 976904.3197 $ 1,381 Land Residual Analysis 79
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Land Residual Analysis - West Shore at Rockport Ranch
Q u a r t e r :0123456789 T o t a l

ABSORPTION
S a l e s 1 21 21 21 21 21 21 21 2 0 9 6
Close of Escrow (COE) 0 12 12 12 12 12 12 12 12 96
Unsol d Inventory 96 84 72 60 48 36 24 12 0 0
Sales Revenue (Before Appreciation) $ 6,367,500 $ 6,367,500 $ 6,367,500 $ 6,367,500 $ 6,367,500 $ 6,367,500 $ 6,367,500 $ 6,367,500 $ - Annual Appreciation Factor 0% 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 Sales Revenue (After Appreciation) $ 6,367,500 $ 6,367,500 $ 6,367,500 $ 6,367,500 $ 6,367,500 $ 6 ,367,500 $ 6,367,500 $ 6,367,500 $ - $ 50,940,000 Total Sales Revenue (at Close of Escrow) $ - $ 6,367,500 $ 6,367,500 $ 6,367,500 $ 6,3 67,500 $ 6,367,500 $ 6,367,500 $ 6,367,500 $ 6,367,500 $ 50,940,000

EXPENSES AND CASH FLOWS
General and Administrative 3.0% $ (169,800) $ (169,800) $ (169,800) $ (169,800) $ (169,800) $ (169,800) $ (169,800) $ (169,800) $ (169,800) $ (1,528,200) Marketing and Sales 6.0% $ - $ (382,050) $ (382,050) $ (382,050) $ (382,050) $ (382,050) $ (382,050) $ (382,050) $ (382,050) $ (3,056,400) Ad Valorem Taxes ($/unit/yr) $2,264 $ (13,583) $ (11,944) $ (10,289) $ (8,617) $ ( 6,928) $ (5,222) $ (3,499) $ (1,758) $ - $ (61,841) Direct Charges ($/unit/yr) $923 $ (5,538) $ (4,870) $ (4,195) $ (3,513) $ (2,825) $ (2,129) $ (1,427) $ (717) $ - $ (25,214) Special Taxes/Assessments ($/unit/yr) $2,719 $ (16,316) $ (14,348) $ (12,360) $ (10,351) $ (8,322) $ (6,273) $ (4,203) $ (2,112) $ - $ (74,285) Homeowner's Association Fees ($/unit/mo) $205 $ (59,040) $ (51,660) $ (44,280) $ (36,900) $ (29,520) $ (22,140) $ (14,760) $ (7,380) $ - $ (265,680) Model Costs $ (150,000) $ - $ - $ - $ - $ - $ - $ - $ (150,000) Permits and Fees $ (271,200) $ (271,200) $ (271,200) $ (271,200) $ (271,200) $ (271,200) $ (271,200) $ (271,200) $ - $ (2,169,600) Subtotal: $ (685,477) $ (905,872) $ (894,174) $ (882,432) $ (870,645) $ (858,814) $ ( 846,938) $ (835,017) $ (551,850) $ (7,331,219) Direct Construction Costs $ (1,020,000) $ (2,040,000) $ (2,040,000) $ (2,040,000) $ (2,040,000) $ (2,040,000) $ (2,040,000) $ (2,040,000) $ (1,020,000) Annual Appreciation Factor 0% 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 Direct Construction Costs (Appreciated) $ (1,020,000) $ (2,040,000) $ (2,040,000) $ (2,040,000) $ (2,040,000) $ (2,040,000) $ (2,040,000) $ (2,040,000) $ (1,020,000) $ (16,320,000) Indirect Construction Costs 12% $ (122,400) $ (244,800) $ (244,800) $ (244,800) $ (244,800) $ (244,800) $ (244,800) $ (244,800) $ (122,400) $ (1,958,400) Subtotal: $ (1,142,400) $ (2,284,800) $ (2,284,800) $ (2,284,800) $ (2,284,800) $ (2,284,800) $ (2,284,800 ) $ (2,284,800) $ (1,142,400) $ (18,278,400) Total Expenses $ (1,827,877) $ (3,190,672) $ (3,178,974) $ (3,167,232) $ (3,155,445) $ (3,143,614) $ (3,13 1,738) $ (3,119,817) $ (1,694,250) $ (25,609,619) NET INCOME BEFORE DEVELOPER'S INCENTIVE $ (1,827,877) $ 3,176,828 $ 3,188,526 $ 3,200,268 $ 3,212,055 $ 3,223,886 $ 3,235,762 $ 3,247,683 $ 4,673,250 $ 25,330,381 Developers Incentive 10.00% $ - $ (636,750) $ (636,750) $ (636,750) $ (636,750) $ (636,750) $ (636,750) $ (636,750) $ (636,750) $ (5,094,000) NET INCOME BEFORE DISCOUNTING $ (1,827,877) $ 2,540,078 $ 2,551,776 $ 2,563,518 $ 2,575,305 $ 2,587, 136 $ 2,599,012 $ 2,610,933 $ 4,036,500 $ 20,236,381 Present Value Factors
Discount Rate 5.00% 0.98765 0.97546 0.96342 0.95152 0.93978 0.92817 0.91672 0.90540 0.89422 Discounted Cash Flow $ (1,805,310) $ 2,477,747 $ 2,458,428 $ 2,439,250 $ 2,420,212 $ 2,401,314 $ 2,382,555 $ 2,363,935 $ 3,609,522 $ 18,747,653 Net Present Value (Rounded) $ 18,750,000
per unit: $195,313
$ (1,827,877) $ 3,176,828 $ 3,188,526 $ 3,200,268 $ 3,212,055 $ 3,223,886 $ 3,235,762 $ 3,247,683 $ 4,673,250 Implied Internal Rate of Return (IRR) 20.80% 0.95057 0.90358 0.85892 0.81646 0.77611 0.73774 0.70128 0.66661 0.63366 $ (18,750,000) $ (1,737,525.34) 2870530.776 2738689.223 2612903.785 2492896.37 2378401.645 2269166.45 2164949.241 2961265.56 4 $ 1,278 Reconciliation of Lot Value 80
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Reconciliation of Lot Value
The concluded estimates of lot value via each approach are shown below. In our opinion, both approaches to value are considered to be good indicators of value and are given equal emphasis in our conclusion. We conclude a finished lot value as follows:

Reconciliation of Finished Lot Value
Lot Size Categories
Sales Comparison Approach $227,000 per finished lot $192,000 per finished lot Land Residual Analysis $220,550 per finished lot $195,313 per finished lot % Difference 2.92% -1.70%
Average $223,775 $193,656
Concluded Finished Lot Value $224,000 per finished lot $194,000 per finished lot North Shore at Rockport
Ranch
West Shore at Rockport
Ranch

Using the conclusion of market value for the North Shore benchmark lot above, a lot size adjustment factor of $10.00 per square foot of difference in lot area is applied in order to estimate the market value for the subject's South Shore at Rockport Ranch lots (6,500 square feet).

As noted, South Shore at Rockport Ranch has 33 lots that have a waterfront premium and achieve a premium in comparison to the other lots. Based on conversations with the sales agents, these lots achieve a premium of approximately $20,000 per lot. The seller of these lots would not receive the full benefit of the premium achieved. Therefore, we will adjust accordingly for the additional premium achieved for the waterfront lots. The finished lot market value conclusion for the three subject lot categories is presented in the following table.

Conclusion of Finished Lot Value
Community
Lot Si ze
(SF)
Benchmark Lot
Value
Lot Si ze
Adj ustment
Waterfront
Adjus tment
Adj us ted
Finished Lot
Value (Rounded)
North Shore at Rockport Ranch 6,000 Benchmark $224,000 $224,000 West Shore at Rockport Ranch 3,600 Benchmark $194,000 $194,000 South Shore at Rockport Ranch 6,500 $224,000 $5,000 $3,500 $232,500

Market Value by Ownership 81
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Market Value by Ownership
In this section, the previously concluded market values will be allocated to each ownership group comprising the appraised properties in order to provide a market value of the appraised properties by ownership. A summary of the along with the current development status is provided in the following table.

Appraised Property Summary
Community
Partially-
Improved SFR
Lots
Partially
Completed
Homes
Completed
Homes*
Homes Sold to
Individuals*
Total
Appraised
Parcels
A ssessed
Parcels
North Shore at Rockport Ranch 20 35 2 33 90 19
South Shore at Rockport Ranch 21 22 4 39 86 14
West Shore at Rockport Ranch 5 33 0 40 78 18
TOTAL 46 90 6 112 254 51
*Completed homes without a complete assessment for structural improvements by County Assessor

As previously noted, there are remaining site development costs of $6,215,155. These costs will be allocated and deducted from the partially-completed lots and lots with home under construction, which totals 136 lots. A profit factor of 5%, or $310,758 ($6,215,155 x 5%), is applied to provide an incentive for a prospective buyer to oversee the remaining site development of the subject property for a total of $6,525,913 or $47,985 per lot will be considered in the following analysis. The remaining costs are not allocated to the completed homes.

Based on the previous analyses, the estimates of market value, by ownership, subject to the impact of the Lien of the Special Tax securing the City of Menifee CFD No. 2023-1 (Rockport Ranch), Series 2024 bonds, as of the date of value, August 30, 2024, are presented in the following table. As previously noted, for the lots with homes under construction, the contributory value of permits and impact fees paid is accounted for in this analysis.

Market Value by Ownership 82
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Market Value by Ownership
Lots/Parcels
/Homes
Lot/Home
Value
Remaining Site
Development Costs
Permits and
Fees
Value per
Component Market Value (Rd.)
Lennar Homes of Cal i forni a, LLC / AG EHC II (LEN) CA 1, L.P.

Partially-Im proved Lots
North Shore at Rockport Ranch 20 $224,000 ($47,985) - $176,015 $3,520,000 South Shore at Rockport Ranch 21 $232,500 ($47,985) - $184,515 $3,875,000 West Shore at Rockport Ranch 5 $194,000 ($47,985) - $146,015 $730,000 Homes Under Construction
North Shore at Rockport Ranch 35 $224,000 ($47,985) $22,600 $198,615 $6,952,000 South Shore at Rockport Ranch 22 $232,500 ($47,985) $22,600 $207,115 $4,557,000 West Shore at Rockport Ranch 33 $194,000 ($47,985) $22,600 $168,615 $5,564,000 Completed Homes
North Shore at Rockport Ranch 2 $530,000 - - $530,000 $1,060,000 (Not-Less-Than) South Shore at Rockport Ranch 4 $550,000 - - $550,000 $2,200,000 (Not-Less-Than) Total - Lennar Homes of California, LLC / AG EHC II (LEN) CA 1, L.P. 142 $28,458,000 Individual Homeowners
Completed Homes
North Shore at Rockport Ranch 33 $530,000 - - $530,000 $17,490,000 (Not-Less-Than) South Shore at Rockport Ranch 39 $550,000 - - $550,000 $21,450,000 (Not-Less-Than) West Shore at Rockport Ranch 40 $515,000 - - $515,000 $20,600,000 (Not-Less-Than) Total - Individual Homeowners 112 $59,540,000
Aggregate, or Cumulative, Appraised Values 254 $87,998,000 Aggregate, or Cumulative, Assessed Values 51 $28,930,504 Total Aggregate, or Cumulative, Value of CFD No. 2023-1 (Rockport Ranch)
305 $116,928,504

Extraordinary Assumptions and Hypothetical Conditions
(None)

1. The value derived herein is based on the hypothetical condition that certain impact fees to be financed by the CFD No. 2023-1 Revenue Bonds, Series 2024, have been paid.

The use of any extraordinary assumption or hypothetical condition may have affected the assignment results.

The value conclusions are based on the following hypothetical conditions. A hypothetical condition is 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.

The value conclusions are subject to the following extraordinary assumptions. An extraordinary assumption is 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.

Exposure Time
Exposure time is the length of time the subject property would have been exposed for sale in the market had it sold on the effective valuation date at the concluded market value. Exposure time is always presumed to precede the effective date of the appraisal. Based on our review of recent sales transactions for similar properties and our analysis of supply and demand in the local residential land market, it is our opinion that the probable exposure time for the subject at the concluded market values stated previously is 6-9 months. As it relates to the completed home component of the subject, current market conditions indicate that 30-to-60-day exposure period is reasonable.

Market Value by Ownership 83
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Marketing Time
Marketing time is an estimate of the amount of time it might take to sell a property at the concluded market value immediately following the effective date of value. As we foresee no significant changes in market conditions in the near term, it is our opinion that a reasonable marketing period for the subject in bulk is likely to be the same as the exposure time. Accordingly, we estimate the subject’s marketing period at 6-9 months.

Certification 84
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Certification
We certify that, to the best of our 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 our personal, impartial, and unbiased professional analyses, opinions, and conclusions.

3. We have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved.

4. We have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding the agreement to perform this assignment.

5. We have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.

6. Our engagement in this assignment was not contingent upon developing or reporting predetermined results.

7. Our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.

8. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice as well as applicable state appraisal regulations.

9. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute.

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

11. Blake Fassler has not made a personal inspection of the property that is the subject of this report. Kevin Ziegenmeyer, MAI, and Eric Segal, MAI, have personally inspected the subject.

12. No one provided significant real property appraisal assistance to the person(s) signing this certification.

13. We have experience in appraising properties similar to the subject and are in compliance with the Competency Rule of USPAP.

14. As of the date of this report, Kevin Ziegenmeyer, MAI, and Eric Segal, MAI, have completed the continuing education program for Designated Members of the Appraisal Institute.

Certification 85
City of Menifee CFD No. 2023-1 (Rockport Ranch)

Blake Fassler
Certified General Real Estate Appraiser
California Certificate # 3007274
Kevin Ziegenmeyer, MAI
Certified General Real Estate Appraiser
California Certificate # AG013567

Eric Segal, MAI
Certified General Real Estate Appraiser
California Certificate # AG026558

Assumptions and Limiting Conditions 86
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Assumptions and Limiting Conditions
This appraisal and any other work product related to this engagement are limited by the following standard assumptions, except as otherwise noted in the report:

1. The title is marketable and free and clear of all liens, encumbrances, encroachments, easements and restrictions. The property is under responsible ownership and competent management and is available for its highest and best use.

2. There are no existing judgments or pending or threatened litigation that could affect the value of the property.

3. There are no hidden or undisclosed conditions of the land or of the improvements that would render the property more or less valuable. Furthermore, there is no asbestos in the property.

4. The revenue stamps placed on any deed referenced herein to indicate the sale price are in correct relation to the actual dollar amount of the transaction.

5. The property is in compliance with all applicable building, environmental, zoning, and other federal, state and local laws, regulations and codes.

6. The information furnished by others is believed to be reliable, but no warranty is given for its accuracy.

This appraisal and any other work product related to this engagement are subject to the following limiting conditions, except as otherwise noted in the report:

1. An appraisal is inherently subjective and represents our opinion as to the value of the property appraised.

2. The conclusions stated in our appraisal apply only as of the effective date of the appraisal, and no representation is made as to the effect of subsequent events.

3. No changes in any federal, state or local laws, regulations or codes (including, without limitation, the Internal Revenue Code) are anticipated.

4. No environmental impact studies were either requested or made in conjunction with this appraisal, and we reserve the right to revise or rescind any of the value opinions based upon any subsequent environmental impact studies. If any environmental impact statement is required by law, the appraisal assumes that such statement will be favorable and will be approved by the appropriate regulatory bodies.

5. Unless otherwise agreed to in writing, we are not required to give testimony, respond to any subpoena or attend any court, governmental or other hearing with reference to the property without compensation relative to such additional employment.

6. We have made no survey of the property and assume no responsibility in connection with such matters. Any sketch or survey of the property included in this report is for illustrative purposes only and should not be considered to be scaled accurately for size. The appraisal

Assumptions and Limiting Conditions 87
City of Menifee CFD No. 2023-1 (Rockport Ranch)
covers the property as described in this report, and the areas and dimensions set forth are assumed to be correct.

7. No opinion is expressed as to the value of subsurface oil, gas or mineral rights, if any, and we have assumed that the property is not subject to surface entry for the exploration or removal of such materials, unless otherwise noted in our appraisal.

8. We accept no responsibility for considerations requiring expertise in other fields. Such considerations include, but are not limited to, legal descriptions and other legal matters such as legal title, geologic considerations such as soils and seismic stability; and civil, mechanical, electrical, structural and other engineering and environmental matters. Such considerations may also include determinations of compliance with zoning and other federal, state, and local laws, regulations and codes.

9. The distribution of the total valuation in the report between land and improvements applies only under the reported highest and best use of the property. The allocations of value for land and improvements must not be used in conjunction with any other appraisal and are invalid if so used. The appraisal report shall be considered only in its entirety. No part of the appraisal report shall be utilized separately or out of context.

10. Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraisers, or any reference to the Appraisal Institute) shall be disseminated through advertising media, public relations media, news media or any other means of communication (including without limitation prospectuses, private offering memoranda and other offering material provided to prospective investors) without the prior written consent of the persons signing the report.

11. Information, estimates and opinions contained in the report and obtained from third-party sources are assumed to be reliable and have not been independently verified.

12. Any income and expense estimates contained in the appraisal report are used only for the purpose of estimating value and do not constitute predictions of future operating results.

13. If the property is subject to one or more leases, any estimate of residual value contained in the appraisal may be particularly affected by significant changes in the condition of the economy, of the real estate industry, or of the appraised property at the time these leases expire or otherwise terminate.

14. Unless otherwise stated in the report, no consideration has been given to personal property located on the premises or to the cost of moving or relocating such personal property; only the real property has been considered.

15. The current purchasing power of the dollar is the basis for the values stated in the appraisal; we have assumed that no extreme fluctuations in economic cycles will occur.

16. The values found herein are subject to these and to any other assumptions or conditions set forth in the body of this report but which may have been omitted from this list of Assumptions and Limiting Conditions.

17. The analyses contained in the report necessarily incorporate numerous estimates and assumptions regarding property performance, general and local business and economic Assumptions and Limiting Conditions 88
City of Menifee CFD No. 2023-1 (Rockport Ranch)
conditions, the absence of material changes in the competitive environment and other matters. Some estimates or assumptions, however, inevitably will not materialize, and unanticipated events and circumstances may occur; therefore, actual results achieved during the period covered by our analysis will vary from our estimates, and the variations may be material.

18. The Americans with Disabilities Act (ADA) became effective January 26, 1992. We have not made a specific survey or analysis of the property to determine whether the physical aspects of the improvements meet the ADA accessibility guidelines. We claim no expertise in ADA issues, and render no opinion regarding compliance of the subject with ADA regulations.

Inasmuch as compliance matches each owner’s financial ability with the cost to cure the non- conforming physical characteristics of a property, a specific study of both the owner’s financial ability and the cost to cure any deficiencies would be needed for the Department of Justice to determine compliance.

19. The appraisal report is prepared for the exclusive benefit of the Client, its subsidiaries and/or affiliates. It may not be used or relied upon by any other party. All parties who use or rely upon any information in the report without our written consent do so at their own risk.

20. No studies have been provided to us indicating the presence or absence of hazardous materials on the subject property or in the improvements, and our valuation is predicated upon the assumption that the subject property is free and clear of any environment hazards including, without limitation, hazardous wastes, toxic substances and mold. No representations or warranties are made regarding the environmental condition of the subject property. Integra Realty Resources – Los Angeles, Integra Realty Resources, Inc., Integra Strategic Ventures, Inc. and/or any of their respective officers, owners, managers, directors, agents, subcontractors or employees (the “Integra Parties”), shall not be responsible for any such environmental conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because we are not experts in the field of environmental conditions, the appraisal report cannot be considered as an environmental assessment of the subject property.

21. The persons signing the report may have reviewed available flood maps and may have noted in the appraisal report whether the subject property is located in an identified Special Flood Hazard Area. We are not qualified to detect such areas and therefore do not guarantee such determinations. The presence of flood plain areas and/or wetlands may affect the value of the property, and the value conclusion is predicated on the assumption that wetlands are non- existent or minimal.

22. Integra Realty Resources – Los Angeles is not a building or environmental inspector. Integra Los Angeles does not guarantee that the subject property is free of defects or environmental problems. Mold may be present in the subject property and a professional inspection is recommended.

23. The appraisal report and value conclusions for an appraisal assume the satisfactory completion of construction, repairs or alterations in a workmanlike manner.

24. It is expressly acknowledged that in any action which may be brought against any of the Integra Parties, arising out of, relating to, or in any way pertaining to this engagement, the Assumptions and Limiting Conditions 89
City of Menifee CFD No. 2023-1 (Rockport Ranch)
appraisal reports, and/or any other related work product, the Integra Parties shall not be responsible or liable for any incidental or consequential damages or losses, unless the appraisal was fraudulent or prepared with intentional misconduct. It is further acknowledged that the collective liability of the Integra Parties in any such action shall not exceed the fees paid for the preparation of the appraisal report unless the appraisal was fraudulent or prepared with intentional misconduct. Finally, it is acknowledged that the fees charged herein are in reliance upon the foregoing limitations of liability.

25. Integra Realty Resources – Los Angeles, an independently owned and operated company, has prepared the appraisal for the specific intended use stated elsewhere in the report. The use of the appraisal report by anyone other than the Client is prohibited except as otherwise provided. Accordingly, the appraisal report is addressed to and shall be solely for the Client’s use and benefit unless we provide our prior written consent. We expressly reserve the unrestricted right to withhold our consent to your disclosure of the appraisal report or any other work product related to the engagement (or any part thereof including, without limitation, conclusions of value and our identity), to any third parties. Stated again for clarification, unless our prior written consent is obtained, no third party may rely on the appraisal report (even if their reliance was foreseeable).

26. The conclusions of this report are estimates based on known current trends and reasonably foreseeable future occurrences. These estimates are based partly on property information, data obtained in public records, interviews, existing trends, buyer-seller decision criteria in the current market, and research conducted by third parties, and such data are not always completely reliable. The Integra Parties are not responsible for these and other future occurrences that could not have reasonably been foreseen on the effective date of this assignment. Furthermore, it is inevitable that some assumptions will not materialize and that unanticipated events may occur that will likely affect actual performance. While we are of the opinion that our findings are reasonable based on current market conditions, we do not represent that these estimates will actually be achieved, as they are subject to considerable risk and uncertainty. Moreover, we assume competent and effective management and marketing for the duration of the projected holding period of this property.

27. All prospective value opinions presented in this report are estimates and forecasts which are prospective in nature and are subject to considerable risk and uncertainty. In addition to the contingencies noted in the preceding paragraph, several events may occur that could substantially alter the outcome of our estimates such as, but not limited to changes in the economy, interest rates, and capitalization rates, behavior of consumers, investors and lenders, fire and other physical destruction, changes in title or conveyances of easements and deed restrictions, etc. It is assumed that conditions reasonably foreseeable at the present time are consistent or similar with the future.

28. The appraisal is also subject to the following:

Assumptions and Limiting Conditions 90
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Extraordinary Assumptions and Hypothetical Conditions
(None)

1. The value derived herein is based on the hypothetical condition that certain impact fees to be financed by the CFD No. 2023-1 Revenue Bonds, Series 2024, have been paid.

The use of any extraordinary assumption or hypothetical condition may have affected the assignment results.

The value conclusions are based on the following hypothetical conditions. A hypothetical condition is 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.

The value conclusions are subject to the following extraordinary assumptions. An extraordinary assumption is 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.

Addenda
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Addendum A
Appraiser Qualifications
Integra Realty Resources -
Sacramento
irr.com
590 Menlo Drive
Suite 1
Rocklin, CA 95765
Blake Fassler
Experience
Mr. Fassler is a licensed appraiser with Integra Realty Resources, a real estate appraisal firm that engages in a wide variety of real estate valuation and consultation assignments.

He began his appraisal career in March 2017 with Seevers Jordan Ziegenmeyer in Rocklin, California. Currently, Mr. Fassler is obtaining experience in the valuation and analysis of various types of real estate by working on a wide variety of property typed including, but not limited to: multifamily, office, retail, industrial, vacant land, and residential subdivisions. He also specializes in the
appraisal of residential master planned communities and subdivision, as well as Mello Roos and Assessment Districts for land secured municipal financings.

Licenses
California, California Certified General Real Estate Appraiser, 3007274, Expires February 2026
Education
Bachelor of Science in Management Science University of California, San Diego Appraisal Courses Completed are as follows:

Basic Appraisal Principles
Basic Appraisal Procedures
General Appraiser Market Analysis & Highest and Best Use (USPAP), Uniform Standards of Professional Appraisal Practice General Appraiser Report Writing and Case Studies
General Appraiser Site Valuation and Cost Approach
General Appraiser Sales Comparison Approach
General Appraiser Income Approach Part 1
General Appraiser Income Approach Part 2
4-Hour Federal and California Statutory and Regulator Laws [email protected] - 916-435-3883

Integra Realty Resources -
Sacramento
590 Menlo Drive
Suite 1
Rocklin, CA 95765
irr.com
F 916.435.4774
T 916.435.3883
Kevin Ziegenmeyer, MAI
Experience
Mr. Ziegenmeyer is a Certified General real estate appraiser and holds the Appraisal Institute's MAI designation. In 1989, Mr. Ziegenmeyer began his career in real estate as a controller for a commercial and residential real estate development corporation. In 1991 he began appraising and continued to be involved in appraisal assignments covering a wide variety of properties, including office, retail, industrial, residential income and subdivisions throughout the state of California, and Northern Nevada. Mr. Ziegenmeyer handles many of the firm’s master-planned property appraisals and over the past two decades has developed expertise in the valuation of Community Facilities Districts and Assessment Districts.In fact, Mr. Ziegenmeyer was one of five appraisers to collaborate with other professionals in developing the appraisal guidelines for the California Debt and Investment Advisory Commission (Recommended Practices in the Appraisal of Real Estate for Land-Secured Financing - 2004). He has developed the experience and background necessary to deal with complex assignments covering an array of property types, with a particular focus on urban redevelopment in the cities and counties of San Francisco, Dublin, Monterey, Newport Beach, Alameda, Napa and San Mateo. In early 2015, Mr. Ziegenmeyer obtained the Appraisal Institute's MAI designation.

Licenses
California, California Certified General Real Estate Appraiser, AG013567, Expires June 2025
Education
Academic:

Bachelor of Science in Accounting, Azusa Pacific University, California

Appraisal and Real Estate Courses:

Standards of Professional Practice, Parts A, B & C
Basic Valuation Procedures
Real Estate Appraisal Principles
Capitalization Theory and Techniques, Part A
Advanced Income Capitalization
Report Writing and Valuation Analysis
Advanced Applications
IRS Valuation Summit I & II
2008, 2009, 2010 & 2011 Economic Forecast
Business Practices and Ethics
Contemporary Appraisal Issues with Small Business Administration Financing General Demonstration Appraisal Report Writing Seminar
7-Hour National USPAP Update Course
Valuation of Easements and Other Partial Interests
2009 Summer Conference
Uniform Appraisal Standards for Federal Land Acquisitions (Yellowbook) 2008 Economic Update
Valuation of Conservation Easements
Subdivision Valuation
2005 Annual Fall Conference
General Comprehensive Exam Module I, II, III & IV
Advanced Income Capitalization
[email protected] - 916.435.3883 x224

Integra Realty Resources -
Sacramento
590 Menlo Drive
Suite 1
Rocklin, CA 95765
irr.com
F 916.435.4774
T 916.435.3883
Kevin Ziegenmeyer, MAI
Education (Cont'd)
Advanced Sales Comparison & Cost Approaches
2004 Central CA Market Update
Computer-Enhanced Cash Flow Modeling
Forecast 2000, 2001, 2002, 2003 & 2004
Land Valuation Assignments
Land Valuation Adjustment Procedures
Highest & Best Use and Market Analysis
Entitlements, Land Subdivision & Valuation
Real Estate Value Cycles
El Dorado Hills Housing Symposium
Federal Land Exchanges
M & S Computer Cost-Estimating, Nonresidential
[email protected] - 916.435.3883 x224

Integra Realty Resources – Los
Angeles
irr .com
T 213.948.4425
F 916.435.4774
12100 Wilshire Boulevard
Suite 800
Los Angeles, CA 90025
Eric Segal, MAI

Experience
Mr . Segal is a Certified General real estate appraiser and holds the Appraisal Institute's MAI designation. In 1998, Mr . Segal began his career in real estate as a research analyst/appraiser trainee for Richard Seevers and Associates. By 1999, he began writing narrative appraisal reports covering a variety of commercial properties, with an emphasis on residential master planned communities and subdivisions. Today, Mr . Segal is a partner in the firm and is involved in appraisal assignments covering a wide variety of properties including office, retail, industrial, multifamily housing, master planned communities, and specializes in the appraisal of Mello‐Roos Community Facilities Districts and Assessment Districts for land‐secured municipal financings, as well as multifamily developments under the U.S. Department of Housing and Urban Development’s Multifamily Accelerated Processing (MAP) Guide. He has developed the experience and background necessary to deal with complex assignments covering an array of property types, with a particular focus on urban redevelopment in the cities of San Francisco, Oakland, Monterey, Alameda and San Mateo. He has developed the experience and background necessary to deal with complex assignments covering an array of property types. Eric is currently Senior Managing Director of the Integra‐Los Angeles office, and Managing Director of the Integra‐Orange County, Integra‐San Francisco and Integra‐Sacramento offices.

Professional Activities & Affiliations
MAI Designation, Appraisal Institute Appraisal Institute, January 2016 Licenses
California, Certified General Real Estate Appraiser, AG026558, Expires February 2025 Nevada, Certified General, A.0207666‐CG, Expires January 2025 Arizona, Certified General, CGA ‐ 1006422, Expires January 2026 Washington, Certified General, 20100611, Expires June 2025 Education
Academic:

Bachelor of Science in Business Administration (Concentrations in Finance and Real Estate & Land Use Affairs), California State University, Sacramento

Appraisal and Real Estate Courses:

Uniform Standards of Professional Appraisal Practice
Appraisal Principles
Basic Income Capitalization
Highest & Best Use and Market Analysis
Advanced Income Capitalization
Report Writing and Valuation
Analysis
Self‐Storage Economics and Appraisal Seminar
Appraisal Litigation Practice and Courtroom Management
Hotel Valuations: New Techniques for today’s Uncertain Times Computer Enhanced Cash Flow Modeling
Advanced Sales Comparison & Cost Approaches
Advanced Applications
Subdivision Valuation
Appraisal of Self‐Storage Facilities
Appraisal of Fast Food Facilities
Appraisal of Limited Service Hotels
How Tenants Create or Destroy Value: Leasehold Valuation and its Impact on Value Appraisal of Manufactured Homes Featuring Next Generation Manufactured Homes [email protected] ‐ 213.948.4425 x228

Integra Realty Resources – Los
Angeles
irr .com
T 213.948.4425
F 916.435.4774
12100 Wilshire Boulevard
Suite 800
Los Angeles, CA 90025
Eric Segal, MAI
Appraisal and Real Estate Courses (cont’d):

Business Practices and Ethics
IRS Valuation Update

[email protected] ‐ 213.948.4425 x228

About IRR
Integra Realty Resources, Inc. (IRR) provides worl d-class commercial real estate valuation, counseling, and advisory services. Routinely ranked among leading property valuation and consulting firms, we are now the largest independent firm in our industry in the United States, with local offices coast to coast and in the Caribbean.

IRR offices are led by MAI-designated Senior Managing Directors, industry leaders who have over 25 years, on average, of commercial real estate experience in their local markets. This experience, coupled with our understanding of how national trends affect the local markets, empowers our clients with the unique knowledge, access, and historical perspective they need to make the most informed decisions.

Many of the nation's top financial institutions, de velopers, corporations, law firms, and government agencies rely on our professional real estate opinions to best understand the value, use, and feasibility of real estate in their market.

Local Expertise...Nationally!
irr.com

Addenda
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Addendum B
Definitions
Addenda
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Definitions
The source of the following definitions is the Appraisal Institute, The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: Appraisal Institute, 2015), unless otherwise noted.

As Is Market Value
The estimate of the market value of real property in its current physical condition, use, and zoning as of the appraisal date.

Disposition Value
The most probable price that a specified interest in property should bring under the following conditions:

1. Consummation of a sale within a specified time, which is shorter than the typical exposure time for such a property in that market.

2. The property is subjected to market conditions prevailing as of the date of valuation.

3. Both the buyer and seller are acting prudently and knowledgeably.

4. The seller is under compulsion to sell.

5. The buyer is typically motivated.

6. Both parties are acting in what they consider to be their best interests.

7. An adequate marketing effort will be made during the exposure time.

8. Payment will be made in cash in U.S. dollars (or the local currency) or in terms of financial arrangements comparable thereto.

9. 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.

This definition can also be modified to provide for valuation with specified financing terms.

Effective Date

1. The date on which the appraisal or review opinion applies.

2. In a lease document, the date upon which the lease goes into effect.

Entitlement
In the context of ownership, use, or development of real estate, governmental approval for annexation, zoning, utility extensions, number of lots, total floor area, construction permits, and occupancy or use permits.

Entrepreneurial Profit

1. A market-derived figure that represents the amount an entrepreneur receives for his or her contribution to a project and risk; the difference between the total cost of a property (cost of

Addenda
City of Menifee CFD No. 2023-1 (Rockport Ranch)
development) and its market value (property value after completion), which represents the entrepreneur’s compensation for the risk and expertise associated with development. An entrepreneur is motivated by the prospect of future value enhancement (i.e., the entrepreneurial incentive). An entrepreneur who successfully creates value through new development, expansion, renovation, or an innovative change of use is rewarded by entrepreneurial profit. Entrepreneurs may also fail and suffer losses.

2. In economics, the actual return on successful management practices, often identified with coordination, the fourth factor of production following land, labor, and capital; also called entrepreneurial return or entrepreneurial reward.

Exposure Time

1. The time a property remains on the market.

2. The estimated length of time that the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective opinion based on an analysis of past events assuming a competitive and open market.

Floor Area Ratio (FAR)
The relationship between the above-ground floor area of a building, as described by the zoning or building code, and the area of the plot on which it stands; in planning and zoning, often expressed as a decimal, e.g., a ratio of 2.0 indicates that the permissible floor area of a building is twice the total land area.

Highest and Best Use

1. The reasonably probable use of property that results in the highest value. The four criteria that the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity.

2. The use of an asset that maximizes its potential and that is possible, legally permissible, and financially feasible. The highest and best use may be for continuation of an asset’s existing use or for some alternative use. This is determined by the use that a market participant would have in mind for the asset when formulating the price that it would be willing to bid. (ISV)

3. [The] highest and most profitable use for which the property is adaptable and needed or likely to be needed in the reasonably near future. (Uniform Appraisal Standards for Federal Land Acquisitions)

Addenda
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Investment Value

1. The value of a property to a particular investor or class of investors based on the investor’s specific requirements. Investment value may be different from market value because it depends on a set of investment criteria that are not necessarily typical of the market.

2. The value of an asset to the owner or a prospective owner for individual investment or operational objectives.

Lease
A contract in which rights to use and occupy land, space, or structures are transferred by the owner to another for a specified period of time in return for a specified rent.

Leased Fee Interest
The ownership interest held by the lessor, which includes the right to receive the contract rent specified in the lease plus the reversionary right when the lease expires.

Leasehold Interest
The right held by the lessee to use and occupy real estate for a stated term and under the conditions specified in the lease.

Liquidation Value
The most probable price that a specified interest in real property should bring under the following conditions:

1. Consummation of a sale within a short time period.

2. The property is subjected to market conditions prevailing as of the date of valuation.

3. Both the buyer and seller are acting prudently and knowledgeably.

4. The seller is under extreme compulsion to sell.

5. The buyer is typically motivated.

6. Both parties are acting in what they consider to be their best interests.

7. A normal marketing effort is not possible due to the brief exposure time.

8. Payment will be made in cash in U.S. dollars (or the local currency) or in terms of financial arrangements comparable thereto.

9. 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.

This definition can also be modified to provide for valuation with specified financing terms.

Marketing Time
An opinion of the amount of time it might take to sell a real or personal property interest at the concluded market value level during the period immediately after the effective date of an appraisal.

Marketing time differs from exposure time, which is always presumed to precede the effective date of an appraisal.

Addenda
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Market Value
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 and 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:
 buyer and seller are typically motivated;
 both parties are well informed or well advised, and acting in what they consider their own best interests;
 a reasonable time is allowed for exposure in the open market;  payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and
 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. (Source: Code of Federal Regulations, Title 12, Chapter I, Part 34.42[g]; also Interagency Appraisal and Evaluation Guidelines, Federal Register, 75 FR 77449, December 10, 2010, page 77472) Prospective Opinion of Value
A value opinion effective as of a specified future date. The term does not define a type of value.

Instead, it identifies a value opinion as being effective at some specific future date. An opinion of value as of a prospective date is frequently sought in connection with projects that are proposed, under construction, or under conversion to a new use, or those that have not yet achieved sellout or a stabilized level of long-term occupancy.

Addenda
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Addendum C
Preliminary Title Report
Prelim (CA/NV) Page 1 192002-001552
675 Placentia Avenue, Suite 225
Brea, CA 92821
Office Phone: (949)404-2500
Office Fax: (714)667-0338
Title Officer Email: [email protected]
Lennar Homes - Inland
4140 Temescal Canyon Road, Ste. 410
Corona, CA 92883
Attn: Beth Bruley
Your Ref: Rockport Ranch
Our Order No.: 192002-001552
Version No. 1 - 8/15/2024
Property Address: Tract 37131-1, Menifee, CA
Preliminary Report Dated as of August 7, 2024 at 7:30 a.m..

IN RESPONSE TO THE ABOVE REFERENCED APPLICATION FOR A POLICY OF TITLE INSURANCE, Doma Title Insurance, Inc.

Hereby reports that it is prepared to issue, or cause to be issued, as of the date hereof, a Policy or Policies of Title Insurance describing the land and the estate or interest therein hereinafter set forth, insuring against loss which may be sustained by reason of any defect, lien or encumbrance not shown or referred to as an Exception below or not excluded from coverage pursuant to the printed Schedules, Conditions and Stipulations of said Policy forms.

The printed Exceptions and Exclusions from the coverage and limitations on covered risks of said Policy or Policies are set forth in Exhibit A attached. The Policy to be issued may contain an Arbitration Clause. When the amount of insurance is less than that set forth in the Arbitration Clause, all arbitrable matters shall be arbitrated at the option of either the Company or the Insured as the exclusive remedy of the Parties. Limitations on covered risks applicable to the CLTA and ALTA Homeowner's Policies of Title Insurance which establish a deductible amount and a maximum dollar limit of liability for certain coverages are also set forth in Exhibit A.

Copies of the Policy forms should be read. They are available from the office which issued this report.

Please read the exceptions shown or referred to below and the exceptions and exclusions set forth in Exhibit A of this report carefully. The exceptions and exclusions are meant to provide you with notice of matters which are not covered under the terms of the title insurance policy and should be carefully considered.

It is important to note that this preliminary report is not a written representation as to the condition of title and may not list all liens, defects, and encumbrances affecting title to the land.

This report (and any supplements or amendments hereto) is issued solely for the purpose of facilitating the issuance of a policy of title insurance and no liability is assumed hereby. If it is desired that liability be assumed prior to the issuance of a policy of title insurance, a Binder or Commitment should be requested.

The form of Policy of title insurance contemplated by this report is:

ALTA Extended Owner's Policy
Please note that the America First Homeowner's Policy (CLTA/ ALTA Homeowner's Policy) can only be issued on transactions involving individuals as purchasers and residential 1-4 properties. Any indication that the America First Homeowner's Policy (CLTA/ ALTA Homeowner's Policy) will be issued in a transaction that does not meet these criteria is hereby revised to state that the policy contemplated is a Standard Coverage Policy.

Randy Dean, Title Officer
Prelim (CA/NV) Page 2 192002-001552

SCHEDULE A

1. The estate or interest in the land herein after described or referred to covered by this report is:

Fee Simple

2. Title to said estate or interest at the date hereof is vested in:

Lennar Homes of California, LLC, a California limited liability company (as to Lots 63 through 67, 122, 166 through 180, 183, 210 through 232, and 291, 298 through 305, Lettered Lots A through E, I through L, P, R, Q, U, W, Y and Z) and AG EHC II (LEN) CA 1, L.P., a Delaware limited partnership (as to the remainder of lots)

3. Real Property in the City of Menifee, County of Riverside, State of California, described as follows:

See attached Legal Description
Prelim (CA/NV) Page 3 192002-001552

LEGAL DESCRIPTION
Real Property in the City of Menifee, County of Riverside, State of California, described as follows:

LOTS 63 THROUGH 67, 82 THROUGH 85, INCLUSIVE, 102 THROUGH 105, INCLUSIVE, 162, 163, 165 THROUGH 183, 194 THROUGH 201, 210 THROUGH 233, 253 THROUGH 273, 289, 291, 298 THROUGH 305,

INCLUSIVE, LETTERED LOTS A THROUGH D, INCLUSIVE, H THROUGH L, P, Q, R, INCLUSIVE, U THROUGH W, INCLUSIVE, Y, Z AND CC, DD, INCLUSIVE, OF TRACT MAP NO. 37131-1, IN THE CITY OF MENIFFE, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 489, PAGES 24 THROUGH 39, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

APN: 364-190-004
Prelim (CA/NV) Page 4 192002-001552

SCHEDULE B
At the date hereof exceptions to coverage in addition to the printed exceptions and exclusions in the policy form designated on the face page of this report would be as follows:

1. Taxes and assessments. Report to follow. Please verify before closing.

2. Assessment liens, if applicable, collected with the general and special taxes, including but not limited to those disclosed by the reflection of the following on the tax roll:

Community Facilities District PERRIS UHS CFD 92-1.

3. The land lies within the boundaries of proposed community facilities District No. 2023-1 (Rockport Ranch), as disclosed by a map filed in in Book 90 Page 56 of maps of assessment and community facilities districts.

4. The land lies within the boundaries of proposed community facilities District No. 2017-1 (Maintenance Services), as disclosed by a map filed in in Book 90 Page 57 of maps of assessment and community facilities districts.

5. The lien of special tax assessed pursuant to Chapter 2.5 commencing with Section 53311 of the California Government Code for Community Facilities District No. 2017-1 (Maintenance Services) City of Menifee, as disclosed by Notice of Special Tax Lien recorded December 14, 2017 as Instrument No. 2017-0524512 of Official Records.

The terms and provisions contained in the document entitled "Amendment No. 16 to Notice of Special Tax Lien" recorded April 10, 2023 as Instrument No. 2023-0101089 of Official Records.

6. The land lies within the boundaries of proposed community facilities District No. 2023-1 (Rockport Ranch), as disclosed by a map filed in Book 91 Page 15 of maps of assessment and community facilities districts.

7. The lien of special tax assessed pursuant to Chapter 2.5 commencing with Section 53311 of the California Government Code for Community Facilities District No. 2023-1 (Rockport Ranch) of the City of Menifee, as disclosed by Notice of Special Tax Lien recorded June 15, 2023 as Instrument No. 2023-0172646 of Official Records.

8. The lien of supplemental taxes, if any, assessed pursuant to Chapter 3.5 commencing with Section 75 of the California Revenue and Taxation Code.

9. An easement for pipelines and other equipment and incidental purposes in the document recorded August 20, 1958 in Book 2320, Page 458 of Official Records.

The location of the easement cannot be determined from record information.

10. The terms and provisions contained in the document entitled "Resolution" recorded December 30, 1980 as Instrument No. 243945 and 243946 both of Official Records.

11. The terms and provisions contained in the document entitled "School Facilities Mitigation Agreement Between Menifee Union District and Dr. R.J. and Ramza Hamra" recorded October 3, 1995 as Instrument No. 330409 of Official Records.

12. The terms and provisions contained in the document entitled "Resolution" recorded May 14, 1996 as Instrument No. 177691 of Official Records.

13. An easement for public use of the construction and maintenance of a water transmission pipeline extension in connection with the La Piedra Road Water Transmission Pipeline Extension, including temporary easements, and perpetual non-exclusive easements and right of way and for all necessary Prelim (CA/NV) Page 5 192002-001552
related uses and incidental purposes, recorded September 1, 2001 as Instrument No. 2001-449760 and August 14, 2002 as Instrument No. 2002-447568 both of Official Records.

In Favor of: Eastern Municipal Water District. a public agency of the State of California Affects: located within Lots R, T and DD, as shown on Tract Map 37131-1

14. The terms and provisions contained in the document entitled Memorandum of Option Agreement, executed by and between AG EHC II (LEN) CA 1, L.P., a Delaware limited partnership and Lennar Homes of California, Inc., a California corporation, recorded December 29, 2021, as Instrument No. 2021-0763085 of Official Records.

15. Water rights, claims or title to water, whether or not shown by the Public Records.

16. The terms and provisions contained in the document entitled Temporary Construction Easement Agreement, executed by and between The Lakes Community Association, a California nonprofit mutual benefit corporation and Lennar Homes of California, LLC, recorded October 20, 2022, as Instrument No. 2022-0437015 of Official Records.

17. An easement for a nonexclusive easement to excavate for, lay, construct, reconstruct, relocate, reconfigure, use, inspect, maintain, operate, repair, replace, patrol, change the size of, add to. or remove from time to time, as Grantee deems necessary, one or more pipelines and conduits, together with devices for metering, measuring, regulating, cathodic protection, communications and other appurtenances and incidental purposes, recorded January 5, 2023 as Instrument No. 2023-0002774 of Official Records.

In Favor of: Southern California Gas Company, a California corporation, its successors and assigns Affects: shown on Tract Map 37131-1

18. The following matters shown or disclosed by the filed or recorded map referred to in the legal description:

Property described below is dedicated as an easement for public purposes: Lots "CC" (Old Newport Road) and "DD (Tres Lagos Drive), inclusive. The dedication is for street and public utility purposes.

19. The following matters shown or disclosed by the filed or recorded map referred to in the legal description:

As a condition of dedication of Lots "CC" (Old Newport Road), and Lot "DD" (Tres Lagos Drive), the owners of Lots "I" "U", and "EE", abutting these highways and during such time will have no rights of access except the general easement of travel. Any change of alignment or width that results in the vacation thereof shall terminate this dedication as to the part vacated.

20. The following matters shown or disclosed by the filed or recorded map referred to in the legal description:

Property is dedicated as an easement for public purposes: abutters' rights of access along Old Newport Road and Tres Lagos Drive. The owners of Lots "CC" and "DD" abutting these highways and during such time will have no rights of access except the general easement of travel. Any change of alignment or width that results in the vacation thereof shall terminate this dedication as to the part vacated.

21. The following matters shown or disclosed by the filed or recorded map referred to in the legal description:

Dedicate to the City of Menifee an easement blanket in nature across Lots "U", "T", and "EE" for landscape and drainage purposes.

22. The following matters shown or disclosed by the filed or recorded map referred to in the legal description:

We retain (Lots "A" through "D", and "R", inclusive) indicated as "Private Streets" (Lots "F" through "Q") indicated as "Private Access" as shown hereon for private use, for the sole benefit of ourselves, our successors, assignees, and lot owners within this Tract Map.

23. The following matters shown or disclosed by the filed or recorded map referred to in the legal description:

We retain (Lots "V", "W", "Y" and "Z") indicated as "Private Common Areas" as shown hereon for private use, for the sole benefit of ourselves, our successors, assignees, and lot owners within this Tract Map.

Prelim (CA/NV) Page 6 192002-001552

24. The following matters shown or disclosed by the filed or recorded map referred to in the legal description:

Dedicated as an easement for public purposes: the private street and private access easements shown hereon. The dedication is for public utility purposes together with the right of ingress and egress for emergency vehicles within the "private street" and "private access" easements.

25. The following matters shown or disclosed by the filed or recorded map referred to in the legal description:

We reserve the reciprocal access easement over a portion of Lot "Y" for utilities, ingress, egress and emergency access as shown hereon, for the benefit of ourselves, our successors and assignees.

26. The following matters shown or disclosed by the filed or recorded map referred to in the legal description:

Dedicate to the City of Menifee the reciprocal access easement shown hereon, for public utility purposes together with the right of ingress and egress for emergency vehicles access.

27. The following matters shown or disclosed by the filed or recorded map referred to in the legal description:

Environmental Constraint Note
Environmental constraints sheet affecting this Map is on file in the office of the City of Menifee Public Works and Engineering Department, in E.C.S. Book 100, Page 100.

28.28. Covenants, conditions, restrictions and easements in the document recorded March 28, 2023 as Instrument No. 2023-0087752 of Official Records, which provide that a violation thereof shall not defeat or render invalid the lien of any first mortgage or deed of trust made in good faith and for value, but deleting any covenant, condition, or restriction indicating a preference, limitation or discrimination based on race, color, religion, sex, sexual orientation, familial status, disability, handicap, national origin, genetic information, gender, gender identity, gender expression, source of income (as defined in California Government Code § 12955(p)) or ancestry, to the extent such covenants, conditions or restrictions violation 42 U.S.C. § 3604(c) or California Government Code § 12955. Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 150 through 152, inclusive, and 161 through 165, inclusive, of Tract No. 37131-1 Document(s) declaring modifications thereof recorded July 20, 2023 as Instrument No. 2023-0210880 of Official Records.

Affects Lots 150 through 152, and 161 through 165
A declaration of annexation recorded September 12, 2023 as Instrument No. 2023-0269064 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 82 through 85, and 102 through 105
A declaration of annexation recorded September 12, 2023 as Instrument No. 2023-0269088 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Prelim (CA/NV) Page 7 192002-001552
Affects Lots 250 through 257, and Association Property: Lot "O" of the Map A declaration of annexation recorded October 3, 2023 as Instrument No. 2023-0292635 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 184 through 193; and
Association Property: Lots "T" and "EE"
A declaration of annexation recorded October 10, 2023 as Instrument No. 2023-0298196 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 194 through 201
A declaration of annexation recorded October 10, 2023 as Instrument No. 2023-0298600 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 242 through 249 and Association Property: Lot "N" of the Map A declaration of annexation recorded October 10, 2023 as Instrument No. 2023-0298606 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 234 through 241 and Association Property: Lot "M" of the Map A declaration of annexation recorded October 11, 2023 as Instrument No. 2023-0299073 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 76 through 81, inclusive, 106 and 107
Prelim (CA/NV) Page 8 192002-001552
A declaration of annexation recorded October 11, 2023 as Instrument No. 2023-0299078 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 72 through 75, inclusive, and 108 through 111 A declaration of annexation recorded October 13, 2023 as Instrument No. 2023-0302692 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 68 through 71, and 112
A declaration of annexation recorded October 13, 2023 as Instrument No. 2023-0302697 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 202 through 209
A declaration of annexation recorded October 13, 2023 as Instrument No. 2023-0302700 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 274 through 281 and Association Property: Lot "F" of the Map A declaration of annexation recorded January 23, 2024 as Instrument No. 2024-0020874 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 59 through 62
A declaration of annexation recorded January 23, 2024 as Instrument No. 2024-0020888 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or Prelim (CA/NV) Page 9 192002-001552
discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 282 through 289; and
Association Property: Lot "G" of the Map.

A declaration of annexation recorded March 8, 2024 as Instrument No. 2024-0065332 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 290 through 297; and
Association Property: Lot "H" of the Map.

A declaration of annexation recorded April 1, 2024 as Instrument No. 2024-0094138 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 298 through 305; and Association Property: Lot "I" of the Map.

A declaration of annexation recorded April 1, 2024 as Instrument No. 2024-0094219 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Association Property: Lot "W"
A declaration of annexation recorded April 1, 2024 as Instrument No. 2024-0094245 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Association Property: Lot "D"
Prelim (CA/NV) Page 10 192002-001552
A declaration of annexation recorded July 19, 2024 as Instrument No. 2024-0214948 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 210 through 217; and
Association Property: Lot "J" of the Map.

29. An easement for right of way to construct, use, maintain, operate, alter, add to, repair, replace, reconstruct, inspect and remove at any time and from time to time underground electrical supply systems and communication systems (hereinafter referred to as "systems"), consisting of wires, underground conduits, cables, vaults, manholes, handholes, and including above-ground enclosures, markers and concrete pads and other appurtenant fixtures and equipment necessary or useful for distributing electrical energy and for transmitting intelligence, date and/or communications and incidental purposes, recorded May 11, 2023 as Instrument No. 2023-0135493 of Official Records.

In Favor of: Southern California Edison Company, a corporation Affects: that portion of Lot "U" of Tract Map No. 37131-1, lying Northerly of a line parallel with and distant

52.00 feet Southerly, measured at right angles, from the centerline of Old Newport Road, 37.00 foot half-width, as shown on said Tract Map No. 37131-1

30. An easement for right of way to construct, use, maintain, operate, alter, add to, repair, replace, reconstruct, inspect and remove at any time and from time to time underground electrical supply systems and communication systems (hereinafter referred to as "systems"), consisting of wires, underground conduits, cables, vaults, manholes, handholes, and including above-ground enclosures, markers and concrete pads and other appurtenant fixtures and equipment necessary or useful for distributing electrical energy and for transmitting intelligence, date and/or communications and incidental purposes, recorded May 23, 2023 as Instrument No. 2023-0147458 of Official Records.

In Favor of: Southern California Edison Company, a corporation Affects: all streets, highways, pubic places, all of Lot Y, and within six feet of all front lot lines, also three feet on each side of all side lot lines of Lots 184 through 209, of Tract No. 37131-1

31. An easement for right of way to construct, use, maintain, operate, alter, add to, repair, replace, reconstruct, inspect and remove at any time and from time to time underground electrical supply systems and communication systems (hereinafter referred to as "systems"), consisting of wires, underground conduits, cables, vaults, manholes, handholes, and including above-ground enclosures, markers and concrete pads and other appurtenant fixtures and equipment necessary or useful for distributing electrical energy and for transmitting intelligence, date and/or communications and incidental purposes, recorded May 23, 2023 as Instrument No. 2023-0147460 of Official Records.

In Favor of: Southern California Edison Company, a corporation Affects: all streets, highways, public places, and all of Lots M, N, and O, of Tract No. 37131-1, together with various strips of land lying within Lots 234, 235, 236, 242, 243, 244, 255, 256 and 257 of said Tract No. 37131-1, as described therein

32.32. An easement for right of way to construct, use, maintain, alter, add to, enlarge, repair, replace, inspect, and/or remove, at any time and from time to time, electric lines, consisting of poles and towers made of various materials, "H" frame structures, guy wires and anchors, crossarms, wires and other fixtures and appliances and communication circuits with necessary appurtenances, both overhead and underground, for conveying electric energy to be used for light, heat, power, telephone and/or purposes and incidental purposes, recorded June 15, 2023 as Instrument No. 2023-0171570 of Official Records.

Prelim (CA/NV) Page 11 192002-001552
In Favor of: Southern California Edison Company, a corporation Affects: as described therein

33. An easement for right of way to construct, use, maintain, operate, alter, add to, repair, replace, reconstruct, inspect and remove at any time and from time to time underground electrical supply systems and communication systems (hereinafter referred to as "systems"), consisting of wires, underground conduits, cables, vaults, manholes, handholes, and including above-ground enclosures, markers and concrete pads and other appurtenant fixtures and equipment necessary or useful for distributing electrical energy and for transmitting intelligence, date and/or communications and incidental purposes, recorded July 3, 2023 as Instrument No. 2023-0193381 of Official Records.

In Favor of: Southern California Edison Company, a corporation Affects: all streets, highways, public places, and all of Lots P and Q, of Tract No. 37131-1, together with various strips of land lying within Lots 261, 262, 263, 269, 270, and 271 of said Tract No. 37131-1 as described therein

34. An easement for an easement and right of way to construct, use, maintain, operate, alter, add to, repair, replace, reconstruct, inspect and remove at any time and from time to time underground electrical supply systems and communication systems and incidental purposes, recorded August 29, 2023 as Instrument No. 2023-0255681 of Official Records.

In Favor of: Southern California Edison Company, a corporation Affects all streets, highways, public places, and all of Lots J, K, and L of Tract 3131-1, together with various strips of land lying within Lots 213 through 217, Lots 221 through 225, and Lots 231 through 233, of said Tract No. 37131-1, as described therein

35. An easement for an easement and right of way to construct, use, maintain, operate, alter, add to, repair, replace, reconstruct, inspect and remove at any time and from time to time underground electrical supply systems and communication systems and incidental purposes, recorded August 29, 2023 as Instrument No. 2023-0255683 of Official Records.

In Favor of: Southern California Edison Company, a corporation Affects all streets, highways, public places, and all of Lots F, G, H, AND I of Tract 3131-1, together with various strips of land lying within Lots 274 through 276, Lots 282 through 284, Lots 290 through 292, and Lots 298 through 300, of said Tract No. 37131-1, as described therein

36. An easement for an easement and right of way to construct, use, maintain, operate, alter, add to, repair, replace, reconstruct, inspect and remove at any time and from time to time underground electrical supply systems and communication systems and incidental purposes, recorded August 29, 2023 as Instrument No. 2023-0255684 of Official Records.

In Favor of: Southern California Edison Company, a corporation Affects Two strips of land lying within Phase 2 Remainder Parcel as shown on Tract Map No. 37131-1, described as follows:

Strip #1 - the Easterly 59.00 feet of said Phase 2 Remainder Parcel; Strip #2 - the Southerly 36.00 feet of the Easterly 106.00 feet of said Phase 2 Remainder Parcel; Excepting therefrom that portion included within Strip #1 described hereinabove.

Prelim (CA/NV) Page 12 192002-001552

37. Matters in a document entitled "Declaration of Solar Energy Covenants, Conditions and Restrictions for Rockport Ranch (With Battery Storage System)", executed by and between Lennar Homes of California, LLC, a California limited liability company, recorded September 1, 2023 as Instrument No. 2023-0260415 of Official Records, including but not limited to covenants, conditions, restrictions, easements, assessments, liens and charges.

Affects Lots 150 through 152, and 161 through 165, of Tract Map No. 37131-1 A declaration of annexation recorded September 12, 2023 as Instrument No. 2023-0269065 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 82 through 85, and 102 through 105
A declaration of annexation recorded September 12, 2023 as Instrument No. 2023-0269089 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 250 through 257, inclusive, and Lettered Lot "O" A declaration of annexation recorded September 15, 2023 as Instrument No. 2023-0273659 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 184 through 193, inclusive, and Lettered Lots "T" and "EE" A declaration of annexation recorded October 10, 2023 as Instrument No. 2023-0298197 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 194 through 201
A declaration of annexation recorded October 10, 2023 as Instrument No. 2023-0298601 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, Prelim (CA/NV) Page 13 192002-001552
to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 242 through 249, inclusive, and Lettered Lot "N" A declaration of annexation recorded October 10, 2023 as Instrument No. 2023-0298607 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 234 through 241, inclusive, and Lettered Lot "M" A declaration of annexation recorded October 11, 2023 as Instrument No. 2023-0299079 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 72 through 75, inclusive, and 108 through 111 A declaration of annexation recorded October 13, 2023 as Instrument No. 2023-0302609 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 76 through 81, inclusive, 106 and 107
A declaration of annexation recorded October 13, 2023 as Instrument No. 2023-0302693 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 68 through 71, and 112
A declaration of annexation recorded October 13, 2023 as Instrument No. 2023-0302698 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Prelim (CA/NV) Page 14 192002-001552
Affects Lots 202 through 209
A declaration of annexation recorded October 13, 2023 as Instrument No. 2023-0302701 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 274 through 281, and Lettered Lot "F"
A declaration of annexation recorded January 23, 2024 as Instrument No. 2024-0020875 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 59 through 62
A declaration of annexation recorded January 23, 2024 as Instrument No. 2024-0020889 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 282 through 289, and Lettered Lot "G"
A declaration of annexation recorded March 8, 2024 as Instrument No. 2024-0065333 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 290 through 297, and Lettered Lot "H"
A declaration of annexation recorded April 1, 2024 as Instrument No. 2024-0094139 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 296 through 305, inclusive, and Lettered Lot "I" Prelim (CA/NV) Page 15 192002-001552
A declaration of annexation recorded April 1, 2024 as Instrument No. 2024-0094220 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lot "W"
A declaration of annexation recorded July 19, 2024 as Instrument No. 2024-0214949 of Official Records but deleting any covenant, condition, or restriction, if any, indicating a preference, limitation, or discrimination based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, handicap, veteran or military status, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, to the extent that such covenants, conditions or restrictions violate applicable state or federal laws.

Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status.

Affects Lots 210 through 217, and Lettered Lot "J"

38. The terms, provisions and conditions contained in a Notice of Builder's Election of Handling of Construction Claims pursuant to California Civil Code Section 895 et seq.

Executed by: Lennar Homes of California, LLC, a California limited liability company (as successor-in-interest by conversion to Lennar Homes of California, Inc.

Recorded: September 12, 2023 as Instrument No. 2023-0269033 of Official Records Said notice provides that violation thereof will not invalidate or impair the rights of any mortgagor or beneficiary.

Reference is made to said document for full particulars.

Affects Lot 63 through 85, inclusive, 102, through 112, inclusive, 150 through 152, inclusive, and 161 through 305 and Lettered Lots "A" through "D", inclusive "F" through "R", inclusive, "T" through "*U", inclusive, "V", "W", "Y", and "Z"

39. An easement for solar energy equipment and incidental purposes, recorded September 12, 2023 as Instrument No. 2023-0269034 of Official Records.

In Favor of: Sunnova Energy Corporation, a Delaware corporation Affects Lot 150 through 152, and 161 through 165

40. An easement for solar energy equipment and incidental purposes, recorded September 12, 2023 as Instrument No. 2023-0269066 of Official Records.

In Favor of: Sunnova Energy Corporation, a Delaware corporation Affects Lots 82 through 85, and 102 through 105

41. An easement for solar energy equipment and incidental purposes, recorded September 12, 2023 as Instrument No. 2023-0269090 of Official Records.

In Favor of: Sunnova Energy Corporation, a Delaware corporation Affects Lots 250 through 257
Prelim (CA/NV) Page 16 192002-001552

42. The terms and provisions contained in the document entitled Private Street Easement Deed, executed by and between AG EHC II (LEN) CA 1, L.P., a Delaware limited partnership and Rockport Ranch Community Association, a California nonprofit mutual benefit corporation, recorded September 13, 2023, as Instrument No. 2023-0270165 of Official Records.

Affects Parcel 1: A non-exclusive temporary easement for the benefit of Grantee and its Members (as defined in the Declaration) for pedestrian and vehicular access on, over through and across the private streets located within Lots A through D, inclusive, and R of Tract Map No. 37131-1; and Parcel 2: A non-exclusive temporary easement for access, ingress and egress on, over, through and across the Private Streets for purposes of maintenance, repair and replacement of the Private Streets as authorized under the terms and provisions of that certain unrecorded Maintenance and Agreement entered into between Lennar Homes of California, LLC, a California limited liability company and Grantee on September 5, 2023 as such private street maintenance agreement may be amended from time to time ("Maintenance and Reserve Agreement").

43. An easement for solar energy equipment and incidental purposes, recorded September 15, 2023 as Instrument No. 2023-0273660 of Official Records.

In Favor of: Sunnova Energy Corporation, a Delaware corporation Affects Lots 184 through 193

44. An easement for solar energy equipment and incidental purposes, recorded October 10, 2023 as Instrument No. 2023-0298198 of Official Records.

In Favor of: Sunnova Energy Corporation, a Delaware corporation Affects Lots 194 through 201

45. An easement for solar energy equipment and incidental purposes, recorded October 10, 2023 as Instrument No. 2023-0298602 of Official Records.

In Favor of: Sunnova Energy Corporation, a Delaware corporation Affects Lots 242 through 249

46. An easement for solar energy equipment and incidental purposes, recorded October 10, 2023 as Instrument No. 2023-0298608 of Official Records.

In Favor of: Sunnova Energy Corporation, a Delaware corporation Affects Lots 234 through 241

47. An easement for solar energy equipment and incidental purposes, recorded October 11, 2023 as Instrument No. 2023-0299075 of Official Records.

In Favor of: Sunnova Energy Corporation, a Delaware corporation Affects Lots 76 through 81, inclusive, 106 and 107

48. An easement for solar energy equipment and incidental purposes, recorded October 11, 2023 as Instrument No. 2023-0299080 of Official Records.

In Favor of: Sunnova Energy Corporation, a Delaware corporation Affects Lots 72 through 75, inclusive, and 108 through 111 Prelim (CA/NV) Page 17 192002-001552

49. An easement for solar energy equipment and incidental purposes, recorded October 13, 2023 as Instrument No. 2023-0302694 of Official Records.

In Favor of: Sunnova Energy Corporation, a Delaware corporation Affects Lots 68 through 71, and 112

50. An easement for solar energy equipment and incidental purposes, recorded October 13, 2023 as Instrument No. 2023-0302699 of Official Records.

In Favor of: Sunnova Energy Corporation, a Delaware corporation Affects Lots 202 through 209

51. An easement for solar energy equipment and incidental purposes, recorded October 13, 2023 as Instrument No. 2023-0302702 of Official Records.

In Favor of: Sunnova Energy Corporation, a Delaware corporation Affects Lots 274 through 281

52. An easement for right of way to construct, use, maintain, operate, alter, add to, repair, replace, reconstruct, inspect and remove at any time and from time to time underground electrical supply systems and communication systems and incidental purposes, recorded October 30, 2023 as Instrument No. 2023-0320452 of Official Records.

In Favor of: Southern California Edison Company, a corporation Affects: all streets, highways, public places, all of Lots T, Z and within six feet of all front lot lines, also three feet on each side of all side lot lines of Lot 63 through 85, and Lots 102 through 112, of Tract No. 37131-1

53. An easement for right of way to construct, use, maintain, operate, alter, add to, repair, replace, reconstruct, inspect and remove at any time and from time to time underground electrical supply systems and communication systems and incidental purposes, recorded October 30, 2023 as Instrument No. 2023-0320453 of Official Records.

In Favor of: Southern California Edison Company, a corporation Affects: all streets, highways, public places, and within six feet of all front lot lines, also three feet on each side of all side lot lines of Lots 161 through 183 and Lots 150 through 152, of Tract No. 37131-1

54. An easement for right of way to construct, use, maintain, operate, alter, add to, repair, replace, reconstruct, inspect and remove at any time and from time to time underground electrical supply systems and communication systems and incidental purposes, recorded October 30, 2023 as Instrument No. 2023-0320454 of Official Records.

In Favor of: Southern California Edison Company, a corporation Affects all of Lot R as shown on Tract No. 37131-1

55. An easement for solar energy equipment and incidental purposes, recorded January 23, 2024 as Instrument No. 2024-0020890 of Official Records.

In Favor of: Sunnova Energy Corporation, a Delaware corporation Affects Lots 282 through 289
Prelim (CA/NV) Page 18 192002-001552

56. An easement for solar energy equipment and incidental purposes, recorded March 8, 2024 as Instrument No. 2024-0065334 of Official Records.

In Favor of: Sunnova Energy Corporation, a Delaware corporation Affects Lots 290 through 297

57. An easement for solar energy equipment and incidental purposes, recorded April 1, 2024 as Instrument No. 2024-0094140 of Official Records.

In Favor of: Sunnova Energy Corporation, a Delaware corporation Affects Lots 298 through 305

58. An easement for solar energy equipment and incidental purposes, recorded July 19, 2024 as Instrument No. 2024-0214950 of Official Records.

In Favor of: Sunnova Energy Corporation, a Delaware corporation Affects Lots 210 through 217

59. No known matters otherwise appropriate to be shown have been deleted from this report, which is not a policy of Title insurance but a report to facilitate the issuance of a policy of Title insurance.

For purposes of policy issuance, items (None) may be eliminated on the basis of an indemnity agreement or other agreement satisfactory to the Company as insurer. *********************END OF REPORT********************* Prelim (CA/NV) Page 19 192002-001552
__________________________________________________________________________________________ ********************NOTES*********************

NOTICE OF RECORDING PROCEDURE
Pursuant to Cal. Revenue & Tax Code §480.3, all Deeds and other Documents that reflect a change in ownership must be accompanied by a Preliminary Change of Ownership Report to be completed by the transferee. If this special report is not presented at the time of recording, an additional recording fee of $20.00, as required by law, will be charged. Preliminary Change in Ownership forms, instructions on how to complete them, and a nonexclusive list of documents that are affected by this change, are available from the County Recorder's Office or the Office of the County Assessor.

Effective January 1, 2018, Cal. Government Code §27388.1 imposes an additional fee of $75.00 to be paid at the time of recording for every real estate instrument, paper, or notice required or permitted by law to record, except those expressly exempted from payment.

GOOD FUNDS LAW
Under Section 12413.1 of the California Insurance Code, Lennar Title, Inc. may only make funds available for disbursement in accordance with the following rules:

Same day availability. Disbursement on the date of deposit is allowed only when funds are deposited to Lennar Title, Inc. by Cash or Electronic Transfer (Wire). Cash will be accepted only under special circumstances and upon approval by management.

Next business day availability. If funds are deposited to Lennar Title, Inc. by cashier's checks, certified checks or teller's checks, disbursement may be on the next business day following deposit. A “teller's check” is one drawn by an insured financial institution against another insured financial institution (e.g., a savings and loan funding with a check drawn against a FDIC insured bank).

Second business day availability. If the deposit is made by checks other than those described in paragraphs 1 and 2 above, disbursement may occur on the day when funds must be made available to depositors under Federal Reserve Regulation CC. In most cases, these checks will be available on the second business day following deposit. (For further details, consult California Insurance Code Section 12413, et seq. and Regulation CC).

These are the minimum periods before funds will be made available. Lennar Title, Inc. is not obligated to disburse funds at the expiration of the time periods above, and expressly reserves the right to require additional time before disbursing on deposited funds. Close of escrow and final disbursement will not be made based on deposits in the form of personal checks, corporate checks, credit union checks, money market checks, travelers checks and official checks until confirmation of final clearance of the funds.

Lennar Title, Inc. will not be responsible for accruals of interest or other charges resulting from compliance with the disbursement restrictions imposed by state law.

Lennar Title, Inc. charges for recording the transaction documents include charges for services performed by Lennar Title, Inc., in addition to an estimate of payments to be made to governmental agencies.

Note: The policy to be issued may contain an arbitration clause. When the Amount of Insurance is less than the certain dollar amount set forth in any applicable arbitration clause, all arbitrable matters shall be arbitrated at the option of either the Company or the Insured as the exclusive remedy of the parties. If you desire to review the terms of the policy, including any arbitration clause that may be included, contact the office that issued this Commitment or Report to obtain a sample of the policy jacket for the policy that is to be issued in connection with your transaction.

The map attached, if any, may or may not be a survey of the land depicted hereon. Lennar Title, Inc.

Prelim (CA/NV) Page 20 192002-001552
expressly disclaims any liability for loss or damage which may result from reliance on this map except to the extent coverage for such loss or damage is expressly provided by the terms and provisions of the title insurance policy, if any, to which this map is attached.

Additional Notes:

Prelim (CA/NV) Page 21 192002-001552

AFFILIATED BUSINESS ARRANGEMENT DISCLOSURE
Referring Party: Lennar Title, Inc., CalAtlantic Title, Inc., Lennar Title, LLC, or Lennar Closing Services, Inc., as applicable (“Lennar Title”)
This is to give notice that Lennar Title has a business relationship with North American Title Insurance Company (“NATIC”) and Lennar Insurance Agency, LLC (“LIA”) because Lennar Title’s parent, Lennar Title Group, LLC (“LTG”), has an indirect 20% ownership interest in NATIC’s parent company and an 80% ownership interest in LIA. Because of this relationship, this referral of services may provide Lennar Title a financial or other benefit.

Set forth below are the estimated charges or range of charges for the settlement services provided by NATIC and LIA. You are NOT required to use NATIC or LIA as a condition for closing your transaction and obtaining insurance.

THERE ARE FREQUENTLY OTHER SETTLEMENT SERVICE PROVIDERS AVAILABLE WITH SIMILAR SERVICES. YOU ARE FREE TO SHOP AROUND TO DETERMINE THAT YOU ARE RECEIVING THE BEST SERVICES AND THE BEST RATE FOR THESE SERVICES.

Title Insurance Fees
Lennar Title provides closing services and title insurance through numerous title insurance underwriters, one of which is NATIC. If NATIC is selected as the title insurer, the following fees apply:
10% - 40% of costs for lender’s and/or owner’s title insurance, as applicable, depending on the property state, and as shown on the Loan Estimate and/or Closing Disclosure provided by your lender.

Contact your local CAT representative for a more detailed title insurance quote based on your specific transaction.

Insurance
Lennar Insurance Agency, LLC (LIA) is an insurance agent that provides, among other products, homeowner’s/hazard and flood insurance. Set forth below are the estimated range of charges by LIA for the settlement services listed.

Description of Settlement Service Range of Charges - Annual Premium Homeowner’s/Hazard Insurance 0.2% - 2.5% of purchase price amount Flood Insurance 0.1% - 0.5% of purchase price amount
NOTE: The above premium ranges for homeowner’s/hazard and flood insurance are from LIA. If enhancements to the standard policy such as increased limits, scheduled articles, and/or earthquake coverage are required, the premium may increase. Actual quote and acceptance by LIA is subject to LIA’s application of their underwriting guidelines, including but not limited to verification of your credit score and previous loss history. Of course, the cost of your insurance may vary due to many factors including, without limitation, the size, location and cost of your home.

Prelim (CA/NV) Page 22 192002-001552

ACKNOWLEDGMENT
I/we have read this disclosure form, and understand that Lennar Title is referring me/us to purchase the above-described settlement service and may receive a financial or other benefit as the result of this referral.

Buyer/Borrower:

Date:

Seller:

Date:

Prelim (CA/NV) Page 23 192002-001552
LENNAR TITLE, INC.
675 Placentia Avenue, Suite 225
Brea, CA 92821
Office Phone: (949)404-2500
Office Fax: (714)667-0338
Attention:

Your Ref:

Our Order No.: 192002-001552

LENDERS SUPPLEMENTAL REPORT
Dated as of August 7, 2024 at 07:30 AM.

Title Officer: Randy Dean
The above numbered report (including any supplements or amendments thereto) is hereby modified and/or supplemented in order to reflect the following additional items relating to the issuance of an American Land Title Association loan form policy of Title Insurance:

Our ALTA Loan Policy, when issued, will contain ALTA 9-06, ALTA 8.2-08 and ALTA 22-06 There is located on said land a Commercial
Known as: Tract 37131-1, Menifee, CA
City of Menifee
County of RiversideState of California.

NOTE: According to the public records, there have been no Deeds conveying the land described herein within a period of 24 months prior to the date of this Report, except as follows:

A document recorded December 29, 2021 as Instrument No. 2021-0763084 of Official Records.

From: Lennar Homes of California, Inc., a California corporation To: AG EHC II (LEN) CA 1, L.P., a Delaware limited partnership A document recorded April 17, 2023 as Instrument No. 2023-0108589 of Official Records.

From: AG EHC II (LEN) CA 1, L.P., a Delaware limited partnership To: Lennar Homes of California, LLC, a California limited liability company Affects Lots 65 through 67, 72 through 85, 102 through 111, 150 through 152, 161 through 165, 174, 175, 177, 178, 181, 182, 184 through 188, 242 through 248, 250 through 257, 266, 267 and 272 A document recorded June 27, 2023 as Instrument No. 2023-0182824 of Official Records From: AG EHC II (LEN) CA 1, L.P., a Delaware limited partnership To: Lennar Homes of California, LLC, a California limited liability company Affects Lots 68 through 71, 112, 189 through 196, 234 through 240 and 249 A document recorded August 15, 2023 as Instrument No. 2023-0239733 of Official Records From: AG EHC II (LEN) CA 1, L.P., a Delaware limited partnership To: Lennar Homes of California, LLC, a California limited liability company Prelim (CA/NV) Page 24 192002-001552
Affects Lots 197 through 204, 241 and 274 through 280
A document recorded October 10, 2023 as Instrument No. 2023-0298583 of Official Records From: AG EHC II (LEN) CA 1, L.P., a Delaware limited partnership To: Lennar Homes of California, LLC, a California limited liability company Affects Lots 166, 167, 168, 205, 206, 207, 208, 209, 281, 282, 283, 284, 285, 286, 287 and 288 A document recorded October 10, 2023 as Instrument No. 2023-0298584 of Official Records From: AG EHC II (LEN) CA 1, L.P., a Delaware limited partnership To: Lennar Homes of California, LLC, a California limited liability company Affects Lettered Lots A through Q, T and W
A document recorded November 9, 2023 as Instrument No. 2023-0339473 of Official Records From: AG EHC II (LEN) CA 1, L.P., a Delaware limited partnership To: Lennar Homes of California, LLC, a California limited liability company Affects Lettered Lots U and EE
A document recorded November 21, 2023 as Instrument No. 2023-0349867 of Official Records From: Lennar Homes of California, LLC, a California limited liability company To: Rockport Ranch Community Association, a California non-profit mutual benefit corporation Affects Lot "O"
A document recorded December 12, 2023 as Instrument No. 2023-0368539 of Official Records From: Lennar Homes of California, LLC, a California limited liability company To: Rockport Ranch Community Association, a California non-profit mutual benefit corporation Affects Lot "N"
A document recorded December 15, 2023 as Instrument No. 2023-0372337 of Official Records From: AG EHC II (LEN) CA 1, L.P., a Delaware limited partnership To: Lennar Homes of California, LLC, a California limited liability company Affects Lots 63, 64 and 289 through 296
A document recorded January 12, 2024 as Instrument No. 2024-0012258 of Official Records From: Lennar Homes of California, LLC, a California limited liability company To: Rockport Ranch Community Association, a California non-profit mutual benefit corporation Affects Lots "T" and "EE"
A document recorded February 14, 2024 as Instrument No. 2024-0041187 of Official Records From: AG EHC II (LEN) CA 1, L.P., a Delaware limited partnership To: Lennar Homes of California, LLC, a California limited liability company Affects Lots 169 through 173, 176, 179, 180, 183 and 297 through 304 Prelim (CA/NV) Page 25 192002-001552
A document recorded February 27, 2024 Instrument No. 2024-0053194 of Official Records From: Lennar Homes of California, LLC, a California limited liability company To: Rockport Ranch Community Association, a California non-profit mutual benefit corporation Affects Lot M
A document recorded April 15, 2024 as Instrument No. 2024-0108770 of Official Records From: AG EHC II (LEN) CA 1, L.P., a Delaware limited partnership To: Lennar Homes of California, LLC, a California limited liability company Affects Lots 210, 211, 212, 213, 214, 215, 216 and 305
A document recorded April 15, 2024 as Instrument No. 2024-0108771 of Official Records From: AG EHC II (LEN) CA 1, L.P., a Delaware limited partnership To: Lennar Homes of California, LLC, a California limited liability company Affects Lettered Lots R, Y and Z
A document recorded April 17, 2024 as Instrument No. 2024-0112040 of Official Records From: Lennar Homes of California, LLC, a California limited liability company To: Rockport Ranch Community Association, a California non-profit mutual benefit corporation Affects Lot F
A document recorded June 10, 2024 as Instrument No. 2024-0167213 of Official Records From: Lennar Homes of California, LLC, a California limited liability company To: Rockport Ranch Community Association, a California non-profit mutual benefit corporation Affects Lot G
A document recorded June 14, 2024 as Instrument No. 2024-0173461 of Official Records From: AG EHC (LEN) CA 1, L.P., a Delaware limited partnership To: Lennar Homes of California, LLC, a California limited liability company Affects Lots 217, 218, 219, 220, 221, 222, 223 and 224
A document recorded July 24, 2024 as Instrument No. 2024-0219985 of Official Records From: Lennar Homes of California, LLC, a California limited liability company To: Rockport Ranch Community Association, a California non-profit mutual benefit corporation Affects Lot "H"
A document recorded August 14, 2024 as Instrument No. 2024-0243688 of Official Records From: AG EHC II (LEN) CA I, L.P., a Delaware limited partnership To: Lennar Homes of California, LLC, a California limited liability company Prelim (CA/NV) Page 26 192002-001552

Prelim (CA/NV) Page 27 192002-001552

Prelim (CA/NV) Page 28 192002-001552
CLTA Preliminary Report Form - Exhibit A (Rev. 05-06-16) CLTA STANDARD COVERAGE POLICY - 1990

EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of:

60. (a) Any law, ordinance or governmental regulation (including but not limited to building or zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating (i) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien, or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy.

61. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge.

62. Defects, liens, encumbrances, adverse claims or other matters:
(a) whether or not recorded in the public records at Date of Policy, but created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy; or (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the insured mortgage or for the estate
or interest insured by this policy.

63. Unenforceability of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy, or the inability or failure of any subsequent owner of the indebtedness, to comply with the applicable doing business laws of the state in which the land is situated.

64. Invalidity or unenforceability of the lien of the insured mortgage, or claim thereof, which arises out of the transaction evidenced by the insured mortgage and is based upon usury or any consumer credit protection or truth in lending law.

65. Any claim, which arises out of the transaction vesting in the insured the estate of interest insured by this policy or the transaction creating the interest of the insured lender, by reason of the operation of federal bankruptcy, state insolvency or similar creditors' rights laws.

EXCEPTIONS FROM COVERAGE - SCHEDULE B, PART I
This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) which arise by reason of:

1. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records.

Proceedings by a public agency which may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the public records.

2. Any facts, rights, interests, or claims which are not shown by the public records but which could be ascertained by an inspection of the land or which may be asserted by persons in possession thereof.

3. Easements, liens or encumbrances, or claims thereof, not shown by the public records.

4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and which are not shown by the public records.

5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b) or (c) are shown by the public records.

6. Any lien or right to a lien for services, labor or material not shown by the public records.

CLTA/ALTA HOMEOWNER'S POLICY OF TITLE INSURANCE (12-02-13)

EXCLUSIONS
In addition to the Exceptions in Schedule B, You are not insured against loss, costs, attorneys' fees, and expenses resulting from:

1. Governmental police power, and the existence or violation of those portions of any law or government regulation concerning:
a. building;
b. zoning;
c. land use;
d. improvements on the Land;
e. land division; and
f. environmental protection.

This Exclusion does not limit the coverage described in Covered Risk 8.a., 14, 15, 16, 18, 19, 20, 23 or 27.

2. The failure of Your existing structures, or any part of them, to be constructed in accordance with applicable building codes. This Exclusion does not limit the coverage described in Covered Risk 14 or 15.

3. The right to take the Land by condemning it. This Exclusion does not limit the coverage described in Covered Risk 17.

4. Risks:
a. that are created, allowed, or agreed to by You, whether or not they are recorded in the Public Records; b. that are Known to You at the Policy Date, but not to Us, unless they are recorded in the Public Records at the Policy Date; c. that result in no loss to You; or
d. that first occur after the Policy Date - this does not limit the coverage described in Covered Risk 7, 8.e., 25, 26, 27 or 28.

5. Failure to pay value for Your Title.

Prelim (CA/NV) Page 29 192002-001552

6. Lack of a right:
a. to any land outside the area specifically described and referred to in paragraph 3 of Schedule A; and b. in streets, alleys, or waterways that touch the Land.

This Exclusion does not limit the coverage described in Covered Risk 11 or 21.

7. The transfer of the Title to You is invalid as a preferential transfer or as a fraudulent transfer or conveyance under federal bankruptcy, state insolvency, or similar creditors' rights laws.

8. Contamination, explosion, fire, flooding, vibration, fracturing, earthquake, or subsidence.

9. Negligence by a person or an Entity exercising a right to extract or develop minerals, water, or any other substances.

LIMITATIONS ON COVERED RISKS
Your insurance for the following Covered Risks is limited on the Owner's Coverage Statement as follows:
 For Covered Risk 16, 18, 19, and 21 Your Deductible Amount and Our Maximum Dollar Limit of Liability shown in Schedule A.

The deductible amounts and maximum dollar limits shown on Schedule A are as follows:

Your Deductible Amount Our Maximum Dollar
Limit of Liability
Covered Risk 16: 1% of Policy Amount Shown in Schedule A or $2,500 $10,000 (whichever is less)
Covered Risk 18: 1% of Policy Amount Shown in Schedule A or $5,000 $25,000 (whichever is less)
Covered Risk 19: 1% of Policy Amount Shown in Schedule A or $5,000 $25,000 (whichever is less)
Covered Risk 21: 1% of Policy Amount Shown in Schedule A or $2,500 $5,000 (whichever is less)
2006 ALTA LOAN POLICY (06-17-06)

EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of:

1. (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to
(i) the occupancy, use, or enjoyment of the Land;
(ii) the character, dimensions, or location of any improvement erected on the Land; (iii) the subdivision of land; or
(iv) environmental protection;
or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5.
(b) Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6.

2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8.

3. Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed, or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11, 13, or 14);
or
(e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage.

4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applicable doing-business laws of the state where the Land is situated.

5. Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the Insured Mortgage and is based upon usury or any consumer credit protection or truth-in-lending law.

6. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction creating the lien of the Insured Mortgage, is
(a) a fraudulent conveyance or fraudulent transfer, or
(b) a preferential transfer for any reason not stated in Covered Risk 13(b) of this policy.

7. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the Insured Mortgage in the Public Records. This Exclusion does not modify or limit the coverage provided under Covered Risk 11(b).

The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage:

EXCEPTIONS FROM COVERAGE
[Except as provided in Schedule B - Part II,[ t[or T]his policy does not insure against loss or damage, and the Company will not pay costs, attorneys' fees or expenses, that arise by reason of:

Prelim (CA/NV) Page 30 192002-001552
[PART I
[The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage:

1. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public Records.

2. Any facts, rights, interests, or claims that are not shown by the Public Records but that could be ascertained by an inspection of the Land or that may be asserted by persons in possession of the Land.

3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records.

4. Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land and not shown by the Public Records.

6. Any lien or right to a lien for services, labor or material not shown by the Public Records. ]

PART II
In addition to the matters set forth in Part I of this Schedule, the Title is subject to the following matters, and the Company insures against loss or damage sustained in the event that they are not subordinate to the lien of the Insured Mortgage:] 2006 ALTA OWNER'S POLICY (06-17-06)

1. (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to
(i) the occupancy, use, or enjoyment of the Land;
(ii) the character, dimensions, or location of any improvement erected on the Land; (iii) the subdivision of land; or
(iv) environmental protection;
or the effect of any violation of these laws, ordinances, or governmental regulations. This exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5.
(b) Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6.

1. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8.

2. Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed, or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 9 and 10); or
(e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Title.

3. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction vesting the Title as shown in Schedule A, is
(a) a fraudulent conveyance or fraudulent transfer; or
(b) a preferential transfer for any reason not stated in Covered Risk 9 of this policy.

4. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the deed or other instrument of transfer in the Public Records that vests Title as shown in Schedule A.

EXCEPTIONS FROM COVERAGE
This policy does not insure against loss or damage, and the Company will not pay costs, attorneys' fees or expenses, that arise by reason of:
[The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage:

2. Any facts, rights, interests, or claims that are not shown in the Public Records but that could be ascertained by an inspection of the Land or that may be asserted by persons in possession of the Land.

3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records.

6. Any lien or right to a lien for services, labor or material not shown by the Public Records.

7. [Variable exceptions such as taxes, easements, CC&R's, etc. shown here.] Prelim (CA/NV) Page 31 192002-001552
ALTA EXPANDED COVERAGE RESIDENTIAL LOAN POLICY - ASSESSMENTS PRIORITY (04-02-15)

1. (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to (i) the occupancy, use, or enjoyment of the Land; (ii) the character, dimensions, or location of any improvement erected on the Land; (iii) the subdivision of land; or
(iv) environmental protection;
or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5, 6, 13(c), 13(d), 14 or 16. (b) Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 5, 6, 13(c), 13(d), 14 or 16.

2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8.

3. Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed, or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11, 16, 17, 18, 19, 20, 21, 22, 23, 24, 27 or 28); or
(e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage.

4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applicable doing-business laws of the state where the Land is situated.

5. Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the Insured Mortgage and is based upon usury, or any consumer credit protection or truth-in-lending law. This Exclusion does not modify or limit the coverage provided in Covered Risk 26.

6. Any claim of invalidity, unenforceability or lack of priority of the lien of the Insured Mortgage as to Advances or modifications made after the Insured has Knowledge that the vestee shown in Schedule A is no longer the owner of the estate or interest covered by this policy. This Exclusion does not modify or limit the coverage provided in Covered Risk 11.

7. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching subsequent to Date of Policy. This Exclusion does not modify or limit the coverage provided in Covered Risk 11(b) or 25.

8. The failure of the residential structure, or any portion of it, to have been constructed before, on or after Date of Policy in accordance with applicable building codes. This Exclusion does not modify or limit the coverage provided in Covered Risk 5 or 6.

9. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction creating the lien of the Insured Mortgage, is
(a) a fraudulent conveyance or fraudulent transfer, or
(b) a preferential transfer for any reason not stated in Covered Risk 27(b) of this policy.

10. Contamination, explosion, fire, flooding, vibration, fracturing, earthquake, or subsidence.

11. Negligence by a person or an Entity exercising a right to extract or develop minerals, water, or any other substances.

Addenda
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Addendum D
Comparable Data
Addenda
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Land Sales - North Shore at Rockport Ranch

Land Sale Profile Sale No. 1
Location & Property Identification
ES Leon Rd., SO Domenigoni
Pkwy.

Property Name:

Sub-Property Type: Residential, Single Family
Development Land
ES Leon Rd., SO Domenigoni
Pkwy.

Address:

Winchester, CA 92596 City/State/Zip:

Riverside County:

Suburban Market Orientation:

IRR Event ID: 3204058
Sale Information
$21,000,000 Sale Price:
$21,000,000 Effective Sale Price:
01/30/2024 Sale Date:

Sale Status: In-Contract
$/Acre(Gross): $247,642
$/Land SF(Gross): $5.69
$/Building SF: $2,916.67
$115,385 /Unit $/Unit (Potential):

Grantor/Seller: GM Gabrych Family LP /
Genus LP / Empire
Communities
Grantee/Buyer: N/Av.

Property Rights: Fee Simple
Financing: Cash to seller
Conditions of Sale: Arm's-length
Recording No.: N/Av.

Verified By: Noah Kauffman, MAI, R/W-AC
Verification Date: 02/22/2024
Verification Type: Confirmed-Seller Broker
Sale Analysis
Expenditures After Purchase: $141,209
Expenditures Description: Lot finishing costs
Other Adjustment: $2,000
Adjustment Comments: No district was in place
but a bond is
anticipated for the
project.

Improvement and Site Data
461-410, 461-411, 461-412,
461-430, 461-431, 461-432,
461-420, 461-421, 461-440,
461-441, & 461-190-087
Legal/Tax/Parcel ID:

84.80 Acres(Gross):
3,693,888 Land-SF(Gross):

Potential Building SF:
7,200
No. of Units (Potential): 182
Zoning Code: SP
Zoning Desc.: Specific Plan
Source of Land Info.: Public Records
Comments
This is the pending sale of 182 final mapped lots on 84.8 total acres. The lots will be delivered in blue-top condition.

Additional estimated costs for a finished lot total $141,209 per lot. A bond district had not yet been created for the property but was anticipated for the project. Given surrounding
projects also utilize bond financing, it is
ES Leon Rd., SO Domenigoni Pkwy.

Land Sale Profile Sale No. 1
Comments (Cont'd)
estimate the property would have an estimated special tax of $2,000 per lot.

ES Leon Rd., SO Domenigoni Pkwy.

Land Sale Profile Sale No. 2
Location & Property Identification
Stratford Place II - East Property Name:

Sub-Property Type: Residential, Single Family
Development Land
Evans Rd. Address:

Perris, CA 92571 City/State/Zip:

Riverside County:

Suburban Market Orientation:

IRR Event ID: 3269038
Sale Information
$13,186,466 Sale Price:
$13,186,466 Effective Sale Price:
10/01/2023 Sale Date:

Sale Status: Closed
$/Acre(Gross): $13,186,466
$/Land SF(Gross): $302.72
$/Building SF: $2,197.74
$123,238 /Unit $/Unit (Potential):

Grantor/Seller: Stratford Ranch Associates,
LLC
Grantee/Buyer: Pulte Homes
Assets Sold: Real estate only
Property Rights: Fee Simple
% of Interest Conveyed: 100.00
Financing: Cash to seller
Conditions of Sale: Arm's-length
Document Type: Deed
Verification Type: Secondary Verification
Sale Analysis
Expenditures After Purchase: $104,762
Expenditures Description: Site development and
permits and fees
Other Adjustment: $3,000
Adjustment Comments: Bond encumbrance
Improvement and Site Data
302-362-012 Legal/Tax/Parcel ID:

1.00 Acres(Gross):
43,560 Land-SF(Gross):

Potential Building SF: 6,000
No. of Units (Potential): 107
Zoning Code: R-6,000
Zoning Desc.: Residential
Source of Land Info.: Other
Comments
This is a sale 107 unimproved lots with a typical lot size of 6,000 square feet. The finished lot price is estimated at $225,000 per lot. A building permit is estimated at $3,000 per lot. It is unclear if the project will utilize bond financing.

However, given the surrounding projects also utilize bond financing, it is estimated the property would have an
estimated special tax of $3,000 per lot.

Stratford Place II - East

Land Sale Profile Sale No. 3
Location & Property Identification
Green Valley Ranch PA 12 Property Name:

Sub-Property Type: Residential, Single Family
Development Land
Green Valley Pky. Address:

Perris, CA 92585 City/State/Zip:

Riverside County:

Suburban Market Orientation:

IRR Event ID: 3269087
Sale Information
$11,795,535 Sale Price:
$11,795,535 Effective Sale Price:
09/01/2023 Sale Date:

Sale Status: Closed
$/Acre(Gross): $236,383
$/Land SF(Gross): $5.43
$/Building SF: $1,814.70
$61,757 /Unit $/Unit (Potential):

Grantor/Seller: Green Valley Recovery
Acquisition, LLC
Grantee/Buyer: Lennar
Assets Sold: Real estate only
Property Rights: Fee Simple
% of Interest Conveyed: 100.00
Financing: Cash to seller
Conditions of Sale: Arm's-length
Document Type: Deed
Verification Type: Secondary Verification
Sale Analysis
Expenditures After Purchase: $141,243
Expenditures Description: Site development costs
and permits and fees
Other Adjustment: $2,000
Adjustment Comments: Bond encumbrance
Improvement and Site Data
330-150-031 Legal/Tax/Parcel ID:

49.90 Acres(Gross):
2,173,644 Land-SF(Gross):

Potential Building SF: 6,500
No. of Units (Potential): 191
Zoning Code: GV-SP R-5,500 - R-6,000
Zoning Desc.: Residential
Source of Land Info.: Public Records
Comments
This is a sale of 191 unimproved lots with a typical lot size of 6,500 square feet. The finished lot price is estimated at $200,000 per lot. A building permit is estimated at $3,000 per lot. It is unclear if the project will utilize bond financing.

However, given the surrounding projects also utilize bond financing, it is estimated the property would have an
estimated special tax of $2,000 per lot.

Green Valley Ranch PA 12

Land Sale Profile Sale No. 4
Location & Property Identification
Stratford Place II Property Name:

Sub-Property Type: Residential, Single Family
Development Land
Evans Rd. Address:

Perris, CA 92571 City/State/Zip:

Riverside County:

Suburban Market Orientation:

IRR Event ID: 3014316
Sale Information
$4,906,500 Sale Price:
$4,906,500 Effective Sale Price:
11/01/2022 Sale Date:

Sale Status: Closed
$/Acre(Gross): $208,079
$/Land SF(Gross): $4.78
$/Building SF: $817.75
$54,517 /Unit $/Unit (Potential):

Grantor/Seller: Stratford Ranch Investors LLC
Grantee/Buyer: Pulte Home Company LLC
Assets Sold: Real estate only
Property Rights: Fee Simple
% of Interest Conveyed: 100.00
Financing: Cash to seller
Conditions of Sale: Arm's-length
Document Type: Deed
Recording No.: 2022.451354
Verified By: Blake Fassler
Verification Date: 06/07/2023
Verification Type: Confirmed-Other
Sale Analysis
Expenditures After Purchase: $175,483
Expenditures Description: Site Improvements and
permits and fees
Other Adjustment: $2,983
Adjustment Comments: Bond Encumbrance
Improvement and Site Data
302-150-049 Legal/Tax/Parcel ID:

23.58 Acres(Gross):
1,027,145 Land-SF(Gross):

Potential Building SF: 6,000
No. of Units (Potential): 90
Zoning Code: R-6,000
Source of Land Info.: Public Records
Comments
This is a sale of 90 unimproved lots with a tentative map in place and a typical lot size of 6,000 square feet. The lots were purchased for $4,906,500 or $54,517. According to the broker, the lots were purchased at a finished lot price of $230,000 per lot. The buyer is developing the 270 lots adjacent to the north of this project. It is assumed there was a degree of assemblage influencing a part of the sale, but this was not confirmed. It is estimated this project will have a similar degree of bond debt as the adjacent project, which has an estimated $2,983 per lot.

Stratford Place II

Land Sale Profile Sale No. 5
Location & Property Identification
Windsong Property Name:

Sub-Property Type: Residential, Single Family
Development Land
NWQ Alessandro Blvd. and
Darwin Dr.

Address:

Moreno Valley, CA 92555 City/State/Zip:

Riverside County:

Suburban Market Orientation:

IRR Event ID: 3022274
Sale Information
$7,500,000 Sale Price:
$7,500,000 Effective Sale Price:
08/01/2022 Sale Date:

Sale Status: Closed
$/Acre(Gross): $210,438
$/Land SF(Gross): $4.83
$/Acre(Usable): $210,438
$/Land SF(Usable): $4.83
$/Building SF: $1,500.00
$42,373 /Approved Lot $/Unit (Potential):

Grantor/Seller: Winco Holdings, Inc &
Equitable Moreno Valley II
Partnership
Grantee/Buyer: D.R. Horton
Property Rights: Fee Simple
% of Interest Conveyed: 100.00
Financing: Cash to seller
Document Type: Deed
Recording No.: 2022.0341934 &
2022.0340965
Verification Type: Secondary Verification
Secondary Verific. Source: Deed, Tellus Land & Capital
Sale Analysis
Expenditures After Purchase: $197,345
Expenditures Description: Lot finishing costs
Other Adjustment: $2,000
Adjustment Comments: Estimated bond
encumbrance
Improvement and Site Data
487,470-025 (ptn),
487-470-028, 487-574-001 &
002
Legal/Tax/Parcel ID:

35.64/35.64 Acres(Usable/Gross):
1,552,478/1,552,478 Land-SF(Usable/Gross):

Usable/Gross Ratio: 1.00
Potential Building SF: 5,000
No. of Units (Potential): 177
Corner Lot: Yes
Utilities: Electricity, Water Public,
Sewer, Gas, Telephone
Source of Land Info.: Public Records
Comments
This sale encompasses two adjacent parcels purchased by D.R.

Horton from two different sellers. D.R. Horton closed on the first 18.01-acre parcel for $3,755,000 on August 1, 2022 and closed on the second 17.63-acre parcel for $3,745,000 on August 2, 2022. The site will be developed into a 177-lot subdivision called Windsong. Floor plans will
Windsong

Land Sale Profile Sale No. 5
Comments (Cont'd)
range from 1,898 to 2,537 square feet and the typical lot size will be approximately 5,000 square feet. Finishing costs are estimated at approximately $197,345 per lot. It is unclear if the project will utilize bond financing. However, given surrounding projects also utilize bond financing, it is estimate the property would have an estimated special tax of $2,000 per lot.

Windsong

Land Sale Profile Sale No. 6
Location & Property Identification
La Ventana Property Name:

Sub-Property Type: Residential, Single Family
Development Land
SEC Simpson Rd and La
Ventana Rd
Address:

Winchester, CA 92584 City/State/Zip:

Riverside County:

Suburban Market Orientation:

IRR Event ID: 3027571
Sale Information
$8,000,000 Sale Price:
$8,000,000 Effective Sale Price:
04/15/2022 Sale Date:

Recording Date: 04/15/2022
Listing Price: $8,000,000
Sale Status: Closed
$/Acre(Gross): $103,896
$/Land SF(Gross): $2.39
$/Building SF: $1,333.33
$36,364 /Approved Lot $/Unit (Potential):

Grantor/Seller: La Ventana 242, LLC
Grantee/Buyer: Forestar / DR Horton
Assets Sold: Real estate only
Property Rights: Fee Simple
% of Interest Conveyed: 100.00
Exposure Time: 39 (months)
Financing: Cash to seller
Conditions of Sale: Arm's-length
Document Type: Deed
Recording No.: 0180333
Verification Type: Secondary Verification
Secondary Verific. Source: CoStar
Sale Analysis
Expenditures After Purchase: $178,636
Expenditures Description: Lot finishing costs
Other Adjustment: $2,000
Adjustment Comments: Estimated bond
encumbrance
Improvement and Site Data
MSA: Riverside-San
Bernardino-Ontario, CA
Metropolitan Statistical Area
APNs: 461-450-001
through -013, -451-001
through -048, -452-001
through -019, -460-001
through -020, -461-001
though -021, -470-001
through -027, -470-001
through -064, -472-001
through -010, -480-001
through -005, -481-001
through -003, -482-001
Legal/Tax/Parcel ID:

77.00 Acres(Gross):
3,354,120 Land-SF(Gross):

Potential Building SF:
6,000
No. of Units (Potential): 220
Zoning Code: SP
Zoning Desc.: Specific Plan
La Ventana

Land Sale Profile Sale No. 6
Improvement and Site Data (Cont'd)
Flood Plain: No
Source of Land Info.: Broker
Comments
Site consists of 220 residential lots, along with a park site and a school site. The typical lot size is approximately 6,000 SF.

The finished lot price was reportedly $215,000/lot. It is unclear if the project will utilize bond financing. However, given surrounding projects also utilize bond financing, it is estimate the property would have an estimated special tax of $2,000 per lot.

La Ventana

Land Sale Profile Sale No. 7
Location & Property Identification
Pleasant Valley Ranch Property Name:

Sub-Property Type: Residential, Single Family
Development Land
Linden Flower Rd. Address:

Winchester, CA 92596 City/State/Zip:

Riverside County:

Suburban Market Orientation:

IRR Event ID: 3040256
Sale Information
$15,728,000 Sale Price:
$15,728,000 Effective Sale Price:
08/31/2021 Sale Date:

Sale Status: Closed
$/Acre(Gross): $786,400
$/Land SF(Gross): $18.05
$/Building SF: $2,169.38
$77,861 /Unit $/Unit (Potential):

Grantor/Seller: Watermarke Homes
Grantee/Buyer: DR Horton Los Angeles
Holding Inc
Assets Sold: Real estate only
Property Rights: Fee Simple
% of Interest Conveyed: 100.00
Financing: Cash to seller
Conditions of Sale: Arm's-length
Document Type: Deed
Verified By: Blake Fassler
Verification Date: 08/22/2023
Verification Type: Confirmed-Buyer
Sale Analysis
Expenditures After Purchase: $150,861
Expenditures Description: Site development costs
and permits and fees
Other Adjustment: $2,688
Adjustment Comments: Bond Encumbrance
Improvement and Site Data

20.00 Acres(Gross):
871,200 Land-SF(Gross):

Potential Building SF: 7,250
No. of Units (Potential): 202
Zoning Code: R-1
Zoning Desc.: Residential
Source of Land Info.: Public Records
Comments
This is a sale of 202 paper lots with a typical lot size of 7,250 square feet for $77,861 per lot. The lots included the sale of five partially completed models that were constructed prior to the Great Recession in 2007. The backstory to the project was not given; however, it appears one of the previous owners of the project tried to develop the property and later abandon it.

The prior models on the property were demolished by DR
Horton and the site development to improve the lots was estimated at $15,400,862 or $76,242 per lot. Permits and fees are estimated at $73,000 per lot, while special taxes are estimated at $2,688 per lot.

Pleasant Valley Ranch
Addenda
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Land Sales - West Shore at Rockport Ranch

Land Sale Profile Sale No. 1
Location & Property Identification
Riverwalk Village Property Name:

Sub-Property Type: Residential, Single Family
Development Land
Bradley Rd. Address:

Menifee, CA 92586 City/State/Zip:

Riverside County:

Suburban Market Orientation:

IRR Event ID: 3270380
Sale Information
$22,077,500 Sale Price:
$22,077,500 Effective Sale Price:
12/06/2023 Sale Date:

Sale Status: Closed
$/Acre(Gross): $1,508,026
$/Land SF(Gross): $34.62
$/Building SF: $9,812.22
$111,503 /Unit $/Unit (Potential):

Grantor/Seller: Crp / Cwr River Walk Project
LLC
Grantee/Buyer: Richmond American Homes /
MD Inc
Assets Sold: Real estate only
Property Rights: Fee Simple
% of Interest Conveyed: 100.00
Financing: Cash to seller
Conditions of Sale: Arm's-length
Document Type: Deed
Verification Type: Secondary Verification
Sale Analysis
Expenditures After Purchase: $118,735
Expenditures Description: Site development costs
and permits and fees
Other Adjustment: $2,000
Adjustment Comments: Bond encumbrance
Improvement and Site Data
338-150-046 and -031 Legal/Tax/Parcel ID:

14.64 Acres(Gross):
637,718 Land-SF(Gross):

Potential Building SF: 2,250
No. of Units (Potential): 198
Zoning Code: MDR
Zoning Desc.: Medium Density Residential
Source of Land Info.: Public Records
Comments
This is a sale of 198 lots in unimproved condition. The lots are configured in an 8-pack courtyard cluster and have several community amenities. Based on the density of the project, the typical lot size is estimated at 2,250 square feet. The finished lot is estimated at $225,338 per lot. A building permit is estimated at $4,900 per lot. The project is utilizing special taxes; however, the exact annual payment is unclear.

Therefore, based on the surrounding projects an annual
special tax is estimated at $2,000 per lot.

Riverwalk Village

Land Sale Profile Sale No. 2
Location & Property Identification
Alessandro Property Name:

Sub-Property Type: Residential, Single Family
Development Land
Alessandro Blvd. Address:

Moreno Valley, CA 92555 City/State/Zip:

Riverside County:

Suburban Market Orientation:

IRR Event ID: 3246636
Sale Information
$16,143,500 Sale Price:
$16,143,500 Effective Sale Price:
11/30/2023 Sale Date:

Recording Date: 12/04/2023
Sale Status: Closed
$/Acre(Gross): $873,566
$/Land SF(Gross): $20.05
$/Building SF: $5,381.17
$71,749 /Unit $/Unit (Potential):

Grantor/Seller: Gpalessandro LLC
Grantee/Buyer: Taylor Morrison Of California
Assets Sold: Real estate only
Property Rights: Fee Simple
% of Interest Conveyed: 100.00
Financing: Cash to seller
Conditions of Sale: Arm's-length
Document Type: Deed
Recording No.: 2023.359986
Verification Type: Secondary Verification
Sale Analysis
Expenditures After Purchase: $131,516
Expenditures Description: Site development and
building permit
Other Adjustment: $2,000
Adjustment Comments: Estimated bond
encumbrance
Improvement and Site Data
487-470-022 Legal/Tax/Parcel ID:

18.48 Acres(Gross):
804,989 Land-SF(Gross):

Potential Building SF: 3,000
No. of Units (Potential): 225
Zoning Code: DC
Zoning Desc.: Downtown Center
Source of Land Info.: Public Records
Comments
This is a sale of 225 tentatively mapped lots with a typical lot size of 3,000 square feet. The lots will be developed into clusters; however, it is unclear the exact layout. The finished lot price is estimated at $201,265 per lot. A building permit is estimated at $2,000 per lot. It is unclear if the project will utilize bond financing. However, given the surrounding
projects also utilize bond financing, it is estimated the property would have an estimated special tax of $2,000 per lot.

Alessandro

Land Sale Profile Sale No. 3
Location & Property Identification
27550 Brodiaea Avenue Property Name:

Sub-Property Type: Residential, Single Family
Development Land
27550 Brodiaea Ave. Address:

Moreno Valley, CA 92555 City/State/Zip:

Riverside County:

Suburban Market Orientation:

IRR Event ID: 3246647
Sale Information
$2,800,055 Sale Price:
$2,800,055 Effective Sale Price:
07/01/2023 Sale Date:

Sale Status: Closed
$/Acre(Gross): $319,277
$/Land SF(Gross): $7.33
$/Building SF: $777.79
$41,792 /Unit $/Unit (Potential):

Grantor/Seller: Discovery Christian Church Of
Moreno Valley
Grantee/Buyer: DR Horton Los Angeles
Holding
Assets Sold: Real estate only
Property Rights: Fee Simple
% of Interest Conveyed: 100.00
Financing: Cash to seller
Conditions of Sale: Arm's-length
Document Type: Deed
Verification Type: Secondary Verification
Sale Analysis
Expenditures After Purchase: $137,877
Expenditures Description: Site development and
building permit
Other Adjustment: $2,000
Adjustment Comments: Estimated bond
encumbrance
Improvement and Site Data
486-240-010 Legal/Tax/Parcel ID:

8.77 Acres(Gross):
382,021 Land-SF(Gross):

Potential Building SF: 3,600
No. of Units (Potential): 67
Zoning Code: R5
Zoning Desc.: Suburban Residential
Source of Land Info.: Public Records
Comments
This is a sale of 67 tentatively mapped lots with a typical lot size of 3,600 square feet. The finished lot price is estimated at $177,669 per lot. A building permit is estimated at $2,000 per lot. It is unclear if the project will utilize bond financing.

However, given the surrounding projects also utilize bond financing, it is estimated the property would have an
estimated special tax of $2,000 per lot.
27550 Brodiaea Avenue

Land Sale Profile Sale No. 4
Location & Property Identification
Towns & Courts Property Name:

Sub-Property Type: Residential, Single Family
Development Land
Domenigoni Pky. Address:

Winchester, CA 92596 City/State/Zip:

Riverside County:

Suburban Market Orientation:

IRR Event ID: 3246654
Sale Information
$17,500,000 Sale Price:
$17,500,000 Effective Sale Price:
04/01/2022 Sale Date:

Sale Status: Closed
$/Acre(Gross): $825,083
$/Land SF(Gross): $18.94
$/Building SF: $7,000.00
$69,444 /Unit $/Unit (Potential):

Grantor/Seller: Regent
Grantee/Buyer: Taylor Morrison / California
LLC
Assets Sold: Real estate only
Property Rights: Fee Simple
% of Interest Conveyed: 100.00
Financing: Cash to seller
Conditions of Sale: Arm's-length
Document Type: Deed
Verification Type: Secondary Verification
Sale Analysis
Expenditures After Purchase: $82,556
Expenditures Description: Site development and
building permit
Other Adjustment: $2,000
Adjustment Comments: Estimated bond
encumbrance
Improvement and Site Data
461-220-39 and -040 Legal/Tax/Parcel ID:

21.21 Acres(Gross):
923,908 Land-SF(Gross):

Potential Building SF: 2,500
No. of Units (Potential): 252
Zoning Code: SP
Zoning Desc.: Specific Plan
Source of Land Info.: Public Records
Comments
This is a sale of 252 lots in bluetop condition. The project will be developed as 124 townhomes and 128 cluster lot homes.

Based on the density of the project, the typical lot size is estimated at 2,500 square feet. The finished lot is estimated at $150,000 per lot. A building permit is estimated at $2,000 per lot. The project is utilizing special taxes; however, the exact annual payment is unclear. Therefore, based on the
surrounding projects an annual special tax is estimated at $2,000 per lot.

Towns & Courts

Land Sale Profile Sale No. 5
Location & Property Identification
SWC Leon Rd & Simpson Rd Property Name:

Sub-Property Type: Residential, Single Family
Development Land
SWC Leon Rd & Simpson Rd Address:

Winchester, CA 92596 City/State/Zip:

Riverside County:

Suburban Market Orientation:

IRR Event ID: 3027023
Sale Information
$8,000,000 Sale Price:
$8,000,000 Effective Sale Price:
02/15/2022 Sale Date:

Recording Date: 02/15/2022
Listing Price: $10,000,000
Sale Status: Closed
$/Acre(Gross): $111,142
$/Land SF(Gross): $2.55
$/Land SF(Usable): $2.55
$/Building SF: $2,666.67
$19,048 /Approved Lot $/Unit (Potential):

Grantor/Seller: Ranchos Property & Rancon
Grantee/Buyer: BRPLD LLC
Assets Sold: Real estate only
Property Rights: Fee Simple
% of Interest Conveyed: 100.00
Exposure Time: 37 (months)
Financing: Cash to seller
Conditions of Sale: Arm's-length
Document Type: Deed
Recording No.: 0076695
Verification Type: Secondary Verification
Secondary Verific. Source: CoStar
Sale Analysis
Expenditures After Purchase: $132,952
Expenditures Description: Site development costs
and building permit
Other Adjustment: $2,000
Adjustment Comments: Bond encumbrance
Improvement and Site Data
MSA: Inland Empire
Parcel Numbers: 460-150-019,
461-150-006
Legal/Tax/Parcel ID:

71.98 Acres(Gross):
3,135,448/3,135,448 Land-SF(Usable/Gross):

Potential Building SF: 3,000
No. of Units (Potential): 420
Zoning Code: SP
Zoning Desc.: Specific Plan
Flood Plain: No
Flood Zone Designation: X
Source of Land Info.: Public Records
Comments
Property sold with a recorded final map for 420 single family lots. The site also includes two future parks. The estimated lot size is 3,000 square feet. The brokers estimates a finished lot value of $150,000 per lot. A building permit within the unincorporated area of Winchester is estimated at $2,000 per lot. It is unclear if
SWC Leon Rd & Simpson Rd

Land Sale Profile Sale No. 5
Comments (Cont'd)
the project will utilize bond financing. However, given the surrounding projects also utilize bond financing, it is estimated the property would have an estimated special tax of $2,000 per lot.

SWC Leon Rd & Simpson Rd

Menifee City CouncilNovember 6, 2024

Menifee City Council
November 6, 2024