Agenda packet, second session — Menifee City Council, April 15, 2026 (part 6 of 6)

Banner Park II
Pulte Ownership (73 lots & 25 houses) $ 27,128,607 Individual Owners (84 houses) 54,675,720
Total Aggregate Value Menifee CFD No. 2024-1 $ 81,804,327

The above values are stated subject to the Assumptions and Limiting Conditions of this report, the Appraiser’s Certification and as of February 16, 2026.

Some supporting documentation concerning the data, reasoning and analyses may be retained in the appraiser’s files. The information contained in this report is specific to the needs of the client and for the intended use stated in this report. This Appraisal Report is intended to comply with both the Uniform Standards of Professional Appraisal Practice (“USPAP” January 2022) and with the Appraisal Standards of the California Debt and Investment Advisory Commission (“CDIAC”). The appraiser is not responsible for unauthorized use of this report. The appraised value contained within this report is being estimated with the hypothetical condition of the special tax lien of the 2026 series of Menifee CFD No. 2024-1 bonds.

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

Respectfully submitted,

KITTY SIINO & ASSOCIATES, INC.

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

Assumptions and Limiting Conditions............................................................................... i Hypothetical Condition .................................................................................................... iii Extraordinary Assumption ............................................................................................... iii Aerial Photo of Menifee CFD No. 2024-1 ........................................................................ iv Purpose of the Appraisal ................................................................................................ 1 The Subject Property ...................................................................................................... 1 Intended Use of the Report ............................................................................................ 3 Definitions ...................................................................................................................... 3 Property Rights Appraised ............................................................................................. 5 Effective Date of Value ................................................................................................... 5 Date of Report ................................................................................................................ 5 Scope of Appraisal ........................................................................................................ 6 Regional Area Map.......................................................................................................... 8 County of Riverside Area Description ............................................................................. 9 Menifee Area Map ......................................................................................................... 18 City of Menifee Description ........................................................................................... 19 Specific Plan 158 and Immediate Surroundings ............................................................ 23 Community Facilities District No. 2024-1 ....................................................................... 26 Subject Property Description ......................................................................................... 29 Riverside County Housing Market ................................................................................. 36 Highest and Best Use Analysis ..................................................................................... 48 Valuation Analyses and Conclusions ............................................................................ 53 Appraisal Report Summary ........................................................................................... 71 Appraiser’s Certification ............................................................................................... 72

ADDENDA
CFD No. 2024-1 Boundary Map
Tract Map Nos. 37671-1, 37671-2 and 37671 (no dash)
Menifee General Plan High Fire Map
Discounted Cash Flow Analyses
Residential Land Sales Map and Summary Chart
Improved Residential Sales Map and Summary Chart
Appraiser’s Qualifications
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ASSUMPTIONS AND LIMITING CONDITIONS

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

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

3. The property is appraised subject to the special tax lien of the 2026 series of bonds for City of Menifee CFD No. 2024-1.

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

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

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

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

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

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

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

11. Any sketch included in this report may show approximate dimensions and is included only to assist the reader in visualizing the properties. Maps and exhibits found in this report are provided for reader reference purposes only. No guarantee regarding accuracy is expressed or implied unless otherwise stated in this report. No survey has been made for the purpose of this report.

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

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

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

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

16. The Americans with Disabilities Act (“ADA”) became effective on January 26, 1992.

The appraiser has made no specific compliance survey and analysis of the property to determine whether they conform to the various detailed requirements of the ADA, nor is the appraiser a qualified expert regarding the requirements of the ADA. It is possible that a compliance survey of the property, together with a detailed analysis of the requirements of the ADA, could reveal that the property is not in compliance with one or more of the requirements of the ADA. If so, this fact could have a negative effect upon the value of the property. Since the appraiser has no direct evidence relating to this issue, a possible noncompliance with requirements of the ADA in estimating the value has not been considered.

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

18. Possession of this report, or a copy thereof, does not carry with it the right of publication. It may not be used for any purpose by any person other than the party to whom it is addressed without the written consent of the appraiser, and in any event, only with proper qualification and only in its entirety. Permission is given for this appraisal to be published as a part of the Official Statement or similar document in association with the Menifee CFD No. 2024-1 2026 series Special Tax Bonds.

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HYPOTHETICAL CONDITION

1. It is assumed that all improvements and/or benefits to the subject property, which are to be funded by the 2026 series of the Menifee CFD No. 2024-1 Special Tax Bond proceeds, are completed and in place or have accrued to the property.

EXTRAORDINARY ASSUMPTION

1. It is an extraordinary assumption that the reported sales and remaining land development costs as received from the builder are true and accurate. We have reviewed both the sales and cost information and they appear reasonable. We have reviewed sample sales against public records in order to verify the sample sales, however we have not reviewed each sale against public record. Additionally, we are not experts in cost estimating and if the cost estimates change, it may change the value conclusions.

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PURPOSE OF THE APPRAISAL

The purpose of this appraisal report is to estimate the value of the fee simple interest of the subject property, subject to the special tax lien of the City of Menifee CFD No. 2024- 1, 2026 Series Special Tax Bonds.

THE SUBJECT PROPERTY

The subject property is located at the southwest corner of Domenigoni Parkway and Briggs Road along the eastern border of the City of Menifee. The subject is encompassed by Menifee CFD No. 2024-1 and is proposed for 182 single-family detached homes spread over three tract maps (Tract Map Nos. 37671, 37671-1 and 37671-2) being built out as Banner Park II. Pulte Homes built out the original community known as Banner Park which is located across Domenigoni Parkway from Banner Park II. Within the new area known as Banner Park II, Pulte is now building and selling homes within three product lines: Heritage, Merit and Crest. Heritage consists of 66 proposed homes; Merit consists of 55 proposed homes; and Crest consists of 61 proposed homes, for a total of 182 proposed homes. As of the date of value of this report, Banner Park II (including all three product lines) has a total of 84 completed homes closed to individuals, six model homes, 19 production homes over 95 percent complete (14 in escrow), 28 houses under construction (15 in escrow), and 45 additional finished lots (five in escrow). On the following page is a more detailed table showing the status and ownership of the lots Item Title: 12.1
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Description No. Lots Owner Condition/Status
Heritage
Lots 7-8, 15-18, 26, 28, 30, 32-34, 36-
37, 39-41, 43-45 of Tract 37671-1; Lots
8-10, 12-13, 48-49, 57, 61-62 and 75-
77 of Tract 37671-2

33 Individuals

Completed Homes
Lots 1-2 of Tract 37671-1 2 Pulte Model Homes (0 in
escrow)
Lots 24, 26-28, 43, 51, 58, 64, 66 and
68 of Tract 37671-2
10 Pulte Over 95% Complete (9 in
escrow)
Lots 15-16, 19, 21-22, 29 and 31 of
Tract 37671-2; Lot 28 and 34 of Tract
37671

9 Pulte
Under Construction (5 in
escrow
Lot 1 of Tract 37671-2; Lots 4-5, 8-9,
15-16, 22, 25-26, 39-40 of Tract 37671.

12 Pulte Finished Lots (3 in escrow)
Heritage Subtotal 66
Merit
Lots 9-11, 19-21, 35, 46-48 and 51 of
Tract 37671-1; Lots 2, 4-7, 11, 44, 50,
53 and 71-74 of Tract 37671-2

24 Individuals

Completed Homes
Lots 3-4 of Tract 37671-1 2 Pulte Model Homes
Lots 25, 40, 52, 63, 65 and 67 of Tract
37671-2
6 Pulte Over 95% Complete (3 in
escrow)
Lots 14, 17-18, 30 and 33-34 of Tract
37671-2 and Lot 33 of Tract 37671.

7 Pulte

Under Construction (3 In
escrow)
Lots 2-3, 13-14, 20, 37-38, 41-48 and
53 of Tract 37671.
16 Pulte Finished Lots (1 in escrow)
Merit Subtotal 55
Crest
Lots 12-14, 22-25, 27, 29, 31, 38, 42,
49-50 of Tract 37671-1; Lots 3, 41-42,
45-47, 54-56, 59-60, 69 and 78 of Tract
37671-2

27 Individuals

Completed Homes
Lots 5-6 of 37671-1 2 Pulte Model Homes
Lots 38-39 and 70 of Tract 37671-2 3 Pulte Over 95% Complete (2 in escrow)
Lots 20, 23, 32 and 35-37 of Tract
37671-2; Lots 29-32 and 35-36 of Tract
37671

12 Pulte

Under Construction (7 in
escrow)
Lot 1, 6-7, 10-12, 17-19, 21, 23-24, 27,
and 49-52 of Tract 37671.
17 Pulte Finished Lots (1 in escrow)
Crest Subtotal 61
Menifee CFD No. 2024-1 Total 182
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INTENDED USE OF THE REPORT

It is the appraiser’s understanding that the client, the City of Menifee, will utilize this report in disclosure documents associated with selling the first series of bonds for Menifee CFD No. 2024-1 and that this report is to be included in the Official Statement or similar document to be distributed in connection with the offering of the bonds. It is the appraiser’s understanding that there are no other intended uses of this report.

DEFINITIONS

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

1. buyer and seller are typically motivated;

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

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

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

5. the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.”1

Inherent in the Market Value definition is exposure time or the time the property would have had to have been exposed on the open market prior to the appraisal in order to sell at the concluded values. In the case at hand and considering current market conditions the exposure time for the builder-owned lots and houses or for an individually owned home is under six months.

1 The Appraisal of Real Estate, 13th Edition
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Minimum Market Value
The term “Minimum Market Value” as used in this report is defined as:
“The base market value of a home. That is, most buyers purchase some upgrades, options and/or lot premiums when purchasing a new home. The sales price for the new home typically includes the base price for the plan, plus any upgrades, options or lot premiums, less concessions, if any, which were given or paid for by the builder. The concluded minimum market value is for the base value of the plan only, not taking into consideration any upgrades, options or premiums; however, does take into consideration concessions given by the builder.”
Mass Appraisal
The term “Mass Appraisal” as used in this report is defined as:
“The process of valuing a universe of properties as of a given date using standard methodology employing common data and allowing for statistical testing”2

In the case at hand, the statistical testing included reviewing all original builder sales, reviewing the Multiple Listing Service for re-sales and current escrows (if any) and determining the actual range of sales and escrow prices for each plan type which is utilized in the valuation process.

Hypothetical Condition
The term “Hypothetical Condition” is defined by USPAP as:
“That which is contrary to what exists but is supposed for the purpose of the analysis”

The Hypothetical Condition within this report is that subject property is enhanced by the improvements and/or fee credits to be funded by bonds issued by the 2026 series of bonds for Menifee CFD No. 2024-1.

Extraordinary Assumption
The term “extraordinary assumption” is defined by USPAP as:
“An assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser’s opinions or conclusion”

2 USPAP 2020-2021 Edition
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The first extraordinary assumption in this report is that the reported sales information and remaining land development cost information, as received from the builder, are true and accurate. We have reviewed the sales information and verified samples against public record information; however, all sales have not been verified through public record. In addition, we have reviewed the costs and they appear reasonable; however, we are not experts in the field of cost estimating. It should be noted that these costs were relied upon in the valuation of the subject properties and if the actual costs differ, it could alter the value conclusions.

PROPERTY RIGHTS APPRAISED

The property rights being appraised are of a fee simple interest, subject to easements of record and both series of Menifee CFD No. 2024-1 bonds. The definition of “fee simple estate” is defined by USPAP as:
“absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.”

EFFECTIVE DATE OF VALUE

The subject property is valued as of February 16, 2026.

DATE OF REPORT

The date of this report is March 12, 2025.

SCOPE OF APPRAISAL

As previously stated, the purpose of this appraisal is to report the appraiser’s best estimate of the market value for the subject properties. This appraisal will be presented in the following format:
 County of Riverside Description
 City of Menifee Description
 Specific Plan 158 and Immediate Surroundings
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 Brief Description of City of Menifee CFD No. 2024-1
 Subject Property Description
 Riverside County Housing Market Discussion
 Highest and Best Use Analysis
 Valuation Procedures, Analyses and Conclusions
 Appraisal Report Summary

The subject property consists of 182 proposed single-family houses within three contiguous tract maps being built out into three communities. Between the three communities there are 84 homes completed and closed to individuals, six models, 19 homes over 95 percent complete (14 in escrow), 28 homes under construction (15 in escrow), and 45 generally finished lots (five in escrow). In valuing the subject property, the value estimates will be based upon the highest and best use conclusion using the Sales Comparison Approach. The Sales Comparison Approach to value is defined as:
“…a set of procedures in which a value indication is derived by comparing the property being appraised to similar properties that have been sold recently, then applying appropriate units of comparison and making adjustments to the sale prices of the comparables based on the elements of comparison. The sales comparison approach may be used to value improved properties, vacant land, or land being considered as though vacant; it is the most common and preferred method of land valuation when an adequate supply of comparable sales is available.”3

In the Sales Comparison Approach, market value is estimated by comparing properties similar to the subject property that have recently been sold, are listed for sale or are under contract. Along with the Sales Comparison Approach, a Discounted Cash Flow Analysis is considered for the builder-owned existing homes. Due to the number of homes under a single ownership, a bulk value is needed in order to determine the current market value.

Neither a cost nor income approach was utilized as they were not considered necessary to arrive at credible results.

The due diligence of this appraisal assignment included the following:

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

2. Gathered and analyzed information on the subject marketplace, reviewed several real estate brokerage publications on historical and projected growth in the subject market

3Dictionary of Real Estate Appraisal, 4th Edition, 2002 Item Title: 12.1
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3. Inspected the subject property between January 15, 2026, and February 16, 2026.

4. Had the property flown for an aerial photograph on February 12, 2026.

5. Interviewed representatives from the builder to obtain available information on the subject property.

6. Reviewed a Preliminary Title Report on the subject property.

7. Reviewed the City of Menifee General Plan Land Use Map, Zoning Map, tentative map/site plan and recorded Tract Maps regarding entitlements and allowances on the subject site.

8. Reviewed the Menifee Valley Specific Plan No. 158 along with the Amendments to the Specific Plan.

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

10. Reviewed sales brochures and sales information on each of the subject neighborhoods.

11. Reviewed actual builder sales information on all closed homes and current escrows for each neighborhood.

12. Reviewed Multiple Listing Service (“MLS”) information on re-sales and current listings of existing homes within City of Menifee CFD No. 2024-1.

13. Inspected the subject property for any for-sale or property listing signs that may not be listed on the MLS yet.

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REGIONAL AREA MAP

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COUNTY OF RIVERSIDE AREA DESCRIPTION

Location
The subject property is located in the southwestern portion of Riverside County (the “County”) east of I-215 at the southwest corner of Newport Road/Domenigoni Parkway at Briggs Road within the city limits near the eastern border of the City of Menifee (“City”).

The County encompasses approximately 7,300 square miles, and includes large expanses of undeveloped deserts, valleys, canyons, and mountains. The County is a major beneficiary of outward urban pressure from Orange and Los Angeles Counties as well as growth from San Diego County to the south. Although located at the periphery of most urban activity in Southern California, Riverside County, particularly the western area, has been a major growth area and is perceived by most observers as an area expected to continue to grow. Riverside and San Bernardino Counties are considered distinct from Los Angeles and Orange Counties and belong to the same Metropolitan Statistical Area (“MSA”). This area, consisting of San Bernardino and Riverside Counties, is commonly referred to as the Inland Empire.

Transportation
The subject property is situated northeast of I-15, east of I-215, along the south side of Domenigoni Parkway (known as Newport Road to the west) near the eastern border of the City. I-15 travels in a generally northerly/southerly direction and provides access to Barstow and Nevada to the north and San Diego to the south. The intersection of Highway 74 and I-15 is about ten miles directly west of the subject. Highway 74 provides access to the west into Orange County on what is also known as Ortega Highway and access to the east into the cities of Perris and Hemet. Interstate 215 is approximately 2 miles west, travels in a northerly/southerly direction within the County, branching off from I-15 and heading generally north where it parallels I-15 to the east and merges back into I-15 approximately 40 miles northwest of the subject in San Bernardino County. In addition, the 60 Freeway runs in an east-west direction approximately 20 miles north of the subject providing access into Los Angeles County to the west and merges with Interstate 10 to the east which provides access across California and into Arizona.

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The County is served by Amtrak and Metrolink as well as several rail freight lines. The Ontario International Airport provides regional air service and is located approximately 35 miles northwest of the subject property while the Orange County Airport is located approximately 40 miles west and the San Diego International Airport is located about 65 miles south. In addition, the County has extensive trucking corridors along the previously referred to interstates, highways, and state freeways.

0.2 percent following three years of decreasing population statewide. Current State projections for Riverside County suggest the population is anticipated to reach approximately 2.533 million by 2030, indicating an average annual increase of approximately 0.26 percent over the next five years. The forecasted population for 2030 was reduced from an estimated 0.7 percent annual growth rate over the past year. Future growth is predicted assuming a more stable market than was seen prior to the Great Recession.

Economy
The U.S. economy in the past five years has experienced challenging times due to reactions from the COVID disruption and changes in the federal administration. These economic challenges include significant inflation, volatile interest rates, banks’ instability, the unknowns on tariff agreements and reaching an agreement on the debt ceiling which shut down the government for 43 days ending November 12, 2025.

During COVID, the Federal, State, County and City Governments (“Governments”) originally shut down non-essential businesses and areas where social gatherings occur Item Title: 12.1
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in order to slow the spread of the virus. This created a strain on small and large businesses alike. Restaurants and hotels were hit hard and travel reduced drastically as citizens were urged to stay home. Layoffs occurred with reports of 40 million people filing for unemployment in the first few months of the pandemic. The Governments attempted to curtail the job losses and hardships with the approval of over $5.6 trillion in COVID relief to our nation. In addition, the Federal Reserve Board (“Board”) reduced interest rates and started quantitative easing by buying bonds. This legislation helped shore up the U.S. economy; however, due to the significant amount of new money introduced into the economy, inflation began occurring at a rate not seen for 40 years. In June 2022 the national inflation rate hit a peak of 9.1 percent with the current (January 2026) rate at 2.4 percent. This compares to a 1.4 percent annual inflation rate for 2020, a 4.7 percent annual rate for 2021, a 8.0 percent annual rate for 2022, a 4.1 percent annual rate for 2023, a 2.9 percent annual rate for 2024 and a 2.7 percent annual rate of 2025. This compares to an average of 1.74 percent annual rate for 2010 until 2020. Whether it was a result of world turmoil, supply chain issues due to the COVID disruption, additional money entering the economy or tariffs, inflation hit Americans hard.

In an effort to curb inflation, the Board began raising interest rates. Between March 2022 and August 2023, there were eleven interest rate increases rising the Federal Funds Rate (“FFR”) from 0.25 – 0.50 percent to 5.25 – 5.50 percent. The Board kept rates at 5.25 –

5.50 percent from September 2023 until September 2024 with three decreases occurring through December 2024, ending with the rate at 4.25 – 4.50 percent. This rate continued until September, October and December 2025, with three decreases bringing the current FFR to 3.50 – 3.75 percent. In the first Board meeting of 2026, they kept the rate steady as they are closely watching all signs of the economy and do not want to create additional inflation. While the eleven increases appeared to help slow inflation, the quick, significant increases strained bank balance sheets and created significant volatility on home mortgages. The FFR increases which occurred between March 2022 and August 2023, increased a typical 30-year fixed mortgage rate from 2.98 percent as of November 10, 2021, to the high of 7.79 percent as of October 2023; however, the rate has dropped to

6.1 percent as of January 29, 2026 (per Federal Reserve Economic Data-St. Louis) with mortgage rates generally between 6.0 and 6.5 percent since October 2025. This steep Item Title: 12.1
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increase which occurred in mortgage interest rates significantly affected the real estate market. The first-time homebuyer pool grew up thinking interest rates were always sub- four percent and are still reeling from shock over the recent 6.0 to 7.0 percent rates. In order to combat the unaffordability of these higher rates, many homebuilders however, have been “buying down” the mortgage rates in order to keep new home sales going.

This will be discussed further in the Riverside County Housing Market section later within this report.

On October 1, 2025, the US government shut down due to the government being unable to reach agreement on a spending plan. The main issue was the extension of health care subsidies which began during the COVID pandemic due to healthcare costs skyrocketing.

After a 43-day shutdown, an agreement was reached which extended money for most federal agencies until January 30, 2026, along with funding for food aid, the Department of Agriculture, Congress and veterans affairs until September 2026. While the government is again open and working, it appears there may be an additional partial shutdown as Congress cannot agree on Department of Homeland Security funding. No long-term decisions have been reached.

The COVID disruption to the economy also caused extreme volatility in the stock market with the Dow Jones Industrial Average (“DJIA”) dropping from 29,398 in February 2020 to 19,174 in March 2020, a drop of 37 percent. The Government interventions resulted in a bounce back in the DJIA to 27,111 by June 2020 with the stock market then climbing up to a peak of 36,799 in January 2022. In February 2022, Russia began invading Ukraine which caused volatility in world economics followed by U.S. inflation resulting in a 20 percent drop to a low on September 30, 2022 (28,150) with a bounce back to between 33,000 and 34,000 throughout the majority of 2023. On October 7, 2023, Israel declared war on Hamas which added to the strain causing another drop of around eight percent with the low on October 27, 2023, to 32,417. The FFR rate increases began helping to stabilize the economy (reducing inflation) to a point where analysts began predicting decreases in the FFR in 2024. This occurred in late 2024 with three reductions which buoyed the stock market with a new high of 44,910 which was reached in late 2024. In 2025 the stock market saw volatility due to the new administration’s uncertain tariffs (hit Item Title: 12.1
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annual low of 38,315 in April), followed by a generally steady increase mostly due to the NASDAQ (tech heavy index) increasing about 50 percent, partially due to the race for Artificial Intelligence (“AI”). As of January 29, 2026, the DJIA is at 48,967, near the all- time high of 49,590 on January 12, 2026. It should be noted that the dollar has weakened with gold and silver at or near all-time highs. Current concerns on the U.S. economy include the nation’s debt, global wars, tariff uncertainties and the debt limit which can only be increased through government approvals.

The significant increase in mortgage rates between 2022 and 2023 is just one part of the puzzle affecting the impact of new housing on the broader economy. Additional risks include homebuilders trying to find balanced inventory levels, supply chain issues, both wage and price increases, unknown tariffs on building materials, construction workers immigration status, the affordability index at all-time lows and persistent inflation. Over the past 25 years, the Inland Empire economy saw significant cycles with home prices almost doubling from 1995 to 2005, then falling by over 50 percent during the Great Recession, taking prices back to 2002 levels in 2011. Home values appeared to hit bottom in 2009 then remained essentially flat for two to three years with the majority of the Inland Empire housing market seeing an improvement beginning in mid-2012. Contrary to homebuilders’ original thoughts of a slowdown due to the pandemic, new home buyers stepped up in the spring of 2020 and new home sales were significantly higher during the second half of 2020 versus the previous year and continued extremely strong throughout 2021. This exceptional activity in new home sales was the one bright spot in the COVID recession and is thought to be due to several factors, including: a tight supply of resale homes; historically low interest rates; millennials finally buying homes; and the work from home factor which began during the pandemic and allowed residents to live in more suburban areas without long commutes. As rates began increasing in early 2022, there was a significant slowdown in home sales within the Inland Empire, with year-over-year decreases in home listings of about 30 percent between October 2022 and October 2023 as homeowners did not want to give up their low-interest mortgages. The scarcity of existing home listings put pressure on pricing as the demand for homes continued with median home prices in the Inland Empire increasing about 50 percent from 2019 levels.

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It should be noted; however, the increase in pricing has slowed substantially with some indexes reporting a slight decrease over the past year.

While most jobs have come back, job losses were significant during the COVID recession as the Nation’s unemployment rate went from 3.5 percent in February 2020 to 14.4 percent in April 2020 with decreases through the fall season of 2020. Since that time the national unemployment rate generally ranged between 3.5 percent and 4.5 percent between December 2021 and today with the December 2025 National unemployment rate at 4.4 percent. The unemployment rate for the MSA was estimated at 5.1 percent (as of December 2025, per the Employment Development Department). This reflects a decrease from the peak during the Great Recession of 15.1 percent in 2010 and a decrease from the peak during COVID of 14.9 percent. As of December 2025, Riverside County’s unemployment rate was 5.2 percent and San Bernardino County had a 5.0 percent unemployment rate. The current unemployment rate for the MSA of 5.1 percent is the same as the California rate at 5.1 percent and higher than the December 2025 National rate of 4.4 percent. Below is a table comparing Riverside County’s unemployment rate to the unemployment rates of the surrounding counties as of December 2025.

Jurisdiction As of Unemployment Rate*
Los Angeles County Dec-2025 5.0%
Riverside County Dec-2025 5.2%
San Bernardino County Dec-2025 5.0%
Orange County Dec-2025 3.9%
San Diego County Dec-2025 4.4%
Source: State of California E.D.D.; *Not Seasonally Adjusted The latest UCLA Anderson Forecast (“Forecast”) was issued December 3, 2025, with conflicting information as AI-driven investment continues to fuel growth however they state tariffs, immigration policy and weak labor markets are restraining momentum across key sectors. They anticipate a US economy which is expected to soften through the first quarter of 2026 before regaining strength later in the year. The AI-related investment was originally estimated at $250 billion in 2025 had surpassed $405 billion in December with further increases expected in 2026. Offsetting this, employment growth has slowed sharply, they predict inflation to peak at 3.5 percent in early 2026, driven by pass-throughs Item Title: 12.1
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from earlier tariff hikes. Overall GDP growth is anticipated to soften in early 2026, partly due to the temporary effects from the federal government shutdown, however later in 2026, GDP growth is expected to rebound.

California’s economy continues to outpace the nation's in high-productivity sectors such as AI, aerospace and advanced manufacturing. Nearly 70 percent of all U.S. venture funding in early 2025 went to California and seven of the ten largest investment deals in the Americas in 2025 occurred in-state. This strength masks a growing divide as construction, non-durable goods manufacturing, retail and leisure and hospitality remain under pressure from federal spending reductions, tariffs, elevated costs and the early effects of deportation policies. Payroll job losses through the first eight months of 2025 (latest available at time of the Forecast) marked the first sustained decline since the pandemic. Housing remains a significant constraint within the State. Building permits have stayed subdued despite the elevation in home prices and the urgent need for new construction following the December 2024 and January 2025 wildfires. Workforce shortages tied to deportations, tariff-driven input costs and persistently high financing costs all contribute to slow progress in residential building. Goods movement offers a bright spot as air cargo volume is reflecting steady demand in higher-income households and businesses linked to the state’s technology sector. The Forecast calls for a gradual improvement beginning in late 2026 with unemployment rates averaging 5.5 percent in 2025, 5.5 percent in 2026 and 4.6 percent in 2027, employment growth at 0.6 percent in 2025, 0.7 percent in 2026 and 2.0 percent in 2027. Higher interest rates, shortages of construction labor and the rebuilding of damaged and destroyed homes lowered the residential construction forecast which is now anticipated to be 101,000 new permits in 2025 and grow to 121,000 by the end of 2027. These permit estimates are significantly down from the June 2024 Forecast when they anticipated 155,000 new homes in 2025.

One unexpected bright spot which occurred during the COVID pandemic was the increase in the sales of new homes as millennials finally entered the housing market, renters wanted their own space, and the work from home factor allowed workers to live further from their office. As interest rates rose in 2022, existing homeowners didn’t want to give up their sub-four percent mortgages, so existing home listings slowed substantially _________________________________________________________________________________________________________ Menifee CFD No. 2024-1 (Banner Park II) - 2026 Series Bonds Item Title: 12.1
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which further increased new home sales. While new homes historically captured 10–13 percent of total home sales; over the past few years, new homes captured 25-30 percent of total home sales.

As a final indicator of overall economic activity for the region, we have reviewed the rise and fall of TEUs (Twenty-foot Equivalent Units – i.e., containers) being processed in the local ports. This is especially important for the Inland communities, as it represents much of the growth in development of West Coast distribution centers and warehouses in the Inland Empire linked to supply-chain nodes in the Pacific Rim. The chart below shows TEU activity at the Port of Long Beach. Generally, there had been increases since 2009 except for slight dips in 2016, 2019, 2022 followed by an over 12 percent dip in 2023 due to cooling consumer demand. The calendar year 2024 saw an over 20 percent increase while in 2025 there was a 2.5 percent increase, back to a typical overall trendline.

Government

A Board of Supervisors oversees the County as the governing body of the County, certain County special districts, and the County Housing Authority. The Supervisors enact ordinances and resolutions, adopt the annual budget, approve contracts, and appropriate funds, determine land use zoning for unincorporated areas, and appoint certain County officers and members of various boards and commissions. The Board of Supervisors is elected from five different districts within the County.

4.05.06.07.08.09.010.011.0'09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 25TEU's (millions)YearPort of Long Beach TEUs Item Title: 12.1
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Education
Menifee Union School District (K thru 8th) and the Perris Union High School District serve the subject area. The Menifee Union School District operates 11 elementary schools and four middle schools, one K-8 school (Harvest Hill STEAM Academy), two alternative schools and one preschool. Perris Union High School District covers a larger area than Menifee Union and operates five high schools, four alternative high schools and one alternative middle school to serve the greater Perris area including Menifee. Higher education is available within an hour’s drive at the University of California campuses at Riverside and Irvine or California State University campuses in San Bernardino, San Marcos, Fullerton, and Pomona along with several additional private colleges. The closest community college is Mt. San Jacinto College, which has a campus in Menifee.

Conclusion
Population in the County has increased over the past 20 years with predictions for continued population growth. The Nation’s economy has been slowing after the Federal Reserve Board increased the Federal Funds Rate over five percent to fight historical inflation which began during COVID. One bright spot during COVID was housing; the region’s relative affordability and low interest rates, coupled with the rising prices in the coastal market and the demand for housing, set up a new housing boom in the Inland Empire. This was followed by a significant drop in existing home sales due to existing homeowners being unwilling to give up their low-rate mortgages, which turned out to be a boon for new homes. Current concerns for the Inland Empire economy include the unknowns of the new Administration, inflation, the high prices of homes, mortgage interest rates, supply chain issues and labor, along with world conflicts, which are all creating volatility in both local and global financial markets. In conclusion, the County is expected to continue to grow in population due to its Southern California location, the availability of land, and the relatively lower land and housing prices in comparison to adjacent Orange, Los Angeles, and San Diego Counties.

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MENIFEE AREA MAP

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CITY OF MENIFEE DESCRIPTION

The subject property is situated along the east border in the central portion of the City of Menifee, which is located in the southwestern portion of the County. Menifee became a city in October 2008 after voting to incorporate. Menifee was the 26th city within the County of Riverside and is located along both sides of I-215 between Murrieta and Perris.

The City includes the diverse lifestyle communities of Menifee, Sun City, Quail Valley, and portions of Romoland. The City is bordered by unincorporated lands and the City of Murrieta to the south, the cities of Lake Elsinore and Canyon Lake to the west, the City of Perris, area of Winchester and unincorporated lands to the north and unincorporated lands (portion known as the French Valley and portion known as Winchester) to the east.

In the 1960s, early development of the Menifee Valley began when the concept of an active retirement community was envisioned for Sun City. Since that time the Menifee Valley has grown substantially. At incorporation in 2008, the City of Menifee had a total population of 60,000 residents. The Menifee Valley includes some portions of Romoland that are not included within the city limits. Although this area currently serves as a bedroom community for the workforces of North San Diego County, Temecula, Riverside, Corona and Orange County, economic development groups are in the process of recruiting future quality employers to relocate in the Menifee Valley. Per the City’s website, the “Business Friendly” City is investing more than $484 million in infrastructure and traffic improvement projects over the next five years. There have been many new commercial developments in the past 15 years on the I-215 corridor south of McCall Boulevard. In addition, there are about twenty residential projects either under construction or in planning or engineering with Legado (proposed for 1,022 new homes) and Underwood (543 new homes) at McCall and I-215, Menifee Valley (1,718 residential units) at Matthews and Briggs, Salt Creek (325 proposed units) at Briggs and Simpson, the Menifee Village SPA Amendment to increase residential units, Banner Park II (subject property), Rockport Ranch (305 units), Nautical Cove (239 proposed units) and 394 proposed units in the Cantalena Specific Plan. This list includes only the larger (150 or more units) developments on the east side of I-215 in Menifee, which total over 4,500 Item Title: 12.1
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Between 1990 and 2003, there was an extraordinary growth rate of 48 percent in the community of Menifee. The population is estimated at 115,316 as of January 2025 per the California Department of Finance (most recent available), representing a growth of

1.3 percent year-over-year. This compares to the Riverside County past year’s growth of

0.2 percent from January 2024 to January 2025. The City’s higher growth rate than the County is due to the wide expanses of land available for development within the city, and because of the currently selling planned communities such as Cimarron Ridge (Pulte), Ladera (KB Home) and Quartz Trail (Lennar) west of I-215 and east of I-215 is Legado (Lennar), Banner Park II (subject – Pulte) and Nautical Cove (KB Home). Additionally, just outside of the city limits to the east in the unincorporated area of Winchester there is Acadia (Beazer), La Ventana (DR Horton), Creekstone (KB Home), Leon Ridge (Beazer), The Woods (Richmond American and Foremost) and Outlook (TriPointe) while in the French Valley area (south of Winchester) there are Canterwood (DR Horton and KB Home) and Brevarde (Richmond American).

In the past 15 years Menifee has had exceptional growth in the commercial and retail sector. Prior to the Great Recession several shopping centers were either constructed or planned. Included are the Town Center Marketplace, which is anchored by Aldi Market, PetSmart, and several national restaurants (located at the southwest corner of Haun and Newport Roads), and the popular Menifee Countryside Marketplace, which is anchored by Target, Lowe’s, Kohls, Ulta, TJ Maxx, Best Buy and Home Goods along with numerous restaurants (located at the southwest quadrant of I-215 and Newport Road). The Town Center Specific Plan (“TCSP”) includes 170 acres of mixed use with a proposed City Hall, a Fairfield Inn & Suites by Marriott on Town Center Drive, the Family and Civil Courthouse, along with several completed new home neighborhoods and Riverwalk Village at Town Center by Richmond American which is currently selling. The Krikorian retail center and partially completed theaters were demolished in 2025 after several years of litigation. Aside from the Krikorian theater, other new commercial development has proceeded with both Center Pointe (retail northwest of the theaters) and Menifee Plaza Item Title: 12.1
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(retail northeast of theaters), which front Newport Road, opening in 2025. Along the north side of Newport at Haun Road is a newer commercial area that houses the Menifee Union School District’s administration building, the existing City Hall, a Post Office, and several national chain restaurants.

The Menifee community also benefits from its proximity to Diamond Valley Lake, which was dedicated on March 18, 2000, and initially filled by the end of 2002. Diamond Valley Lake is located approximately five miles east of the City and is a 13,000-acre site with a 4,500-acre reservoir for boating and fishing. There is no swimming, water skiing or personal watercraft allowed in Diamond Valley Lake. The reservoir contains 800,000 acre-feet (260 billion gallons) of water and is owned by the Metropolitan Water District.

Access to Diamond Valley Lake is via Newport Road, which becomes Domenigoni Parkway near the subject site.

Land prices in the Menifee area have been historically lower than prices in the Murrieta and Temecula areas. As housing prices increased during the COVID disruption, the price difference narrowed between Menifee and Murrieta/Temecula, however, there is still a variance. The price difference appears to be due to the Murrieta/Temecula area being along the I-15 corridor, which commands a premium due to easier commuting to adjacent counties. Menifee is located along the I-215 corridor, which creates a slightly longer commute to employment centers.

As discussed under the economy section under County of Riverside Area Description, new home sales had prospered during the COVID pandemic and Menifee is no exception.

Per the January 25, 2026, Ryness Report (a new home sales tracking and research company), there are 45 new home projects currently selling in the South Riverside submarket with 19 of the 45 new home projects located in Menifee. This compares to 45 new home projects within the South Riverside submarket selling one year ago, however only 15 in Menifee, suggesting Menifee is a strong market with new home communities opening in the past year. The average sales rate per project for the week ending January 25, 2026, in the South Riverside submarket was 3.85 homes per month which is the same as the same week in 2025. In comparing the South Riverside Submarket with the overall Item Title: 12.1
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Inland Empire, the average sales rate per project year to date as of January 25, 2026, the sales rate per month was 3.0 sales while the average 2025 sales rate per project was also 3.0 sales per month.

In summary, the future growth of Menifee should continue. While there are four more new home communities in the city compared to one year ago, several have sold out and closed and new communities have opened. Additionally, there are a significant number of new home communities in the planning stages, suggesting population growth. Housing is less expensive than the Murrieta/Temecula neighboring communities, which is attractive to homebuyers as price points are important in today’s Inland Empire housing market.

Diamond Valley Lake is another asset to the Menifee Valley area. The lower land prices and the availability of land for development combine to make Menifee an excellent candidate for future growth.

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SPECIFIC PLAN 158 AND IMMEDIATE SURROUNDINGS

The subject property is located within Riverside County Specific Plan 158 which was originally approved in 1982 and covered a good portion of the east side of the city of Menifee which is east of I-215. Below is an outline with the subject property identified by the red star.

Specific Plan 158 is bounded by I-215 to the west and generally Briggs Road near the subject to the east with Newport Road/Domenigoni Parkway dividing the north and south sections. The original proposed development consisted of 1,977 acres that combined residential, commercial, recreation and open space uses allowing for 5,344 dwelling units.

Specific Plan 158 had several amendments over the years with the latest being Amendment No. 5 in 2004 which identifies the subject property as Planning Area 4-6 which is slated for Medium Density Residential and has an allowance of a maximum of 197 dwelling units at an average density of 3.9 dwelling units per acre.

The subject site is located at the southwest corner of Briggs Road and Domenigoni Parkway in the central easternmost portion of the City of Menifee. The project has access from I-215, east on Newport Road (changes to Domenigoni near the subject) to Airborne Drive (at terminus of Lindenberger Road, about 1.75 miles from the offramp). The immediate area is made up of existing homes to the north (Banner Park I), west (Menifee Item Title: 12.1
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Lakes) and south (Tierra Shores) and a large vacant hilly parcel to the east beyond which is the beginning of the Winchester unincorporated area. The subject site’s east boundary is also the existing eastern border of the City of Menifee.

Beyond Banner Park I to the north is a new planned residential development (Meritage Homes recently purchased which is known as Salt Creek) and the master planned community known as Heritage Lakes which is all existing residences. Beyond Tierra Shores to the south is a portion of Menifee Lakes along with a mobile home park called Thousand Trails and a new residential tract being developed by KB Home which is currently selling called Nautical Cove. Menifee Lakes is one of the original master planned communities within the City with the lands north of Newport Road developed in the 1980s – 1990s and includes the Menifee Lakes Country Club and golf course and the portion south of Newport Road developed in the 2000s. The unincorporated Winchester area to the east began land development around 2006 with the great recession stopping all development as the cost to develop the land was more than the land was worth. Once the economy recovered, it took a while for the Winchester area to begin development again with one of the first residential developments being at the southwest corner of Leon and Domenigoni Parkway, less than one-quarter mile east of the subject when DR Horton began selling homes in 2021. Since that time there has been 15 to 20 new residential neighborhoods which have been developed or are currently selling along Domenigoni Parkway, in the Winchester area.

The nearest shopping center is available about one-half mile west at a Stater Bros. anchored neighborhood shopping center at the southeast corner of Newport and Menifee Roads. At the same intersection there is a major drug store along with in-line stores and several fast-food restaurants. More regional shopping is available within two miles west at the southwest quadrant of I-215 and Newport Road at Countryside Marketplace which is anchored by Home Goods, Lowe’s Home Improvement, Target and Kohls along with many national restaurant chains. In addition, there is an Aldi supermarket across from the Countryside Marketplace beyond which is Menifee Town Center with a new Sprouts Farmers Market. Approximately twelve miles south is Promenade Temecula, a major shopping mall anchored by Macy’s and JC Penney, located off the I-15 near the Item Title: 12.1
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intersection of I-15 and Winchester Road (State Route 79). In addition to the aforementioned shopping and entertainment, the community is about two miles east of the Mt. San Jacinto College, five miles northeast of the new Kaiser Permanente facility and six miles northeast from the Loma Linda University Medical Center in Murrieta.

The subject property is located within the Menifee Union School District (K-8th) and the Perris Union High School District (9th -12th). The community is served by Liberty High School, about three miles south; Bell Mountain Middle School located about 1.5 miles southwest of the subject; and Southshore Elementary School about 1.3 miles south of the subject property.

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Menifee CFD No. 2024-1 (Banner Park II) was formed per the Resolution of Intention of the City Council of the City of Menifee dated June 19, 2024. Per the City of Menifee CFD No. 2024-1 CFD Report, the CFD is comprised of approximately 81 gross acres anticipated to include 182 residential properties at buildout. Menifee CFD No. 2024-1 is consistent with Tract Map Nos. 37671-1, 37671-2 and 37671 (no dash) which cover 182 proposed single-family detached residential properties (subject property). The boundary map is shown below with a larger version located in the Addenda.

Per the CFD Report prepared by Spicer Consulting Group and dated August 7, 2024, the types of facilities that are proposed by Menifee CFD No. 2024-1 consist of the construction, purchase, modification, expansion, rehabilitation and/or improvement of (i) drainage, library, park, street, roadway, traffic signal and street lights, administration and general government facilities, animal shelter facilities, fire and safety and other public facilities of the City including the foregoing public facilities which are included in the City’s fee programs with respect to such facilities and authorized to be financed under the Mello- Roos Commmunity Facilities Act of 1982, as amended (the “City Facilities”); (ii) water and sewer facilities including the acquisition of capacity in the sewer system and/or water Item Title: 12.1
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system of the Eastern Municipal Water District which are included in EMWD’s water and sewer capacity and connection fee programs (the “Water District Facilities”) and (iii) interim and permanent school facilities of the Menifee Union School District, including classrooms, multi-purpose facilities, administration and auxiliary space at school facilities, athletic fields, playgrounds and recreational facilities and improvements thereto, landscaping, access roadways, drainage, sidewalks and gutters and utility lines, furniture, equipment and technology, including technology upgrades and mobile devices and infrastructure therefore, with a useful life of at least five (5) years at such school facilities (the “School Facilities”), and (iv) electrical utility undergrounding and dry utilities (the “Utilities” and together with the City Facilities, the Water Facilities, and the School Facilities shall be referred to as the “Facilities”), and all appurtenances and appurtenant work in connection with the foregoing Facilities, including the cost of engineering, planning, designing, materials testing, coordination, construction staking, construction management and supervision for such Facilities. In addition, incidental expenses include the cost of engineering, planning and designing the Facilities; and all costs including costs of the property owner petitioning to form the District, associated with the creation of the District, the issuance of the bonds, the determination of the amount of special taxes to be levied and costs otherwise incurred in order to carry out the authorized purposes of the District and any other expenses incidental to the construction, acquisition, modification, rehabilitation, completion and inspection of the Facilities.

According to the CFD Report, the Cost Estimate of the eligible facilities is $10,145,000 based on fiscal year 2024-25 dollars with $1,358,543 in City Fees, $6,664,922 in City Facilities, $833,558 in Eastern Municipal Water District fees, no Menifee Union School District fees and $1,287,977 in incidental financing costs. It is the appraiser’s understanding that the bonds will be issued in two series, and this appraisal is for the first series of bonds. Per the CFD Report, the Assigned Special Tax within Menifee CFD No. 2024-1 ranges from $2,952 to $3,699 per year per single family residence depending on the square footage of the home. All of the above assigned special taxes are based on 2024-25 dollars and shall increase by two percent of the amount each July 1, commencing July 1, 2025.

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Per the latest sources and uses of funds for the first series of bonds for Menifee CFD No. 2024-1 (Banner Park II) dated March 11, 2026, they are projecting a bond par amount of $5,750,000 along with a premium of $63,180 totaling $5,813,180. The expenditures include $4,965,708 of project fund deposits, a debt service reserve fund of $496,222 and costs of issuance and underwriter’s discount totalling $351,250 (all estimated amounts subject to change).

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SUBJECT PROPERTY DESCRIPTION

The subject property consists of 182 proposed single-family homes within the community known as Banner Park II being developed by Pulte. The 182 lots are divided among three tract maps and include three single-family detached neighborhoods within the Banner Park II community: Heritage, Merit and Crest. Below is a map showing all of Banner Park II, including all three tracts and communities. The red outline (lower left third) refers to Tract 37671-1, the blue outline (upper third) refers to Tract 37671-2 and the area with no outline (lower right) refers to Tract 37671 (no dash).

Location: Southwest corner of Domenigoni Parkway and Briggs Road, Menifee, California

Legal Description: Lots 1-51 of Tract No. 37671-1; Lots 1-78 of Tract No. 37671-2; and Lots 1-53 of Tract 37671 (no dash), all located in City of Menifee, County of Riverside, California.

Owner of Record: Individual owners as to Lots 7-51 of Tract 37671-1 and Lots 2-13, 41-42, 44-50, 53-57, 59-62, 69 and 71-78 of Tract 37671-2.

Pulte Home Company LLC as to Lots 1-6 of Tract 37671-1; Lots 1, 14-40, 43, 51-52, 58, 63-68 and 70 of Tract 37671-2 and Lots 1-53 of Tract 37671 (no dash).

Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 252

Menifee Mayor and City Council
April 15, 2026
Page
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Three-Year
Sales History: Pulte Home Company, LLC purchased the Banner Park II site on January 19, 2024, from Diamond Brothers Five Partnership L.P. for $8,500,000 based on an estimated finished lot price of $235,000 at the time. The property closed in an unimproved condition, with tract maps ready to record. As of February 16, 2026, 84 of the completed homes have closed escrow to individual homebuyers.

Assessor’s Parcel
Numbers: The subject 182 lots encompass Assessor’s Parcel 340-680-001 thru 002; 340-681-001 thru 045; 340-690-001 thru 004; 340-690-006 thru 013; 340-691-001 thru 026; 340-692-009 thru 016; 340-700-001 thru 024; 340-701-001 thru 012; 340-710-001 thru 031; 340-711-001 thru 022. Formerly the subject property was known as various parcels on APNs 340-58, 340-59, 340-60 and 340-61.

Property Taxes: We were unable to review the Riverside County Tax Collector’s 2025 tax bill for the subject APNs. It appears they are in the process of changing from the original APNs to the new parcel numbers as shown above. It is the appraiser’s understanding that the subject homes will have overall tax rates in the 1.90 – 2.00 percent range which is typical for new homes in the subject market area.

Flood Zone: Per FEMA Flood Map 06065C2060H effective August 18, 2014, the subject site is shown as Flood Hazard Zone X (minimal flood hazard).

Size and Shape: The neighborhood is triangular in shape and includes 49.36 gross acres and 33.40 net acres per the three recorded Tract Maps. The difference between the gross and net acreages reported above includes internal streets, two park/open space lots and several open space/landscaping lots that also serve as drainage areas, surrounding streets and setback areas.

Zoning: Per the City of Menifee Land Use Map, the subject site is shown as the Menifee Village Specific Plan No. 158 which was adopted by Riverside County in 1982 with the most recent amendment (Amendment No. 5) approved in 2004 which designates the subject property as Planning Area 4-6 and allows for up to 197 residential units with an overall density of at most, 3.9 dwelling units per acre.

Entitlements: The subject property is covered by Tract Map Nos. 37671-1, 37671- 2 and 37671 (no dash), all recorded August 21, 2024. The maps are detailed in the table below.

Tract No. Gross Ac. Net Ac. No. Lots Density
37671-1 12.10 8.89 51 4.21
37671-2 24.62 14.43 78 3.17
37671 12.64 10.08 53 4.19
Totals 49.36 33.40 182 3.69
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 253

Menifee Mayor and City Council
April 15, 2026
Page
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Dividing the 182 total lots over the 49.36 gross acres equates to an overall density of 3.69 dwelling units per acre which is within the allowed density per the Specific Plan. Copies of the above tract maps are located within the Addenda of this report.

Topography: The original topography was generally level to sloping. The property has been graded into 182 single family lots along with three specific drainage lots which also serve as parks or open space areas. The property is generally level with street grade of Domenigoni Parkway which forms the northern boundary of the site. The terrain is hilly, vacant lands to the immediate east and developed residential neighborhoods to the north (beyond Domenigoni Parkway), west (Menifee Lakes development) and south. The lands have been graded and developed into single-family detached lots. Drainage is within an engineered street drainage system with drainage outlets and retention basins where needed. There is a drainage easement through the aforementioned lots which begins at Domenigoni Parkway and flows through the site to the southern boundary into the developed residential site below which includes a lake and appears to accept the runoff.

Soils Condition: We have reviewed an updated Geotechnical Engineering Study prepared for the previous tract map on the site (TTM 32100, 32101 and 32102) prepared by EnGEN Corporation of Temecula and dated December 12, 2014. The report concludes that the proposed residential development is feasible from a geotechnical standpoint, provided that the recommendations presented in the report are incorporated in the design and construction of the project. It is an assumption of this report that the soils are adequate to support the highest and best use conclusion and that all recommendations made within any soil’s reports were adhered to during construction. This is supported by existing development which was overseen by the City.

Seismic
Conditions: Per the County of Riverside, the subject is not located in a Fault Zone or in a Liquefaction Area.

Fire Hazard Map: Per the Cal Fire Hazard Severity Zone Map, the subject is located in a Very High Fire Hazard Severity Zone. A copy of the map with the subject area identified by a blue star is located in the Addenda for your review.

Environmental
Conditions: We have reviewed both a Phase I and Phase II Environmental Site Assessment on the subject property, both prepared by EnGEO Incorporated. The Phase I report was dated September 11, 2017 and concluded no Recognized Environmental Conditions were apparent, however, due to the previous use of orchard and row crop cultivation, there may be chemical contamination, and a Phase II report should be completed. The Phase II report was dated October 5, 2017, Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 254

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April 15, 2026
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investigated potential agrichemical impacts to the soil and found no detectable concentrations of organochlorine pesticides. The builders and/or their consultants have stated (and this appraisal assumes) that there are no environmental issues that would slow or thwart development of the site. This is supported by existing development on the subject lands which was overseen by City inspectors.

Easements/
Encumbrances: We have reviewed a Preliminary Title Report on Tract 37671 (no dash) prepared by First American Title and dated December 2, 2024, and identified as Order Number NHSC-7033000. It is assumed that Tract 37671-1 and Tract 37671-2 have similar exceptions. The exceptions within Tract 37671 as shown within the report are as follows:

Item Nos. 1-4 pertain to property taxes and assessments on the property including CFD 2024-1 (Banner Park II) which is the subject CFD and CFD 2017-1 (Maintenance Services). Item No. 5 is in regard to the existence of the Santa Ana Watershed Benefit Assessment Area. Item No. 6 pertains to an amendment to a School Mitigation Agreement. Item No. 7 refers to a Memorandum of Agreement dated September 26, 2025. Item No. 8 pertains to an Agreement regarding annexation into a CFD dated August 6, 2015.

Item No. 9 refers to a lien agreement recorded in 2015. Item No. 10 pertains to CC & Rs recorded on the parcel. Item No. 11 refers to landscaping lots. Item Nos. 12 and 16 refer to easements for street, utility and incidental purposes. Item No. 13 pertains to the environmental constraint note on said tract map. Item No. 14 refers to the agreement for water service. Item No. 15 is in regard to a water agreement and notification of low water pressure. Item No. 17 is in reference to further documentation needed from Pulte Home Company, LLC prior to issuing a commitment by the title company.

Item No. 18 refers to the rights of the public to any public lands. Item No. 19 refers to water rights while Item No. 20 refers to the rights of any parties in possession.

It is an assumption in this appraisal report that the subject lands are free and clear of any liens and/or encumbrances except for Menifee CFD No. 2024-1 and the aforementioned assessments and CFDs.

The appraiser is not a title expert, and it is recommended that any concerns relating to title should be addressed to the appropriate experts.

Utilities: All normal utilities serve the subject site by the following companies:
 Electrical: Southern California Edison Company
 Natural Gas: The Gas Company
 Sewer/Water: Eastern Municipal Water District
 Schools: Menifee Union School District /
Perris Union High School District
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 255

Menifee Mayor and City Council
April 15, 2026
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Streets/Access: Access to the subject is via I-215 to Newport Road, east about 1.75 miles to the subject site. Access into the site is via Newport Road/Domenigoni Parkway and Briggs Road.

I-215 is a major Southern California Freeway beginning at the I-15 in Murrieta in Southern Riverside County and providing access north through Riverside and into San Bernardino where it combines with I- 15 once again.

Newport Road is an arterial with on/off ramps from I-215 and provides the main commercial access into Menifee. Access from I- 15 to Newport Road is via Railroad Canyon Road, with major on/off ramps from I-15 about five miles west of the Menifee City Limits.

Railroad Canyon Road turns into Newport Road at the western border of the City. Near the subject site Newport Road becomes Domenigoni Parkway and provides the major access into the area known as Winchester, directly to the east of the subject.

Briggs Road is a main access route throughout the eastern portion of the City of Menifee beginning at Gunther Road to the north in unincorporated Riverside County and terminating at Highway 79 in the unincorporated French Valley area to the south. After crossing Highway 79 Briggs Road becomes Thompson Road. There is one disconnect of Briggs Road at Garbani Road in Menifee where you travel west ¼ mile on Garbani to where Briggs Road begins again.

Internal public streets within the subject site include Airborne Drive (access into the subject off Domenigoni Parkway at terminus of Lindenberger Road), Cliff Park Drive, Patriot Court, Courage Court, Liberty Bell Court, Riverbank Court, Fortitude Drive, Oriole Circle and Ironview Drive, Sentinel Drive (entrance off Briggs Road), Signal Circle and Spurwood Circle.

Current Condition: The subject property has been developed into 182 single-family detached lots with generally a minimum size of 6,000 square feet.

The lots have been graded with streets completed and utilities stubbed to each lot. As of February 16, 2026, 84 of the completed homes have closed to homebuyers. In addition, there are six completed model homes, an additional 19 production homes over 95 percent complete, 28 homes under construction (under 95 percent complete) and 45 finished and/or partially finished lots.

Remaining
Costs: The majority of the subject lots are in a physically finished lot condition with estimated remaining hard costs and fees for land development including development fees (not funded by Menifee CFD 2024-1), landscaping, walls, streets, dry utilities and consultant costs are estimated to be $4,124,131. This takes into account the CFD funded fees and improvements. The remaining costs for the Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 256

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subject property of $4,124,131 are associated with all of the builder- owned property which includes 98 lots (six model homes, 19 homes over 95 percent complete, 28 lots with homes under construction and 45 remaining lots) suggesting an average amount of $42,082.97 per lot in remaining costs for each of the builder-owned parcels. These costs will be taken into consideration in the valuation section later within this report.

HOA Amounts: There is a Homeowner’s Association at Banner Park II which maintains the community lighting, the two parks, the drainage basin landscaped area and landscaping. The HOA monthly assessment for the overall community is $81 per month per home at build-out.

Improvement
Description: Banner Park II by Pulte includes three neighborhoods known as Heritage, Merit and Crest.
.

Heritage includes three floor plans, featuring all single-story homes, ranging in size from 2,191 to 2,462 square feet with two and three- car garages. It should be noted that Plan 3 has an option to increase the square footage by reducing garage space, however we will value the smallest, more conservative sized plan in our analysis. Merit also has three floor plans, with all homes being two-story, with sizes ranging from 2,391 to 2,824 square feet. Crest is the largest sized homes. There are three plans, all two-story ranging in size from 2,845 to 3,237 square feet. There are options to add additional rooms on most of the Crest plans which can change the square footage. Again, we will value the smallest, more conservative sized plan in our analysis. All of the homes offer attached garages, concrete tile roofs, roll-up insulated garage doors, gourmet kitchens with granite or quartz countertops, interior laundry rooms and primary suites with dual sinks and walk-in closets. Interiors include raised panel interior doors, bullnose corners, tile at the foyer, vinyl flooring at kitchen, dining, laundry, and bathrooms. Homes include high efficiency heat pump water heaters, energy efficient HVAC units, kitchen islands open to great rooms, stainless steel appliances, LED lighting and drought tolerant front yard landscaping. Crest has higher-end features included.

Eighty-four of the 182 proposed homes have closed to individual homebuyers with closing dates between April 25, 2025, and February 16, 2026. Actual sales prices (including premium, upgrades, options, and all incentives) within Banner Park II ranged from $579,990 to $858,132. There are an additional 34 homes in escrow with estimated pricing from $601,990 to $826,377. Base pricing at project opening in May 2025 ranged from $588,990 to $684,990 with current base pricing ranging from $620,990 to $721,990. It should be noted that Pulte is offering concessions including an interest rate buy-down for quick move-in homes. Total Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 257

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April 15, 2026
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concessions per home within Banner Park II ranged from $0 to upwards of $80,000 with the average total concession equating to about $28,850. All plans have seen base price increases ranging from $6,000 up to $37,000 (or 1.0 to 5.9 percent) with no plans seeing decreases.

Our search of the MLS revealed no closed resales and no homes listed on the resale market within Banner Park II. Our physical search noted all homes appeared to be in excellent condition. The plans are detailed on the following page.

*One of each of these plans is a model home. There are an additional 28 homes under construction, and 45 additional finished lots.

Plan

Bd/Ba
Floors/
Parking

Sq. Ft.

Ind.

Owned
Bldr.

Owned
Heritage
1 3 / 2 1 / 2 2,191 13 3*
2 3 / 2.5 1 / 2 2,311 13 3
3 3 / 2.5 1 / 3 2,462 7 6*
Subtotal Heritage 33 12
Merit
1 4 / 2.5 2 / 2 2,391 9 2*
2 3 / 2.5 2 / 2 2,654 7 3
3 4 / 2.5 2 / 3 2,824 8 3*
Subtotal Merit: 24 8
Crest
1 4 / 2.5 2 / 3 2,845 8 1
2 5 / 3.5 2 / 3 3,047 7 2*
3 5 / 3.5 2 / 3 3,237 12 2*
Subtotal Crest: 27 5
Total Banner Park II 84 25
Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 258

Menifee Mayor and City Council
April 15, 2026
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RIVERSIDE COUNTY HOUSING MARKET

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

Population
The County has experienced population growth for several decades and is anticipated to continue to do so in the foreseeable future. Per the California Department of Finance, the January 1, 2025, County population was 2.495 million, representing a one-year increase of 0.2 percent. This compares to an average annual growth rate over the previous four years of about 0.7 percent, and an average annual growth rate of approximately 2.3 percent for the previous twenty-year period. It should be noted however, that California’s overall population decreased between 2020 and 2022 (during COVID) with the current population still not back up to the peak of 2020. Current State projections for Riverside County suggest the population is expected to reach approximately 2.533 million by 2030, indicating an average annual increase of approximately 0.3 percent over the next five years. It should be noted that the forecasted population for 2030 was recently reduced from an estimated 0.7 percent annual growth rate to 0.3 percent in the past year.

Economic Conditions
Over the past twenty-five years the Inland Empire has seen various cycles in the housing market. The Great Recession impacted the Inland Empire significantly and resulted in a longer recovery period than that of other Southern California regions. The rise and then fall of housing prices in the Inland Empire between 2004 and 2009 were considerably steeper than almost anywhere in the State. Unfortunately, this meant that the people who bought near the peak of the market likely faced significant negative equity. After essentially remaining flat for a few years, housing prices began to increase in late 2012 through January 2020. Once the COVID pandemic hit in March 2020, the economy entered what is now known as the COVID disruption. The housing market slowed down significantly early on, but by May 2020, new homes were going under contract and selling at well above average absorption rates from May 2020 through spring of 2022 in the region. Beginning in mid-2022, the new home market saw a slowdown in absorption rates Item Title: 12.1
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due to the increasing interest rates, the high prices of homes, and the high rate of inflation which was shaking consumer confidence. As interest rates and home prices remain elevated, sale absorption rates for 2025 continued to perform slightly lower than average.

While the economy is still challenging with inflation higher than two percent and unemployment generally on the rise, the new home market is holding steady with generally good absorption rates. The average absorption rate for the Inland Empire from 2020 – 2024 was 4.3 sales per month per project while the absorption rate for 2025 was

2.8 sales per project per month which is roughly a 33% decrease from the previous 5- year period average. The year-to-date monthly average for 2026 is 3.0 sales per project which suggests that sales may be picking up as January is typically a slow sales month (Ryness Report dated January 25, 2026).

Economic growth in the Inland Empire was strong generally between 2015 (after the Great Recession), and until the economic shutdown due to COVID. The second half of 2020 and all of 2021 saw economic growth, however the first two quarters of 2022 saw GDP shrinking as interest rates rose and consumer confidence slowed. The most recent unemployment rate for the MSA is 5.1 percent (per the December 2025 EDD report) which is lower than the previous month (5.4 percent) and slightly higher than one year prior (4.9%). While unemployment rates are still near historical lows, the inflation factor has significantly affected the economy.

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

Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 260

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April 15, 2026
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During the COVID disruption, new home sales were one of the brightest spots in both the local and national economies. While new home sales slowed in March and April 2020 due to the onset of the COVID pandemic, both sales and prices increased significantly due to strong demand from May 2020 throughout COVID until spring 2022 when interest rate increases began affecting the home-buying market. A combination of increasing home prices and falling consumer confidence, added to the significant interest rate increases, began slowing new home sales significantly in mid-2022. Due to the significantly higher mortgage interest rates, existing homeowners are not moving, which has stifled the existing home market, making the new home market the only option for some. Both new home and existing home sales have slowed considerably from mid-2022 through the end of 2025. In January 2022 mortgage rates were 3.22 percent (for a typical 30-year fixed conventional mortgage) while as of February 12, 2026, the rate for the same loan is 6.09 percent. On a $500,000 mortgage, the monthly payment for this loan has increased from $2,167 to $3,011 or over 39 percent.

Per the Zonda National New Home Market Update in January 2026, the new home market in 2025 remained effectively flat relative to 2024. Buyers remained paralyzed by poor affordability and low confidence. With affordability improving, sales struggled to gain traction despite supply growth. This forced builders to lean heavily on aggressive price cuts and financing incentives to maintain sales momentum, move standing inventory and sell future homesites. They state that heading into 2026 the outlook is mixed. While the labor market is cooling, mortgage rates are finally showing signs of improvement.

Builders have also remained disciplined with supply which has helped prevent the type of surplus seen in past cycles. They believe that if lower rates succeed in drawing entry- level and high-equity buyers back into the market, the market may finally find its floor however the key unknown is employer hiring and firing plans.

On a more micro level, we have reviewed the Zonda Riverside-San Bernardino-Ontario (Inland Empire) Market Report dated January 2026. Per the New Home Pending Sales Index the year over year change is a decrease of 9.4 percent, however the month over month change is an increase of 8.7 percent. According to Zonda, affordability is the main Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 261

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April 15, 2026
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driver in the slow sales with the current home price value 22 percent over the income supported price (based on both new and existing sales). The new home average closing price (both attached and detached houses) in the market is $595,000 or 4.9 percent below one year ago, while the average closing price of an existing home (again both attached and detached) was $565,000 which is a decrease of 0.9 percent from one year ago. Per Zonda there were 46,067 existing home closings during 2025 in the Inland Empire which is 1.6 percent higher than the prior year and 8,321 new home closings which is 26.5 percent lower than the prior year. Resale activity picked up in 2025, however remains sluggish once again, and new home sales are down compared to this time last year.

Zonda data also reveals that both overall quick move-in (QMI) housing supply and QMIs per community are up year-over-year. Correspondingly, home prices are generally trending down in many areas when you include all incentives being offered.

The larger public homebuilders began offering significant interest rate buy-downs in early 2023 in order to keep absorption rates steady, which reportedly cost between $30,000 and $100,000 in incentives. The question is, how long can builders continue to offer these significant incentives. From conversations with active public homebuilders in the regions, they fully expect rate buy-downs to be prevalent in the new home buying process until rates come down to the mid to low 5.0% range. Although rate-buy downs are setting new home communities apart from the resale market, it is very costly for the builder to absorb which is greatly affecting their profitability. With the lowering of the FFR which has lowered the mortgage interest rates in the past four months, it is thought that the buy-downs will decrease.

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

Low rates greatly helped home sales during this time. However, first-time buyers are now having a hard time entering the housing market due to rising prices and rising interest rates. Mortgage applications had been spiking in late 2020 and 2021 due to the low rates and the fear rates were going to start ticking up, which began happening in March 2022.

The Board increased the rate eleven times between March 2022 and August 2023, which Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 262

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increased the FFR from 0-0.25 percent to 5.25-5.50 percent. From August 2023 to August 2024 the FFR was held flat. From September 2024 through December 2024, The Board lowered rates from 5.25% - 5.50% to 4.25% - 4.50%. Rates then stayed unchanged between January 2025 and September 2025, with the September, October and December meeting each delivering a 0.25 percent cut to the current FFR of 3.50-3.75% percent. At the January 2026 meeting the Board held rates steady.

Residential Land Development
While there had been little land development going on in most of the Inland Empire during the Great Recession years 2008-2011, the second half of 2012 saw a resurgence in the more coveted areas of the Inland Empire. The increase in housing prices since 2012 combined with the limited availability of supply made land development feasible once again for homebuilders. It is thought that the increase in regulations, which has significantly increased the timeline for processing entitlements, has limited the master developers’ further entitlement of developable land in California. While prior to the recession it was not unusual to see numerous large master-planned communities selling lots to various builders, there are few currently available in the subject area such as Spring Mountain Ranch (Perris). The majority of land sales over the past few years include single tracts of land with maps ready to record (such as Banner Park I and Banner Park II) or a public builder purchasing a larger piece of land but developing the land for its own use (such as Cimarron Ridge and Legado in Menifee). The lack of master-planned communities delivering finished lots to home builders has greatly decreased the new home supply in the Inland Empire and is not expected to change in the near future.

Land sales in the Inland Empire slowly grew from 2012 up to a peak in 2017, with 2018 and 2019 showing fewer land transactions. Once home sales exploded in May 2020, land sales followed with a significant number of residential land sales to builders in the Inland Empire during the second half of 2020 and throughout 2021. In late 2021 and early 2022, prior to the FFR increases, builders were paying significantly more for residential land that was ready to develop as demand was strong, and supply was shrinking. The beginning of 2022 continued with strong residential land sales until May, when land sales began to fall sharply due to climbing interest rates which was slowing new home sales.

Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 263

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April 15, 2026
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Land Sales in the Inland Empire bounced back in a positive way in 2024 with 12 residential land sales in the subject area, but 2025 saw a significant decrease in builder land transaction activity with six closings in the same area. Thus far in 2026 there have been two land sale closings in the subject market which would suggest a higher number of sales than in 2025.

On a national scale, according to the National Association for Home Builders (“NAHB”), Builder Confidence in the market for January 2026 was 37, down two points from December but up from 32 in August 2025, one of the lowest ratings since the Great Recession. The NAHB/Wells Fargo Housing Market Index is designed to gauge and track the pulse of the single-family housing market and is based on a monthly survey of builders being asked to rate present sales of new single-family homes, expected sales of homes for the next six months and traffic of prospective buyers. For reference, 2022 averaged a score of 59, 2023 averaged a score of 44, 2024 averaging a score of 45 and 2025 averaged a score of 37. The latest Housing Market Index survey also revealed that 40% of builders reported cutting prices in January and sixty-five percent of builders stated they are using incentives in January, the 10th consecutive month this share has exceeded 60 percent.

New Home Sales and Pricing
We have researched new single-family homes within the subject market in order to reflect residential trends. It should be noted these sales numbers and prices pertain to new home sales while later in this section we discuss existing home sales. In reviewing new home sales in the Inland Empire market area, per the January 25, 2026, Ryness Report, the year-to-date average sales rate (3.0 sales per month) is four percent higher than the same time period of the previous year (2.9 sales per month). There are many reasons impacting the slow sales rates of 2025, but one of the main reasons is that the Inland Empire Metro has an affordability issue. According to Zonda, the new home affordability ratio is near its 10-year annual low. A few key reasons contributed to the affordability problem are increased mortgage rates, stagnant job and wage growth, inflation, tariffs, and increased insurance costs.

Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 264

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April 15, 2026
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When comparing the January 25, 2026, Inland Empire Ryness Report to one year prior, there are seven additional projects (219 in January 2025 and 226 in January 2026) and sales are about four percent higher year-to-date than the previous year with the current year at 3.0 per month. Looking back, in 2025 the average sales rate per project was 3.0 sales per month, in 2024 the average sales rate per month was 4.1, in 2023 the average sales rate was 4.0, 2022 the average sales rate was 4.3, in 2021 the average sales rate was 4.9 homes per month, and in 2020 the average sales rate was 4.1 homes per month.

Again, the slowdown is due to affordability problems, mortgage rates, stagnant job and wage growth and inflation.

New single-family home pricing (combines both attached and detached) in the Inland Empire has also seen changes. The median new home price in the Inland Empire changed from the peak value of $437,200 in the third quarter of 2006 to $268,155 in early 2009 (during the Great Recession, a decrease of 39 percent) while the current Inland Empire median new home price is $595,000 which is down 4.9 percent from one year ago. In addition to decreasing prices, builders are buying down interest rates which costs the builder at times, up to $100,000, but the amount is not reflected in the recorded sales price. New home sale prices fluctuate based on the land value and competition more than on the cost of building the home. While finishes and sizes of homes can change, the basic costs on a per square foot basis typically do not fluctuate as much as land values; however, there have been inflationary increases in construction costs adding to this increase. Construction materials have increased an estimated 50 percent since 2019.

Within our search for the most comparable actively selling new home communities, we searched the subject’s Ryness submarket of South Riverside which houses Lake Elsinore, Wildomar, Menifee, the French Valley and Winchester. The South Riverside submarket has 45 new home communities which have an average sales rate year-to-date of 3.4 homes per month. This is slightly stronger than the Inland Empire average of 3.0 sales per month. Out of the 45 total new home communities in the South Riverside submarket, Menifee houses 19 of them. KB Home has three neighborhoods which includes two in Nautical Cove. Lennar has six new neighborhoods, four in the master plan of Legado, one known as Heritage Village and one known as Quartz Trail. Pulte has eight new home communities, three in Banner Park II (subject) and five in Cimarron Ridge which includes two Del Webb (age qualified) neighborhoods. Finally, Richmond American Item Title: 12.1
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owns two neighborhoods, one in Town Center and one at Braverde (nearing sell-out). We are also including a portion of the area known as Winchester due to its close proximity to the subject property which has four new home communities selling and four more “coming soon”. In our analysis we have utilized eleven comparable new home communities including the three subject neighborhoods in Banner Park II, and four additional new home communities in Menifee and four in Winchester, with base prices ranging from $541,295 to $742,990. The subject’s most recent base pricing is from $629,990 to $721,990, which falls within the comparables price range.

Existing Homes Sales and Pricing

While the previous section looked at new home sales and pricing, this section refers to existing homes in the Inland Empire. According to the California Association of Realtors’ most recent sales data within overall Southern California, the median price paid for an existing single-family home in December 2025 ($855,000) reflects a decrease of 0.6 percent from the previous month however an increase of 0.6 percent from the previous year ($850,000 in December 2024). Existing home sales in Southern California overall were up 1.7 percent year-over-year as of December 2025, and up 13.5 percent from the previous month. The monthly increase in sales numbers is due to the decrease in mortgage rates over the past three months. The overall Southern California numbers compare to Riverside County with $635,000 as the median price paid for an existing home in the County in December 2025, a 0.8 percent increase from the previous month and a

1.6 percent increase from the previous year. Sales are up 0.2 percent year over year and up 16.2 percent from the previous month, again, probably due to lowering interest rates.

Historically, the new home market captures 10-13 percent of the overall home sales; however, in the past few years due to the limited availability of existing homes, new home sales were capturing closer to 20-30 percent of total home sales. On the following page is a table showing the sales and prices for the Southern California area by County per the California Association of Realtors.

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Southern California Existing Home Sales
County Dec 2025 Nov 2025 Dec 2024
Price MTM
% Change
Price YTY
% Change
Sales YTY
% Change
Los Angeles $890,910 $942,610 $912,370 -5.5% -2.4% 0.9% Orange $1,390,000 $1,400,000 $1,362,000 -0.7% 2.1% 2.4% Riverside $635,000 $629,950 $624,790 0.8% 1.6% 0.2%
San Bernardino $500,970 $497,160 $490,950 0.8% 2.0% 6.1% San Diego $1,000,000 $990,000 $975,000 1.0% 2.6% -0.6%
Ventura $913,000 $955,000 $895,000 -4.4% 2.0% 1.4%
Southern Calif. $855,000 $860,000 $850,000 -0.6% 0.6% 1.7% Source: California Association of Realtors

Based on December 2025, median existing homes prices, in comparison to the majority of the surrounding counties, Riverside County has a definite price advantage. The “Riverside County Advantage” (price difference between Riverside and surrounding counties) is $255,910 as compared to Los Angeles County, $278,000 as compared to Ventura County, $365,000 as compared to San Diego County and $755,000 as compared to Orange County. That is, in December 2025, the median priced home in Riverside County was $755,000 less (or over 50 percent less) than the median priced home in Orange County ($1,390,000). However, San Bernardino County has a $134,030 price advantage over Riverside County. Typically, as the price advantage widens, homebuyers are more open to commuting to further out areas. With the work-from-home concept, the suburban areas have seen more growth which puts pressure on home prices in the Inland Empire. It’s worth noting that the majority of Southern California counties showed median price decreases from the previous month.

In a separate attempt to capture the neighborhood specific price changes, the resale activity of existing homes in the subject area (per Redfin.com’s Housing Market Trends) has been reviewed. The number of sales and sale prices of existing homes within market areas in the immediate area of the subject are shown in the table below.

ZIP Code/Community
Name
Border
To
Subject
Sales of
Homes
Jan
2026
Sales %
Change
from
Jan 2025
Jan 2026
Price
Median
Price %
Change
from Jan
2025
Jan.
2026
PSF
Median
92584 (Menifee Subject Zip) Subject 172 13.2% $615,000 -0.7% $282 92586 (Sun City) Northwest 103 -5.5% $389,000 4.9% $274 92587 (Canyon Lake) West 52 -10.3% $714,500 8.39% $307
92596 (Winchester) East 178 -7.3% $598,105 -1.9% $287
92563 (Murrieta Hot Springs) South 141 -10.2 $675,000 -1.5% $294 92595 (Wildomar) Southwest 47 34.3% $675,000 2.6% $262
92585 (Perris) North 88 8.6% $575,000 0.2% $298
Source: Redfin.com Housing Market Trends January 2026
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The median price of a detached resale home in the subject’s market area is $615,000, about midway of the surrounding area’s median price range. The lowest price in the range refers to the Sun City area of Menifee which includes retirement areas with mobile homes and manufactured housing. The above price fluctuations from year to year relate to the California Association of Realtors overall Riverside County detached home resale price of $635,000 increasing 1.6 percent year-over-year.

Banner Park II Sales, Pricing and Competition
Banner Park II began sales in November 2024 with opening base pricing ranging from $588,990 to $684,990. The current base pricing at Banner Park II ranges from $620,990 to $721,990, with all plans showing base price increases. The three plans within Heritage at Banner Park II had original base pricing from $588,990 to $620,990 while current base pricing is $620,990 to $657,990 reflecting increases of $32,000 to $37,000 depending on the plan or increases of 5.3 to 5.9 percent. Actual net closed prices within Heritage including options, upgrades, and premiums, along with taking all concessions into consideration, ranged from $579,990 to $808,760 with the average net price for the 33 closed homes being $661,523. There are 17 Heritage homes in escrow with net pricing ranging from $601,990 to $763,168 with an average net escrow price for the 17 homes being $687,192. It should be noted that the net escrow prices are as reported as of the date of value and may change prior to escrow closings as additional options are purchased and/or as additional concessions are given. The three plans within Merit at Banner Park II had original base pricing from $604,990 to $642,990 with current base pricing from $626,990 to $664,990 reflecting increases of $6,000 to $22,000 depending on the plan or increases from 1.0 to 3.6 percent. Actual net closed prices within Merit including options, upgrades, and premiums, along with taking all concessions into consideration, ranged from $603,990 to $760,028 with the average net price for the 24 closed homes being $662,968. There are seven Merit homes in escrow with net pricing ranging from $627,721 to $738,021 with an average net escrow price for the seven homes being $678,592. It should be noted that the net escrow prices are as reported as of the date of value and may change prior to escrow closings as additional options are purchased and/or as additional concessions are given. The three plans within Crest at Banner Park II had original base pricing from $649,990 to $684,990 while current base Item Title: 12.1
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pricing is $678,990 to $721,990 reflecting increases of $29,000 to $37,000 depending on the plan or increases of 4.5 to 5.5 percent. Actual net closed prices within Crest including options, upgrades, and premiums, along with taking all concessions into consideration, ranged from $665,990 to $858,132 with the average net price for the 27 closed homes being $741,940. There are ten Crest homes in escrow with net pricing ranging from $725,859 to $826,377 with an average net escrow price for the ten homes being $786,282. It should be noted that the net escrow prices are as reported as of the date of value and may change prior to escrow closings as additional options are purchased and/or as additional concessions are given.

Within all of Banner Park II, Pulte has closed 84 homes to individuals with the first sale date being November 2024, with an additional 34 homes currently in escrow. The total of 118 sales over the past 15 months equates to an overall average absorption rate of 7.86 homes per month between the three communities. When looking at each project, Heritage has sold 50 homes, reflecting an average sales rate of 3.33 homes per month; Merit has sold 31 homes, reflecting an average sales rate of 2.07 homes per month; and Crest has sold 37 homes, reflecting an average sales rate of 2.47 homes per month. The homes within Merit have sold at the lowest absorption rate and also have the highest amount of concessions which appear to be needed to keep the absorption of the homes going. The sales rates of the subject homes range from 2.1 to 3.3 sales per month. The average sales rates of the comparable projects range from 1.3 to 5.8 sales per month with the subject sales rates within the comparables’ range. The average for the overall subject area marketplace for year-end 2025 was 3.1 average sales per project. One of the subject projects, Heritage, is selling faster than the average in the area with both Crest and Merit selling slower than the average in the overall area.

Summary
Riverside County has seen a substantial increase in pricing since 2012 with most areas, including the subject, showing astronomical increases from mid-2020 through today.

While existing home sales were originally down when COVID began in spring/early summer 2020, new home sales subsequently shot up due to the existing home market supply being constrained and interest rates hitting all-time lows. The past three years Item Title: 12.1
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have seen a slowdown in sales which appeared to be due to limited inventory, high pricing and high interest rates. However, buyers appear to be resilient to the increases. The subject market area saw a slight increase in pricing while much of Southern California has seen pricing decrease over the past year. While sales slowed and prices softened due to uncertainty in the economy, the past year has seen both price increases and builders offering incentives. Despite uncertainty hitting the market due to the uncertainty in the economy, interest rates and inflation, most observers agree that the Inland Empire housing market is healthy and population growth is still estimated to occur in the area. It is believed that as the population continues to increase, housing growth will also continue.

Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 270

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HIGHEST AND BEST USE ANALYSIS

The highest and best use is a basic concept in real estate valuation due to the fact that it represents the underlying premise (i.e., land use) upon which the estimate of value is based. In this report, the highest and best use is defined as:
"the reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value”4

Proper application of this analysis requires the subject properties to first be considered “As If Vacant” in order to identify the “ideal” improvements in terms of use, size and timing of development. The existing improvements (if any) are then compared to the “ideal” improvements to determine if the use should be continued, altered or demolished preparatory to redevelopment of the site with a more productive or ideal use.

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

Physically Possible Uses
The subject property consists of an estimated 49.36 gross acres in a triangular-shaped parcel at the southwest corner of Domenigoni Parkway and Briggs Road in Menifee. The site has access from I-215 via Newport Road which turns into Domenigoni Parkway with the subject about two miles east of the freeway offramp. The site was generally level at surrounding street grade. The property has been graded and developed into 182 generally level, finished lots with internal streets in and utilities stubbed to each lot. The property is surrounded by a hilly, undeveloped parcel to the east (beyond Briggs Road) and existing housing to the north, south and west. Briggs Road, the eastern boundary of

4 The Appraisal of Real Estate, 11th Edition
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the subject site is also the eastern border of the City limits at the subject site. Beyond the undeveloped parcel to the east is the unincorporated Riverside County area known as Winchester with several new housing communities currently selling. We have reviewed a geotechnical report and an environmental report, and all reports concluded that development of the site as proposed was feasible. It is an assumption of this report that the soils are adequate to support the highest and best use conclusion and that there are no environmental issues which would slow or thwart development of the site. This is evidenced by City approvals along with City inspectors on site during construction. There are two parks and a meandering detention basin/water quality basin which allow drainage through the site. This drainage area is landscaped and is a part of an engineered drainage system which appears to have been designed to alleviate any potential flooding problems and to control project water runoff. All standard utilities serve the subject property. There is neighborhood shopping and major shopping centers within two miles of the subject site.

Based on the physical analysis, the size, access, and topography make the subject property physically suited for numerous types of development; however, the grading and development that has occurred on the site along with the surrounding uses, suggests single-family residential use.

Legality of Use
The subject property is located within the City of Menifee, the entity responsible for land use and zoning regulation. Per the City’s Land Use Map, the subject site is designated as within the Menifee Valley Specific Plan (Specific Plan 158). Per the Specific Plan, the subject lands are referred to as Planning Area 4-6 which is allowed for up to 197 single family detached homes with an overall density of at most, 3.9 dwelling units per acre. In addition, recorded Tract Map Nos. 37671-1, 37671-2 and 37671 subdivide the subject

49.36 estimated gross acres into 182 single-family lots with sizes generally ranging from 6,000 square feet. This equates to a density of 3.69 dwelling units per acre. The approved mapping is consistent with the current Specific Plan entitlements on the property. Based on the legality of use analysis, the type of development for which the subject properties can be utilized is narrowed to residential use. This is consistent with the findings of the physically possible uses.

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Feasibility of Development
The third and fourth considerations in the highest and best use analysis are economic in nature, i.e., the use that can be expected to be most profitable. As discussed under the Riverside County Housing Market section earlier within this report, the market had shown strong increases in both sales and pricing since COVID. There was a slowdown in sales in late 2022 when high home prices and increasing interest rates began to slow sales.

Overall home sales have slowed down significantly, partially due to existing homeowners not moving due to the higher interest rates, which stifled the existing home market, at times leaving new homes the only option for homebuyers. Interest rates have dropped by around 50 basis points in the past four months and appear to have stabilized in the 6.0 to

6.5 percent range which appears to be bringing new home buyers back into the marketplace.

Within Menifee CFD No. 2024-1, out of 182 proposed houses, there have been 118 home sales to date. All structures appear to be in excellent condition with no physical depreciation apparent. Within the new home market in Menifee and the surrounding area, we found eight additional projects to be comparable to the three subject communities within Banner Park II. Homebuilding had not been able to keep up with the demand during COVID with low interest rates, millennials joining the home buying market and the work from home factor all adding to the demand. As interest rates increased, the market softened, however the limited supply of existing homes on the market has increased the capture of new homes in the overall real estate market. The Menifee housing market is priced slightly higher when compared to the nearby areas of Perris and Lake Elsinore, however lower than Murrieta and Temecula (adjoining north San Diego County).

Population growth is still occurring in the area and will continue to create the need for housing. Our search of the Menifee and immediately surrounding area for comparable land sales resulted in six land sales in the subject marketplace in the past 10 months, including neighboring Winchester.

Based on the above analysis, the highest and best use for the subject property appears to be for single-family detached residential development at the right price points.

Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 273

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

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

Highest and Best Use – “As Improved”
The subject property consists of the community known as Banner Park II which has three neighborhoods known as Heritage, Merit and Crest, all being built, marketed, and sold by Pulte Homes. Banner Park II began sales in November 2024. The same three communities, Heritage, Merit and Crest, with many of the same home plans, were being sold in Banner Park I, across Domenigoni Parkway from Banner Park II. Using the first home sale in November 2024, with sales of 118 to date results in a total combined sales rate over the three projects of 7.86 sales per month. When reviewing each neighborhood, Heritage has sold 50 homes resulting in an average sales rate of 3.33 homes per month.

Merit has sold 31 homes, resulting in a sales rate of 2.07 homes per month, and Crest has sold 37 homes to individuals, resulting in a sales rate of 2.47 homes per month. There are 45 actively marketing new home communities in the subject’s South Riverside submarket (19 of those within Menifee) that have a year-to-date average absorption rate of about 3.4 sales per month (according to the Ryness Report dated January 25, 2026).

Within the subject Heritage has a sales rate near the average while Merit and Crest are selling slower than the average. While two of the subject communities are selling slower than the average absorption in the area, both are still actively selling with escrows occurring and closing. It appears that Banner Park II homes are selling at or near the correct price points for the area. Our search within the subject area found eight additional projects considered to be comparable with similar sized homes in the Menifee market area. The absorption or sales rates within the comparable projects used in our analysis Item Title: 12.1
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range from 1.3 to 5.8 sales per month. The subject three communities’ sales rates range from 2.1 to 3.3 sales per month which is within the comparables range.

Base pricing within the three neighborhoods within Banner Park II have all had price adjustments since opening, with all plans showing price increases ranging from 1.0 to 5.9 percent between grand opening in May 2025 (however sales began in November 2024) to current base pricing. Within Heritage, pricing has increased between 5.3 to 5.9 percent; within Merit pricing has increased from 1.0 to 3.6 percent and within Crest pricing has increased between 4.5 and 5.5 percent. While base pricing has seen increases since opening base pricing, the seller is offering incentives which generally range from $2,000 to $25,000 for sales incentives and an average of around $17,000 for closing incentives that may include a buy-down of the interest rate. This is typical for public builders in the Inland Empire as they attempt to keep their absorption rates up as mortgage rates increased.

The sales rates within the subject and the competitive projects in the immediate area suggest there is demand for the subject homes in the current market at the right price points. All of the homes are of good design and appear to be of good quality workmanship. In addition, there are a significant number of homes in escrow. Based on Banner Park II’s sales rates, current demand and the condition of the homes, it is our conclusion that the highest and best use for the subject property is for the continued use of new homes for sale, as improved.

Item Title: 12.1
Community Facilities District 2024-1, Banner Park II, Issuance of Special Tax Bonds Item Page Number: 275

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April 15, 2026
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VALUATION ANALYSIS AND CONCLUSIONS

The Sales Comparison Approach will be used to value the subject property. This approach compares similar properties that have recently sold or are in escrow. In determining the value for the property, a unit of comparison needs to be addressed. For single-family detached lots, the lots are typically sold on a finished lot basis. That is, the sales price is determined by a finished lot value and then the remaining costs to develop the property to a finished lot condition are considered in the sales price. Therefore, in determining a current market value for the residential lands, the current condition of the lots will be considered. In the case of the existing home valuations, a single home sale is the unit of comparison. In determining the value for each existing house, a base value will be concluded for each plan which will be considered a minimum market value as most buyers typically purchase some premiums, upgrades or options which increase the price of the home.

The valuation will be presented as follows. First, a discussion of the single-family detached lot market data will be given. Each of the comparable market data (on a finished lot basis) will be detailed along with a comparison discussion of their relationship to the subject property. The remaining construction costs and development fees for the subject site will be taken into consideration. This analysis will be followed by a finished lot value conclusion for the subject property. Houses which are under construction (under 95 percent complete) will be valued on the basis of a finished lot rather than attribute value to a partially complete improvement.

In the case of the completed (over 95 percent complete) builder-owned models and production units, the homes will be valued using a DCF due to the “bulk” or single ownership of the homes. The DCF will consider the fair market value of the completed homes (utilizing the Sales Comparison Approach), any remaining land development costs and fees, the marketing and carrying costs associated with selling off the homes, a profit due to the developer of the homes, and a discount rate reflecting both the risk associated with selling off the homes along with the time value of money during the estimated absorption period.

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In the case of the individually owned homes, a concluded base value will be used for each plan and a mass appraisal technique will be addressed. In determining the concluded base value, new home sales in the area will be reviewed and compared with sales of the subject completed homes using standard methodology and statistical testing. In addition, resales, if any, will be taken into consideration. All of the value conclusions will take into consideration improvements funded by the Menifee CFD No. 2024-1 Special Tax Bonds and their lien. A summary of the final value conclusions will be reported at the end of this valuation section.

Market Data Discussion – Detached Residential Lots

Banner Park II consists of 84 individually owned homes, six model homes, 19 production homes over 95 complete (14 in escrow), 28 homes under construction (under 95 percent complete, 15 in escrow) and 45 remaining lots which are generally in a finished condition.

The majority of the lots have a minimum of 6,000 square feet however we noted a few lots a few square feet below 6,000 square feet per the recorded tract maps. The homes under construction (under 95 percent complete) will be valued on the basis of a finished lot rather than attribute value to a partially completed improvement, therefore, we will value 73 lots (45 lots plus 28 lots with homes under construction that are under 95 percent complete) in this section.

We have searched the area and found the six land transactions summarized in the Addenda to be most comparable to the subject property. A discussion of each transaction in relation to the subject site is below.

Land Sale No. 1 refers to the most recent land closing in the immediate area. KB Home took down the final phase they purchased in a community known as Canterwood which consisted of 94 lots with a lot size of 5,500 square feet on February 6, 2026. D.R. Horton purchased the first phase within Canterwood back in 2022 based on an estimated finished lot of $175,000, which was below market value at the time due to the location and amount of infrastructure needed in the immediate area. The site is located about two miles southeast of the subject. D.R. Horton began selling homes in Canterwood in late 2023 Item Title: 12.1
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which brought people to the neighborhood. KB Home purchased what is known as Canterwood Phase 2 and Phase 3 in two takedowns with the first encompassing 53 lots and closing in June 2024 based on a finished lot price of $227,500. The second take- down which this land sale refers to was also based on the finished lot price of $227,500, however KB did renegotiate (due to cost increases since 2024) which decreased the per lot price about $10,000 per lot with the finished lot price remaining the same. KB Home is now selling their Hudson and Willow Pointe neighborhoods with base pricing from $565,990 to $674,990. The property will have an overall tax rate in the 2 percent range, similar to the subject. In comparison to the subject property this transaction is considered to be inferior due to the date of negotiation on the price back in 2024 and slightly inferior in location as it is further from shopping areas.

Land Sale No. 2 refers to the final takedown of lots within the Nautical Cove neighborhood, about one mile south of the subject along Briggs Road at Holland Road.

KB Home negotiated the transaction for a total of 243 lots with closings in three takedowns, the first in July 2024 for 120 lots, the second in August 2025 for 61 lots and this final purchase of 52 lots in January 2026. The finished lot price for the 6,000 square foot lots was negotiated back in 2024. The original takedown was at $253,000 per finished lot in July 2024, however when the second takedown occurred, it was renegotiated to $250,000 per finished lot for the second and third takedowns due to the softening market and unknown costs due to tariffs. The site is adjacent to an elementary school, making it a coveted location. KB Home is now selling their Amelia and Gatsby neighborhoods with base pricing from $584,990 to $741,990. The property will have an overall tax rate in the 2 percent range, similar to the subject property. This is the most similar sale to the subject property, and while the original price was negotiated in 2024, the latest price was negotiated in August 2025.

Land Sale No. 3 refers to the September 2025 closing of a large 150+ acre site just north of Canterwood, about 1.75 miles southeast of the subject property at the northeast corner of Leon and Holland Roads in unincorporated Riverside County in the area known as Winchester. The property was in an unimproved condition with major infrastructure needed and approved final mapping in place. KB Home purchased the entire site mapped Item Title: 12.1
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for 510 lots which range from 4,000 to 6,000 square feet for $7,000,000 or $13,725 per lot, however due to the significant improvements needed, the finished lot was estimated at $240,000. The site is adjacent to Canterwood with homes currently selling by D.R.

Horton and KB Home. It is estimated the property will have an overall tax rate in the 2 percent range, similar to the subject property. In comparison to the subject property this transaction is considered to be inferior due to the risk associated with the development.

That is, while the estimated costs to finish the lots are taken into account, there is risk due to the significant off-site infrastructure which needs to be completed. In addition, this transaction is considered inferior due to the number of lots. The absorption time of building and selling 510 homes, versus a typical tract of under 200 creates a discount needed to the buyer due to the time value of money. Finally, this location is considered slightly inferior to the subject as it is further out from shopping and schools.

Land Sale No. 4 refers to the Meritage Homes purchase of 310 lots located at the southwest corner of Briggs Road and Simpson Road about one-half mile north of the subject property. The site is mapped for 310 lots with cluster lots, 4,500 square foot lots and 5,000 square foot lots. Meritage purchased the site in May 2025 for $15,000,000 or $48,387 per lot based on a finished lot estimate of $228,000 assuming a similar overall tax rate. The property is just south of the master planned community of Heritage Lake in the northern portion of Menifee which is now built-out. In comparison to the subject property this transaction is considered to be inferior due to lot size. The subject has generally 6,000 square foot lots, while these range from cluster (typically around 3,000 square feet) to 5,000 square feet. Again, this is slightly inferior due to the number of lots in the transaction, similar to Land Sale No. 3.

Land Sale No. 5 refers to the May 2025 purchase of 96 mapped lots located northwest of Rouse Road and Byers Road in Menifee, about five miles northwest of the subject site.

Richmond American Homes purchased the 96 mapped lots for $10,055,000 or $104,740 per lot based on a finished lot price of $260,000 assuming a similar CFD on the site. The lots closed with an approved final map in an unimproved condition. The site is adjacent to Pulte’s successful Cimarron Ridge, a currently selling master planned community with some age-qualified product. The lots have a minimum lot size of 7,200 square feet which Item Title: 12.1
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is considered slightly superior to the subject’s 6,000 square foot lots, however this location is considered slightly inferior as it’s located in the northwest portion of the city, adjacent to the City of Perris.

Land Sale No. 6 pertains to the Beazer purchase of 81 lots in May 2025 located southeast of Leon Road and Domenigoni Parkway in Winchester, about one mile east of the subject site. The property was in a blue-topped condition with a recorded final map at time of sale.

This is the area in Winchester along Domenigoni Parkway that was mapped prior to the Great Recession, with some sites graded, then stalled for over 10 years. Now there are numerous new home communities currently selling in the area. The 81 lots have a minimum lot size of 7,200 square feet. Beazer purchased the site for $8,454,500 or $105,500 per lot, based on a finished lot price of $245,000. In comparison to the subject property, while these lots are slightly larger, the location in Winchester is slightly inferior due to being further out from shopping and the freeway.

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

Data
No.

Location
Date of
Sale Lot Size Finished
Lot Price Comparison to Subject
1 Winchester 2 / 26 5,500 $227,500
Inferior – Date of Negotiation
Slightly Inferior – Location & Lot
Size
2 Menifee 1 / 26 6,000 $250,000 Inferior – Date of Negotiation 3 Winchester 9 / 25 4,000 –
6,000 $240,000 Inferior – Condition, Lot Size,
Location and Number of Lots
4 Menifee 5 / 25 Cluster –
5,000 $228,000 Inferior – Lot Size, Location,
Number of Lots
5 Menifee 5 / 25 7,200 $260,000 Inferior - Location
Superior – Lot Size
6 Winchester 5 / 25 7,200 $245,000 Inferior – Location
Superior – Lot Size

The market data has an overall finished lot range from $227,500 to $260,000. Data No. 1, at the lowest end of the range is located in Winchester, in a location that is considered to be inferior along with slightly smaller lots which are also considered inferior to the subject property. While it is only two miles from the subject property, this location is in a more remote area with shopping a couple of miles further away and less development of the surrounding lands. Data No. 3 is adjacent to Data No. 1 (to the north) and sold for Item Title: 12.1
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$240,000, partly due to additional development in the area. It should be noted that Data No. 3 also has smaller lots when compared to the subject and was considered a bulk sale as KB purchased 510 lots in one purchase. Data No. 2, located about ½ miles south of the subject is the most comparable transaction when compared to the subject property.

Data No. 5, at the high end of the range, is considered inferior due to location and superior in lot size. The subject lots are generally in a physically finished condition with no remaining development risk. The above market data is considered to be good and plentiful.

We have concluded that the subject lots have a current market value of $250,000 for the subject 6,000 square foot lots. As discussed under the Property Description Section, there are remaining costs associated with developing the subject property into true finished lots. These costs are estimated at $42,082.97 per lot. The value conclusion for the final lots within Banner Park II is calculated below:
73 Lots x $250,000 $ 18,250,000
Less: Remaining Costs ($42,082.97 x 73) (3,072,057) Current Value for Remaining Lots $ 15,177,943

Retail House Valuation

Due to the single ownership of multiple houses by Pulte, including model homes and production homes over 95 percent complete, a Discounted Cash Flow (“DCF”) analysis is needed in order to arrive at a bulk sale value for each ownership. First, a retail value for each plan will be concluded followed by a DCF for the builder-owned lots, which will consider the absorption time to sell off the houses, the costs associated with selling off the homes and any remaining costs owed by the builder. The resulting revenue will be discounted using an appropriate rate to determine the builder-owned bulk value. The DCF analyses will be followed by a reporting of the concluded values for the individually owned homes using the concluded base retail value for each plan with a separate check of the analysis utilizing a mass appraisal technique based on actual sales prices of the homes and considering any re-sale market data.

Banner Park II consists of 84 individually owned homes, six model homes, 19 homes over 95 percent complete (14 in escrow), 28 houses under construction (15 in escrow), and 45 additional finished lots. The homes under construction and the lots have been valued Item Title: 12.1
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above. The 25 builder-owned homes over 95 percent complete (including six model homes) are addressed in this section with a separate valuation for each plan.

Below is a summary of the floor plans within Heritage, Merit and Crest at Banner Park II.

A listing of the improved residential comparable properties is located in the Addenda of this report. All of the improved residential properties are located within the subject area of Menifee or nearby in the Winchester area. Our search of the subject property and the local Multiple Listing Service (MLS) has resulted in no closed resales and no current resale listings within Banner Park II. The plans are detailed below.

* One of each of these plans is a model home. There are an additional 28 homes under construction, and 45 additional finished lots.

The most appropriate new home comparable data for Heritage Plan 1 are shown below.

Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 1 3 / 2 1 / 2 2,191 --
1 2 3 / 2.5 1 / 2 2,311 $274.34
4 2 3 / 2 1 / 2 1,879 $327.30
4 3 4 / 2 1 / 2 2,195 $294.30
5 1 3 / 2 1 / 2 2,080 $318.26
5 2 3 / 2 1 / 2 2,321 $293.83
11 3 4 / 2 1 / 2 2,084 $283.39

Plan

Bd/Ba
Floors/
Parking

Sq. Ft.

Ind.

Owned
Bldr.

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room count, garage space and other amenities. The new home comparables have a base price range from $274.34 to $327.30 per square foot with the smallest sized home at the high-end of the price per square foot range and the larger sized homes at the low-end of the price per square foot range. This is typical due to the economies of scale which are obtained during construction. Heritage Plan 1 has a current base asking price of $283.43 per square foot. There have been 13 closings of Plan 1 with a net sales price range of $264.71 to $317.86 per square foot. It should be noted that the reported net sales prices include upgrades, premiums, and options along with any concessions given by the builder while the concluded value relates to a base price for the plan, less concessions including interest rate buydowns. There are currently four escrows of Plan 1 with a price range of $274.76 to $321.17 per square foot, however all options and concessions may not be included in the escrow prices as negotiations may be ongoing. All of the homes appear to be in excellent condition with no depreciation visible. It has been concluded that Heritage Plan 1 has a base current market value of $280.00 per square foot. This calculates as follows:
2,191 sf x $280.00 = $613,480

The most appropriate new home comparable data for Heritage Plan 2 are shown below.

Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 2 3 / 2.5 1 / 2 2,311 --
1 1 3 / 2 1 / 2 2,191 $283.43
1 3 3 / 2.5 1 / 3 2,462 $267.26
4 3 4 / 2 1 / 2 2,195 $294.30
5 1 3 / 2 1 / 2 2,080 $318.26
5 2 3 / 2 1 / 2 2,321 $293.83
5 3 4 / 2 1 / 2 2,613 $272.86
11 4 4 / 2 1 / 2 2,231 $274.95

All new home comparables are located within Menifee. All are of similar quality, design, and appeal. Adjustments were considered (when applicable) for location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space and other amenities. The new home comparables have a base price range from $267.26 to $318.26 per square foot. The smallest sized home is at the high-end of the price per square foot range and generally the larger sized homes at the lower end of the price per square foot range. This is typical due to the economies of scale which are obtained during construction. Heritage Plan 2 has a current base asking price of Item Title: 12.1
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$274.34 per square foot. There have been 13 closings of Plan 2 with a net sales price range of $259.19 to $301.74 per square foot. It should be noted that the reported sales prices include upgrades, premiums, and options along with any concessions given by the builder while the concluded value relates to a base price for the plan less concessions. There are three escrows of Plan 2 with a sales price range of $273.04 to $287.30 per square foot, however all options and concessions may not be included in the escrow prices as negotiations may be ongoing. All of the homes appear to be in excellent condition with no depreciation visible. It has been concluded that Heritage Plan 2 has a base current market value of $270.00 per square foot. This calculates as follows:
2,311 sf x $270.00 = $623,970

The most appropriate new home comparable data for Heritage Plan 3 are shown below.

Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 3 3 / 2.5 1 / 3 2,462 --
1 2 3 / 2.5 1 / 2 2,311 $274.34
4 3 4 / 2 1 / 2 2,195 $294.30
5 2 3 / 2 1 / 2 2,321 $293.83
5 3 4 / 2 1 / 2 2,613 $272.86
11 4 4 / 2 1 / 2 2,231 $274.95

All new home comparables are located within Menifee. All are of similar quality, design, and appeal. Adjustments were considered (when applicable) for location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space and other amenities. The new home comparables have a base price range from $272.86 to $294.30 per square foot with the smallest sized home at the high-end of the price per square foot range and generally the larger sized homes at the lower end of the price per square foot range. This is typical due to the economies of scale which are obtained during construction. Heritage Plan 3 has a current base asking price of $267.26 per square foot. There have been seven closings of Plan 3 with net sales prices ranging from $268.93 to $328.50 per square foot. It should be noted that the reported net sales prices include upgrades, premiums, and options along with any concessions given by the builder while the concluded value relates to a base price for the plan less concessions.

There are eight escrows of Plan 3 with a sales price range of $271.70 to $303.81 per square foot, however all options and concessions may not be included in the escrow prices as Item Title: 12.1
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negotiations may be ongoing. All the homes appear to be in excellent condition with no depreciation visible. It has been concluded that Heritage Plan 3 has a base current market value of $260.00 per square foot. This calculates as follows:
2,462 sf x $260.00 = $640,120

The most appropriate new home comparable data for Merit Plan 1 are shown below.

Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 1 4 / 2.5 2 / 2 2,391 --
1 2 3 / 2.5 1 / 2 2,311 $284.43
2 2 4 / 2.5 2 / 2 2,654 $244.91
4 4 3 / 2.5 2 / 2 2,415 $272.87
6 3 5 / 3 2 / 2 2,311 $286.45
7 3 4 / 3 2 / 2 2,453 $264.98
9 3 5 / 3 2 / 2 2,311 $289.05

All new home comparables are located within Menifee or Winchester. All are of similar quality, design, and appeal. Adjustments were considered (when applicable) for location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space and other amenities. The new home comparables have a base price range from $244.91 to $289.05 per square foot with the largest sized home at the low-end of the price per square foot range. This is typical due to the economies of scale which are obtained during construction. Merit Plan 1 has a current base asking price of $262.23 per square foot. There have been nine closings of Plan 1 with net sales prices ranging from $252.61 to $274.68 per square foot. It should be noted that the reported net sales prices include upgrades, premiums, and options along with any concessions given by the builder while the concluded value relates to a base price for the plan less concessions. There are three current escrows of Plan 1 with prices ranging from $262.53 to $271.86 per square foot, however all options and concessions may not be included in the escrow prices as negotiations may be ongoing. All of the homes appear to be in excellent condition with no depreciation visible. It has been concluded that Merit Plan 1 has a base current market value of $260 per square foot. This calculates as follows:

2,391 sf x $260.00 = $621,660

The most appropriate new home comparable data for Merit Plan 2 are shown below.

Item Title: 12.1
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Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 2 4 / 2.5 2 / 2 2,654 --
2 1 4 / 2.5 2 / 2 2,391 $262.23
2 3 5 / 3 2 / 2 2,824 $235.48
3 1 4 / 2.5 2 / 3 2,845 $238.66
4 5 5 / 3 2 / 2 2,543 $263.07
5 4 5 / 3 2 / 2 2,874 $249.82
7 4 4 / 2.5 2 / 2 2,763 $244.30
10 5 5 / 3 2 / 2 2,532 $259.08

All new home comparables are located within Menifee or Winchester. All are of similar quality, design, and appeal. Adjustments were considered (when applicable) for location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space and other amenities. The new home comparables have a base price range from $235.48 to $263.07 per square foot with generally the larger sized homes at the low-end of the price per square foot range and the smaller sized homes at the high-end of the range. This is typical due to the economies of scale which are obtained during construction. Merit Plan 2 has a current base asking price of $244.91 per square foot. There have been seven closings of Plan 2 with net sales prices ranging from $242.42 to $273.24 per square foot. It should be noted that the reported net sales prices include upgrades, premiums, and options along with any concessions given by the builder while the concluded value relates to a base price for the plan less concessions.

There is one current escrow of a Plan 2 with a reported sales price of $248.11 per square foot, however all options and concessions may not be included in the escrow prices as negotiations may be ongoing. All of the homes appear to be in excellent condition with no depreciation visible. It has been concluded that Merit Plan 2 has a base current market value of $243.00 per square foot. This calculates as follows:
2,654 sf x $243.00 = $644,922

The most appropriate new home comparable data for Merit Plan 3 are shown below.

Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 3 5 / 3 2 / 2 2,824 --
2 2 4 / 2.5 2 / 2 2,654 $244.91
3 1 4 / 2.5 2 / 3 2,845 $238.66
3 2 5 / 3.5 2 / 3 3,047 $231.37
5 4 5 / 3 2 / 2 2,874 $249.82
5 5 5 / 3 2 / 2 3,119 $237.89
9 5 5 / 4 2 / 2 2,946 $252.20
Item Title: 12.1
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All new home comparables are located within Menifee or Winchester. All are of similar quality, design, and appeal. Adjustments were considered (when applicable) for location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space and other amenities. The new home comparables have a base price range from $231.37 to $252.20 per square foot with generally the larger sized homes at the low-end of the price per square foot range and the smaller sized homes at the high-end of the range. This is typical due to the economies of scale which are obtained during construction. Merit Plan 3 has a current base asking price of $235.48 per square foot. There have been eight closings of Plan 3 with net sales prices ranging from $231.43 to $269.13 per square foot. It should be noted that the reported net sales prices include upgrades, premiums, and options along with any concessions given by the builder while the concluded value relates to a base price for the plan less concessions.

There are three current escrows of Plan 3 with a reported sales price range of $247.16 to $261.34 per square foot, however all options and concessions may not be included in the escrow prices as negotiations may be ongoing. All of the homes appear to be in excellent condition with no depreciation visible. It has been concluded that Merit Plan 3 has a base current market value of $232.00 per square foot. This calculates as follows:
2,824 sf x $232.00 = $655,168

The most appropriate new home comparable data for Crest Plan 1 are shown below.

Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 1 4 / 2.5 2 / 3 2,845 --
2 3 5 / 3 2 / 2 2,824 $235.48
3 2 (NG) 5 / 3.5 2 / 3 3,047 $231.37
5 4 5 / 3 2 / 2 2,874 $249.82
5 5 5 / 3 2 / 2 3,119 $237.89
8 2 5 / 3 2 / 3 3,010 $231.98
9 5 5 / 4 2 / 2 2,946 $252.20

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generally the larger sized homes at the low-end of the price per square foot range and the smaller sized homes at the high-end of the range. This is typical due to the economies of scale which are obtained during construction. Crest Plan 1 has a current base asking price of $238.66 per square foot. There have been eight closings of Plan 1 with net sales prices ranging from $234.09 to $273.75 per square foot. It should be noted that the reported net sales prices include upgrades, premiums, and options along with any concessions given by the builder while the concluded value relates to a base price for the plan less concessions.

There are no current escrows of Plan 1 at this time. All of the homes appear to be in excellent condition with no depreciation visible. It has been concluded that Crest Plan 1 has a base current market value of $235.00 per square foot. This calculates as follows:
2,845 sf x $235.00 = $668,575

The most appropriate new home comparable data for Crest Plan 2 are shown below.

Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 2 5 / 3.5 2 / 3 3,047 --
2 3 5 / 3 2 / 2 2,824 $235.48
3 1 4 / 2.5 2 / 3 2,845 $238.66
3 3 5 / 3.5 2 / 3 3,237 $223.04
5 5 5 / 3 2 / 2 3,119 $237.89
8 2 5 / 3 2 / 3 3,010 $231.98
8 3 5 / 3 2 / 3 3,418 $220.42
9 5 5 / 4 2 / 2 2,946 $252.20

All new home comparables are located within Menifee or Winchester. All are of similar quality, design, and appeal. Adjustments were considered (when applicable) for location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space and other amenities. The new home comparables have a base price range from $220.42 to $252.20 per square foot with generally the larger sized homes at the low-end of the price per square foot range and the smaller sized homes at the high-end of the range. This is typical due to the economies of scale which are obtained during construction. Crest Plan 2 has a current base asking price of $231.37 per square foot. There have been seven closings of Plan 2 with net sales prices ranging from $232.27 to $251.18 per square foot. It should be noted that the reported net sales prices include upgrades, premiums, and options along with any concessions given by the builder while the concluded value relates to a base price for the plan less concessions.

Item Title: 12.1
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There are six current escrows of Plan 2 with a reported sales price range of $238.22 to $269.18 per square foot, however all options and concessions may not be included in the escrow prices as negotiations may be ongoing. All of the homes appear to be in excellent condition with no depreciation visible. It has been concluded that Crest Plan 2 has a base current market value of $228.00 per square foot. This calculates as follows:

3,047 sf x $228.00 = $694,716

The most appropriate new home comparable data for Crest Plan 3 are shown below.

Data Model Rm. Ct. Flrs/Pkg. Sq. Ft. Price/SF
Subj. 3 5 / 3.5 2 / 3 3,237 --
2 3 5 / 3 2 / 2 2,824 $235.48
3 1 4 / 2.5 2 / 3 2,845 $238.66
3 2 5 / 3.5 2 / 3 3,047 $231.37
5 5 5 / 3 2 / 2 3,119 $237.89
8 2 5 / 3 2 / 3 3,010 $231.98
8 3 5 / 3 2 / 3 3,418 $220.42
8 4 5 / 3.5 2 / 3 4,134 $212.45
9 5 5 / 4 2 / 2 2,946 $252.20

All new home comparables are located within Menifee or Winchester. All are of similar quality, design, and appeal. Adjustments were considered (when applicable) for location, master plan amenities, lot size, stories, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space and other amenities. The new home comparables have a base price range from $212.45 to $252.20 per square foot with generally the larger sized homes at the low-end of the price per square foot range and the smaller sized homes at the high-end of the range. This is typical due to the economies of scale which are obtained during construction. Crest Plan 3 has a current base asking price of $223.04 per square foot. There have been 12 closings of Plan 3 with net sales prices ranging from $228.26 to $265.10 per square foot. It should be noted that the reported net sales prices include upgrades, premiums, and options along with any concessions given by the builder while the concluded value relates to a base price for the plan less concessions.

There are four current escrows of Plan 3 with a reported sales price range of $234.16 to $255.29 per square foot, however all options and concessions may not be included in the escrow prices as negotiations may be ongoing. All of the homes appear to be in excellent Item Title: 12.1
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condition with no depreciation visible. It has been concluded that Crest Plan 3 has a base current market value of $220.00 per square foot. This calculates as follows:

3,237 sf x $220.00 = $712,140

Bulk Sales Value – Pulte Ownership

Due to the number of homes under a single ownership (Pulte owns 19 production homes over 95 percent complete along with six model homes), a Discounted Cash Flow Analysis needs to be considered.

Retail Value

Within Banner Park II are 25 builder-owned homes over 95 percent complete which includes six model homes. Per interviews with builders, upgrades, and landscape/hardscape of up to $150,000 are installed in the model homes, however, the builders generally consider this a marketing cost and do not anticipate recovering this investment on a dollar-for-dollar basis. Based on actual sales information of the subject model homes and the current real estate market, a consideration of a $75,000 premium has been included with each of the model homes. As concluded above, the retail base value conclusions for the builder-owned homes are calculated as follows:

Heritage:

Plan 1 (3 x $613,480) $ 1,840,440 Plan 2 (3 x $623,970) 1,871,910
Plan 3 (6 x $640,120) 3,840,720
Merit:

Plan 1 (2 x $621,660) $ 1,243,320 Plan 2 (3 x $644,922) 1,934,766
Plan 3 (3 x $655,168) 1,965,504
Crest:

Plan 1 (1 x $668,575) $ 668,575 Plan 2 (2 x $694,716) 1,389,432
Plan 3 (2 x $712,140) 1,424,280
Model Upgrades (6 x $75,000) 450,000
Retail Value $16,628,947

Absorption Period
In order to arrive at an absorption period for the 25 builder-owned homes, the absorption rate for the subject neighborhoods along with the surrounding developments has been Item Title: 12.1
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reviewed. Banner Park II had the first sale in November 2024. The average sales rates per community are 3.3 per month within Heritage, 2.1 sales per month within Merit, and 2.5 sales per month within Merit. Per the Ryness Report dated January 25, 2026, within the overall Inland Empire the average sales rate per project in 2025 was 2.8 sales per month.

Within the subject’s market area of South Riverside, the average sales per project was 3.1 sales per month in 2025. It appears that Heritage is selling above the average sales rate in South Riverside while Merit and Crest are selling below the average. Fourteen of the 25 builder-owned homes are in escrow with closings scheduled as the homes are completed.

Taking into consideration the product and concluded sales prices along with the current escrows and current market conditions, it is the appraiser’s opinion that the 25 builder- owned homes will be absorbed within a five-month period at the concluded values.

Remaining Costs
As discussed under the property description section above, there is $42,082.97 per lot remaining for land development costs and fees associated with the builder-owned property. For the 25 builder-owned homes, this equates to $1,052,074 ($42,082.97 x 25) in remaining costs. For analysis purposes this will be spread evenly over the five-month absorption period.

Expenses
In determining an expense rate, several builders in the subject area have been interviewed as to their expenses on selling existing inventory. Expenses include marketing and general administrative costs. These costs typically range from six to ten percent depending on varying factors such as absorption period, intensity of marketing, etc. Due to possible buy- downs of interest and help with closing costs in the current market, an eight percent marketing cost is estimated along with two percent for general and administrative costs for a total of ten percent in expenses for this analysis.

Profit
Several interviews with merchant builders in the area were conducted in order to determine an appropriate profit percentage for the subject properties. In the early 2000s, developers typically attempted to achieve a 10 to 12 percent profit based on gross sales proceeds. During the Great Recession, this range was lowered considerably to six to 10 Item Title: 12.1
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percent with some builders drastically lowering their profit potential in order to maintain their work force. The subject has experienced a good sales rate. A ten percent profit is considered appropriate in the analysis for this project.

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

1. Interviews with merchant builders in the Menifee area

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

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

The homes within Banner Park II began sales in November 2024 with the product being well received in the marketplace with over seven homes per month being sold to date between the three communities. Based on the sales rate within the subject project, the competition, the product and location, a ten percent discount rate is considered appropriate for this analysis.

Discounted Cash Flow Summary
The discounted revenue (see DCF Analysis in addenda) for the Pulte-owned homes is $11,950,664.

Pulte Ownership Final Valuation
The builder-owned homes within Banner Park consist of six models along with 19 production homes over 95 percent complete, 28 homes under construction (valued based on a finished lot) and 45 additional finished lots owned by Pulte. The final valuation of the Pulte owned property is shown below.

73 Lots $ 15,177,943
25 Houses 11,950,664
Total Pulte Ownership $ 27,128,607

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Individual Owned Homes Valuation Conclusion
There are 84 individually owned homes within Banner Park II. Based on the concluded value for each plan, the individually owned homes are valued as:

Heritage:

Plan 1 (13 x $613,480) $ 7,975,240 Plan 2 (13 x $623,970) 8,111,610
Plan 3 (7 x $640,120) 4,480,840
Merit:

Plan 1 (9 x $621,660) $ 5,594,940 Plan 2 (7 x $644,922) 4,514,454
Plan 3 (8 x $655,168) 5,241,344
Crest:

Plan 1 (8 x $668,575) $ 5,348,600 Plan 2 (7 x $694,716) 4,863,012
Plan 3 (12 x $712,140) 8,545,680
Total Individual Owned $54,675,720

In additional review, we have reviewed the original builder sales prices for the homes within Banner Park II. Closings for the 84 homes occurred between April 25, 2025, and February 16, 2026. The reported closing prices by the builder for the homes total $57,773,859. The builder’s reported prices include premiums, upgrades and purchased options as well as took into consideration the concessions given by the builder. All of the plans have had base price increases since the project opened, ranging from 1.0 to 5.9 percent. The difference between the concluded value of $54,675,720 and the reported sales prices of $57,773,859 is due to three factors. The premiums, upgrades and options purchased, the concessions given and the appreciation of the homes. The above valuation is for the minimum market value as it takes into consideration the base plan price only and does not consider any options, premiums or upgrades which were purchased by the buyers, however does take into consideration concessions given by the builder. It is our conclusion that the original builder’s sales prices further substantiate the concluded minimum market value for the individually owned homes.

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APPRAISAL REPORT SUMMARY

The appraisal assignment was to value the subject property which is within the boundaries of Menifee CFD No. 2024-1. The property is being developed into the community of Banner Park II with three neighborhoods known as Heritage, Merit and Crest, all by Pulte Homes. Banner Park II is a continuation of the Banner Park I neighborhood which is located north of the subject. Both projects have been well received in the marketplace and are selling with current escrows in place.

Banner Park II includes a total of 182 single-family proposed homes with 84 closed to individuals and an additional 34 houses in escrow to individuals and due to close upon completion. We have reviewed the builder sales and reviewed the area’s Multiple Listing Service. Our search resulted in no closed resale homes and no current listings of resale homes within the subject property. All homes appear to be in excellent condition with no depreciation apparent. The 84 home closings occurred between April 25, 2025, and February 16, 2026. There are six models and 19 production homes over 95 percent complete, with an additional 28 homes under construction and 45 finished lots.

The subject property was valued using the Sales Comparison Approach to value and a mass appraisal technique. A minimum value was determined for the existing homes by concluding at a base value for each plan. The valuation considered the improvements/benefits to be funded by both the Menifee CFD No. 2024-1 bond proceeds, along with the Menifee CFD No. 2024-1 special tax lien. As a result of our investigation, the concluded market value for the subject property is:

Banner Park II
Pulte Ownership (73 lots & 25 houses) $ 27,128,607 Individual Owners (84 houses) 54,675,720
Total Aggregate Value Menifee CFD No. 2024-1 $ 81,804,327

The above values are stated subject to the Assumptions and Limiting Conditions of this report, the Appraiser’s Certification and as of February 16, 2026.

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

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

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

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

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

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

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

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

8. Kitty Siino has not performed appraisal services on the subject property in the past three years.

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

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

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

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

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

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BOUNDARY MAP

CITY OF MENIFEE CFD NO. 2024-1

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TRACT MAP NOS. 37671-1
37671-2 and 37671

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CAL FIRE

HIGH FIRE HAZARD AREA MAP

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DISCOUNTED CASH FLOW ANALYSES

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Banner Park II Pulte-Owned Houses Discounted Cash Flow Analysis

MONTH Months MONTH 1 MONTH 2 MONTH 3 MONTH 4 MONTH 5 TOTAL 5 INCOME: Retail Sales 16,628,947 $3,325,789 $3,325,789 $3,325,789 $3,325,789 $3,325,789 $16,628,947 TOTAL INCOME $3,325,789 $3,325,789 $3,325,789 $3,325,789 $3,325,789 $16,628,947 EXPENSES: Remaining Costs ($210,415) ($210,415) ($210,415) ($210,415) ($210,414) ($1,052,074) Marketing & Carrying Expenses 10% ($332,579) ($332,579) ($332,579) ($332,579) ($332,579) ($1,662,895) Profit 10% ($332,579) ($332,579) ($332,579) ($332,579) ($332,579) ($1,662,895) TOTAL EXPENSES ($875,573) ($875,573) ($875,573) ($875,573) ($875,572) ($4,377,863) NET CASH FLOW $2,450,217 $2,450,217 $2,450,217 $2,450,217 $2,450,218 $12,251,084 Discount Factor 10% 0.9917 0.9835 0.9754 0.9673 0.9594
DISCOUNTED CASH FLOW $2,429,967 $2,409,884 $2,389,968 $2,370,216 $2,350,629 $11,950,664 CUMULATIVE DISCOUNTED $2,429,967 $4,839,851 $7,229,819 $9,600,035 $11,950,664 $11,950,664

CASH FLOW

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RESIDENTIAL LAND SALES MAP
& SUMMARY CHART

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RESIDENTIAL LAND SALES MAP

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FINISHED LOT LAND SALES SUMMARY CHART

Data
No.

Location / APN / Buyer /
Seller City
Sales #
Lots
Lot
Size
Sales Price /
Est.

Finished Comments
Date Price per Lot Lot Price
1 Canterwood Phase 3 / NWC
of Leon Road and Craig
Avenue, Winchester / 466-
310-026 / KB Home / Ambient
Winchester February
2026 94 5,500 $10,650,000 /
$113,297 $227,500
Closing with a Final Map in
process in an unimproved
condition. This was the final
phase at Canterwood. Phase 2
closed in June 2024.

2 Nautical Cove Phase 3, NWC
Briggs Road and Holland
Road, Menifee / 364-200-009
/ KB Home / Ambient
Menifee

January
2026
52 6,000 $2,506,110 /
$48,194 $250,000
Closed in an unimproved
condition with an approved
final map. This was the final
takedown of three (first 7/24
and second 8/25).

3 San Pedro Farms, NEC of
Leon Road and Holland
Road, Winchester / 466-350-
019 / KB Home / Rancon
Winchester September
2025 510 4,000 -
6,000
$7,000,000 /
$13,725 $240,000

Closed with an approved final
map and in an unimproved
condition.

4 Salt Creek, SWC of Briggs
Road and Simpson Road,
Menifee / 333-200-062 /
Meritage Homes / Rancho De
Los Cazadores
Menifee May 2025 310 Cluster
- 5,000
$15,000,000 /
$48,387 $228,000
Closed with an Approved
Tentative Tract Map in an
unimproved condition. Three
Lot Segmentations (Cluster,
4,500, 5,000 SF lots).

5 Menifee Vista, NW of Rouse
Road and Byers Road,
Menifee / 330-230-023 /
Richmond American Homes /
JEN Partners
Menifee May 2025 96 7,200 $10,055,000 /
$104,740 $260,000
Closed with an approved Final
Map in an unimproved
condition.

6 Beazer Winchester, SE of
Domenigoni Parkway and
Leon Road, Winchester / 461-
431-011 / Beazer Homes /
Jim Gabrych
Winchester May 2025 81 7,200 $8,545,500 /
$105,500 $245,000 Closed with a Recorded Final
Map in a blue-top lot condition.

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IMPROVED RESIDENTIAL SALES MAP
& SUMMARY CHART
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IMPROVED RESIDENTIAL SALES MAP

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IMPROVED RESIDENTIAL SALES SUMMARY CHART

Data
No.

Project Name
Location/Developer Plan Room Count Floors/
Parking
Size
(SF)
Lot Size or
Density /
Absorption
Base Sales
Price Price/SF
1 Heritage at Banner Park / Domenigoni
Pkwy and Lindenberger Road, Menifee
/ Pulte Homes
1 2
3 3 / 2
3 / 2.5
3 / 2.5
1 / 2
1 / 2
1 / 3
2,191
2,311
2,462
7,900 sf lots

2.2 sales/mo

$620,990
$633,990
$657,990
$283.43
$274.34
$267.26
2 Merit at Banner Park / Domenigoni
Pkwy and Lindenberger Road, Menifee
/ Pulte Homes
1 2
3 4 / 2.5
4 / 2.5
5 / 3
2 / 2
2 / 2
2 / 2
2,391
2,654
2,824
6,000 sf lots

1.9 sales/mo

$626,990
$649,990
$664,990
$262.23
$244.91
$235.48
3 Crest at Banner Park / Domenigoni
Pkwy and Lindenberger Road, Menifee
/ Pulte Homes
1 2 (NG)
3 (NG)
4 / 2.5
5 / 3.5
5 / 3.5
2 / 3
2 / 3
2 / 3
2,845
3,047
3,237
6,500 sf lots

2.0 sales/mo $678,990
$704,990
$721,990
$238.66
$231.37
$223.04
4 Amelia at Nautical Cove / NWC Briggs
Road and Holland Road, Menifee / KB
Home
1 2
3 4
5 3 / 2
3 / 2
4 / 2
3 / 2.5
4 / 3.5
1 / 2
1 / 2
1 / 2
2 / 2
2 / 2
1,539
1,879
2,195
2,415
2,543

6,000 sf lots

1.4 sales/mo

$584,990
$614,990
$645,990
$658,990
$668,990
$380.11
$327.30
$294.30
$272.87
$263.07
5 Gatsby at Nautical Cove / NWC Briggs
Road and Holland Road, Menifee / KB
Home
1 2
3 4
5 3 / 2
3 / 2
4 / 2
5 / 3
5 / 3
1 / 2
1 / 2
1 / 2
2 / 2
2 / 2
2,080
2,321
2,613
2,874
3,119

6,000 sf lots

4.6 sales/mo

$661,990
$681,990
$712,990
$717,990
$741,990
$318.26
$293.83
$272.86
$249.82
$237.89
6 Juniper at Canterwood / SEC Holland
Rd and Leon Rd, Winchester / D.R.

Horton
1 2
3 3 / 2
4 / 3
5 / 3
1 / 2
2 / 2
2 / 2
1,576
2,239
2,311
5,000 sf lots

5.7 sales/mo $590,990
$646,990
$661,990
$374.99
$288.96
$286.45
7 Hudson at Canterwood / SEC Holland
Rd and Leon Rd, Winchester / KB
Home
1 2
3 4
3 / 2
4 / 2
4 / 3
4 / 2.5
1 / 2
2 / 2
2 / 2
2 / 2
1,741
2026
2453
2763
5,000 sf lots

4.0 sales/mo
$590,990
$631,990
$649,990
$674,990
$339.45
$311.94
$264.98
$244.30
Item Title: 12.1
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8 Quartz Trail / SEC Holland Road and
Evans Road, Menifee / Lennar
1 2
3 4
4 / 3.5
5 / 3
5 / 3
5 / 3.5
1 / 2
2 / 3
2 / 3
2 / 3
2,760
3,010
3,418
4,134
6,000 sf lots

4.5 sales/mo
$686,890
$698,265
$753,390
$878,290
$248.87
$231.98
$220.42
$212.45
9 La Ventana / SEC Simpson Road and
La Ventana Road, Winchester / D.R.

Horton
1 2
3 4
5 6
4 / 3
4 / 3
5 / 3
5 / 3
5 / 4
5 / 3
1 / 2
2 / 2
2 / 2
2 / 2
2 / 2
2 / 3
1,890
2,259
2,311
2,537
2,946
3,015

6,000 sf lots

4.6 sales/mo

$635,990
$650,490
$667,990
$687,990
$742,990
$736,990
$336.50
$287.95
$289.05
$271.18
$252.20
$244.44
10 Luminary at Outlook / Domenigoni
Parkway and Leon Road, Winchester /
TRI Pointe
1 2
3 4
5 2 / 2
3 / 2
3 / 2
4 / 3
5 / 3
1 / 2
1 / 2
1 / 2
2 / 2
2 / 3
1,569
1,758
1,941
2,216
2,532

6,600 sf lots

5.3 sales/mo

$563,510
$559,000
$589,000
$622,000
$656,000
$359.15
$317.97
$303.45
$280.69
$259.08
11 Tesoro at Legado / SWC Rouse Road
and Sherman Road, Menifee / Lennar
1 2
3 4
3 / 2
3 / 2
4 / 2
4 / 2
1 / 2
1 / 2
1 / 2
1 / 2
1,539
1,936
2,084
2,231

6,500 sf lots

3.0 sales/mo

$541,295
$580,335
$590,585
$613,420
$351.72
$299.76
$283.39
$274.95
Item Title: 12.1
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APPRAISER’S QUALIFICATIONS

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QUALIFICATIONS OF KITTY S. SIINO, MAI

Education

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

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

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

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

Employment

1988 - Present:

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

1986-1988:

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

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

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

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

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

Organizations
MAI #11145 - The Appraisal Institute

Public Financing
CASTOFF Meetings, 2006, 2007, 2008, 2009, 2010, 2011, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2022 and 2024
Speaker, Mello-Roos & Special Assessment Financing, UCLA Extension Public Policy Program, February 2009 and March 2011
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April 15, 2026