Rialto City Council
November 12, 2024

APPRAISAL REPORT

A COMMERCIALLY ZONED VACANT SITE

308 N. Riverside Avenue
Rialto, California 92376
Census Tract No.: 0130 / 033

Our Job No.AP240413

PREPARED FOR

CITY OF RIALTO
150 S. Palm Avenue
Rialto, CA 92376

Attn: Mr. Colby Cataldi, Community Development Director

DATE OF REPORT

July 22, 2024

3738 Bayer Avenue, Unit 101, Long Beach, CA 90808
(P) 562-377-1000 (F) 562-377-1001
www.appraisalpacificinc.com

J u l y 2 2 , 2 0 2 4 J o b N o . A P 240413

CITY OF RIALTO
150 S. Palm Avenue
Rialto, CA 92376

Attn: Mr. Colby Cataldi, Community Development Director

Re: Appraisal of a commercially zoned vacant site located at 308 N. Riverside Avenue, Rialto, California 92376.

Dear Mr. Cataldi:

In accordance with your request, we have prepared an Appraisal Report of the above-referenced real property. The client’s specific requirements were incorporated into a scope of work developed to provide credible assignment results in context to the intended use of t he appraisal. Assignment results are summarized below:

Sole Client: Cit y of Rialto
Objective: Determine the “As Is” market value of the sub ject Date of Property Inspection: Jul y 10, 2024

Valuation Scenario Date of Value Property Rights Final Value* Current As Is Market Value
(Based on 3 – 9-month exposure period)
July 10, 2024 Fee Simple $505,000

*Please refer to the Assignment Conditions

This appraisal report has been prepared in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP) as well as requirements of Title XI of FIRREA (Financial Institutions Reform, Recovery, and Enforcement Act of 2005). Our analysis and conclusion are subject to this report’s Contingencies and Limiting Conditions.

Respectfully submitted,
Appraisalpacific

TED P. DOUGLAS, MAI
______________________

TIM HOWMAN, CGREA
State Certified General Appraiser State Certified General Appraise r Certificate No. AG 001946 Certificate No. AG 035823
CA/Expires 14-October-24 CA/Expires 07-Decembe r-24

TABLE OF CONTENTS

R E P O R T S U M M A R Y 1

S C O P E O F W O R K 3

P R I O R S E R V I C E S C E R T I F I C A T I O N 4

S U B J E C T P R O P E R T Y H I S T O R Y 5

A S S I G N M E N T C O N D I T I O N S 7

L O C A T I O N D E S C R I P T I O N 8

S I T E D E S C R I P T I O N 1 2

MARKET CONDITIONS 1 5

HIGHEST AND BEST USE SUMMARY 3 4

VALUATION ANALYSIS 3 5

DIRECT SALES COMPARISON APPROACH 3 6
• LAND VALUATION 3 7
• D E M O L I T I O N C O S T S 4 1
• C O N C L U S I O N 4 1

R E C O N C I L I A T I O N 4 1

F I N A L V A L U A T I O N 4 1

EXPOSURE TIME AND MARKETING PERIOD 42

D E F I N I T I O N S 4 3

CERTIFICATION

ASSUMPTIONS AND LIMITING CONDITIONS
APPRAISER’S QUALIFICATIONS

ADDENDA
Subject Photos

1 REPORT SUMMARY

Property/Location: A Commercially Zoned Vacant Site
308 N. Riverside Avenue
Rialto, California 92376

Assessor’s Parcel No.: 0130-033-31-0000
0130-033-32-0000

Census Tract No.: 0130 / 033

Owner of Record: Aram & Yervand Property Management L (per publ ic record)

Site and Improvements:

Building Data
Site Data

Property Type: Commercially Zoned
Vacant Site
Size: 28,000 Sq. Ft. or ±0.643-
acres
Building SF: N/A Topography: Generally level
Year Built: N/A Surplus Land: N/A
Condition: N/A Zoning Class: Central Area Specific Plan (CASP) – Office Services
(OS)
Effective Age:

Remaining Economic Life:

N/A
N/A

Exposure Period/Marketing Time: 3 – 9 Months / 3 – 12 Months

Present Contract: N/A

Property’s Last Transfer: Date of Transfer: March 15, 2019 Sale Price: $1,400,000 (previous building existed on-site)

2 REPORT SUMMARY
(Continued)

Valuation Approaches Utilized – “As Is Value”

Cost Approach: Indicated Value: N/A
Land Value PSF: N/A

Income Approach: Indicated Value: N/A
Net Operating Income: N/A
Going-In Capitalization Rate: N/A

Sales Comparison Approach: Indicated Value: *$505,000
No. of Closed Sales Used: Fou r
Unadjusted $/SF of Land Range: $16.89 - $24.75
Adjusted $/SF of Land Range: $17.39 - $22.77

No. of Active Listings Used: One
Unadjusted $/SF of Land: $21.46
Adjusted $/SF of Land: $20.39

Final $/SF of Land Value Selected
®:
$20.00

*Includes a -$55,000 deduction for costs associated with demolishing the existing site improvements.

Value Conclusions

“As Stabilized” Value

“As Is” Value
Cost Approach N/A N/A
Income Approach N/A N/A
Direct Sales Comparison Approach N/A $505,000
Final Estimate of Value:

Real Estate: N/A $505,000

FF&E N/A N/A
Business Value N/A N/A
Total Value: N/A $505,000

3 SCOPE OF WORK

This is an Appraisal Report, which is intended to comply with t he reporting requirements set forth under Standards Rule 2-2 (a) of the Uniform Standards of Profes sional Appraisal. The depth of discussion contained in this report is specific to the needs of the client and for the intended use of the report. The appraiser is not responsible for unauthorized use of this report.

Use of or reliance on this appraisal or appraisal report, regar dless of whether such use or reliance is known or authorized by the appraiser, constitutes acknowledgmen t and acceptance of these general assumptions and limiting conditions, any extraordinary assumpti ons or hypothetical conditions, and any other terms and conditions stated in this report.

The standard scope of this analysis included the following:

• A reading of the request for appraisal services and related attachments.

• A review of all relevant documents that encumber the subject pr operty including escrow instructions/purchase agreement, leases if any, and a preliminary title report if provided.

• Research and investigation of current market conditions relativ e to the property type being appraised, as well as the market sector with which the subject is identified.

• Interviews with brokers, apprai sers, property owners and/or man agers, as well as relevant public agencies or governing bodies.

• Collection, verification and analysis of market data and any ot her pertinent information necessary to the valuation process.

• And, compilation of the descriptions, reasoning, and explanatio ns, leading to final value conclusions, within this report. Please refer to the Valuation Analysis section for primary approach (es) necessary to conclude to a credible opinion of value.

• The scope of this analysis specific to this assignment included the following:

Sole Client: City of Rialto
Intended Use: To provide the c lient with information to estimate current “As Is” market value of the subject for a potential sale
Intended User (s) for the purposes of
assisting in the Client’s intended use
only:

The intended user of this report is the City of Rialto.

The appraiser has not identified any purchaser, borrower or seller as an intended user of this appraisal. Receipt of a copy of the appraisal by such a party or any other third party does not mean that the party is an intended user of the appraisal.

Such parties are advised to obtain an appraisal from an appraiser of their own choosing if they require an appraisal for their own use. This appraisal report should not serve as the basis for any property purchase decision or any appraisal contingency in a purchase agreement relating to the property

4 • Completion of property contact interview regarding the subject.

• An interior/exterior inspection of the subject and surrounding neighborhood as of our date of value. This appraisal report is not a formal property inspection. It does not guarantee or imply that the property is free of defects or property condition prob l e m s . T h e a p p r a i s e r i s n o t a licensed contractor or property inspector. It is suggested that the client/borrower take the necessary steps to insure the property is acceptable to them prior to closing escrow (in the event of a sale).

• A review of comparables utilized in the report via aerial image s, exterior street inspection, broker verification, and or information obtained from Multiple Listing Services or other data providers such as LoopNet and Costar.

The subject consists of two contiguous parcels that combined fo rm a ±0.63-acre, commercially zoned site.

The highest and best use of the subject indicates that the most likely buyer is an owner-user or developer, both of which would likely remove the second generat ion site improvements (e.g. asphalt pavement, concrete pad from previous building, etc.) prior to redeveloping the site in the future. In this case, the Sales Comparison Approach in the context of a land value analysis is the primary approach to value most often utilized by buyers, sellers, and brokers of vacant sites.

The Income Approach has been excluded, in this since, market participants do not consider the income producing potential of a vacant parcel of land that is primarily purchased by an owner-user or developer.

Additionally, capitalization rate estimates derived from invest or-owned sites do not provide credible valuation results consistent with the Highest and Best Use conclusion.

The Cost Approach to value has b een excluded due to the propert y’s land status with no building improvements or marketable site improvements. The value of the subject is 100% in the land minus the cost to demolish the existing site improvements.

PRIOR SERVICES CERTIFICATION

Appraisal Pacific Inc. has performed no services as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment.

5 SUBJECT PROPERTY HISTORY

Pertinent details of the subject property and ownership history follows:

Legal Description

Public record lists the subject’s legal description as follows:

Buxton And Lane Sub Lot 8 Ex Mnl Rts Reservation of Record

Current Ownership

The subject property is currently owned by Aram & Ireland Prope rty Management L (per public record).

Current Subject Transaction:

Current Escrow: The subject is not currently involved in a pen ding transaction, nor is the subject currently available on the market for sale or lease.

Sales Price: N/A
Date of Escrow N/A
Closing Date: N/A
Broker Representation: N/A
Days on Market N / A
Terms and Conditions: N/A
Arms-Length Transaction: N/A

Five-Year Sales History

Public record indicates that the most recent transfer of the su bject occurred on June 18, 2019 on Document #2019.198569 for no consid eration. The most recent tr ansfer with consideration occurred on March 15, 2019 on document #2019.20190081792 for a consideration of $1,400,000 or $118.90 per square foot of building area. Additional details of this transaction were not provided.

No other transfers of the subject title are known to have occurred during the past five years.

To note, the subject was improved with a multi-tenant, ± 11,775-square-foot, 1980-built office building prior to January 2024 when the st ructure was destroyed by a fire. As such, all previous sale transactions included these building improvements making the previous values irrelevant to the subject’s current “as is” market value that is based on land value minus costs to remove all remaining site improvements allowing for future redevelopment.

6 Subject Occupancy

The subject is currently vacant.

Assessed Valuation and Taxes

The following tax information was taken from the subject’s tax roll obtained from the San Bernardino County Assessor’s website.

The subject parcel is located in Tax Rate Area 006-088 with a 2023-2024-tax rate of 1.320799%, which excludes special assessments. The subject’s total assessed value and taxes are as follows:

Assuming a sale at the “as is” appraised value of $505,000 the new annual taxes based on the 2023- 2024-base tax rate of 1.320799% plus special assessments of $38.56 per square foot will be $6,708.59.

According to the San Bernardino County Tax Assessor ’s website, the subject currently has defaulted taxes and penalties. The current redemption total is $54,470.52.

Assessment Y ear: 2023-2024 Parcel Number: 0130-033-32-0000 Land Value: $321,660 Tax Rate: 1.320799
Improvement Value: 1,050,758
Total Assessed Value: $1,372,418 Taxes: $18,165.45

7 ASSIGNMENT CONDITIONS

The following assignment conditions are pertinent to the valuation:

Extraordinary Assumptions

An assumption, directly related to a specific assignment, as of the effective date of the assignment results, which, if found to be false, could alter the appraiser’s opinions or conclusions.

This assignment contains no Extraordinary Assumptions.

Hypothetical Conditions

That which is contrary to what exists but is supposed for the purpose of analysis.

This assignment contains no Hypothetical Conditions.

8 LOCATION DESCRIPTION

The subject is located in Rialto in San Bernardino County. Loc ation details pertinent to the subject property are discussed below.

County Description

San Bernardino County is one of six counties that comprise the Southern California Metropolitan Region - the other counties are Ventura, Los Angeles, Orange, Riverside, and San Diego.

Bordering San Bernardino County is Inyo County to the north, Ri verside County to the south, the Nevada state line to the east and Los Angeles and Kern Counties to the west.

A major freeway system serves the County: Interstate 10 is a primary east/west freeway at the subject’s San Bernardino location and Inte rstates 15 and 215 run north/so uth through the County providing access to Las Vegas to the north and San Diego to the south. T he 210 and the 10 Freeways provide access from Los Angeles County from the west.

The San Bernardino-Riverside County region known as the Inland Empire forms the largest geographical Metropolitan Statistical Area (MSA) in the nation with over 27,308 square miles. The Inland Empire has benefited from vast quantities of developable land along with its proximity to major employment centers in adjoining Los Angeles and Orange Counties . The Inland Empire economy continues to show great potential in the long run due to its po sition as the central hub for logistics related to international trade and as the area where the most significant population growth is expected.

According to the California Depa rtment of Finance, San Bernardi no County had a January 1, 2024 population of 2,181,433, a 0.4% increase over 2023 (2,172,694 residents).

San Bernardino County's varied economic base includes administr ative services and support services, healthcare, trade and transpor tation, leisure and hospitality c onstruction, government, professional, scientific, and technical services, and private educational services.

According to the US Bureau of Labor Statistics, the non-seasonally adjusted unemployment rate in San Bernardino County was 4.3% in May 2024 down from 4.8% in April 2024 and up from 4.1% in December 2022.

The average home sale price in San Bernardino County is $552,42 6 as of May 2024, an increase of

6.4% from May 2023
(Source: Zillow.com).

City Description—Rialto
The subject is located in the northeast portion of the city of Rialto approximately 60 miles to the east of Los Angeles and approximately 103 miles north of San Diego. The city is bordered by the San Bernardino National Forest to th e north, an unincorporated sect ion of Riverside County to the south, the city of Fontana and an unincorporated section of Riverside County to the west and the cities of San Bernardino and Colton to the east.

EXHIBIT

REGIONAL LOCATION MAP

EXHIBIT

LOCATION MAP

9 Rialto has a pro-business attitude, relatively lower land and l abor costs, good surface transportation, rail service from the Union Pacific and Burlington Northern/ Santa Fe, and access to three airports. To encourage industrial developmen t, Rialto has a proactive Redeve lopment Agency, as well as a State Recycling Market Development Zone.

Rialto is served by the San Bernardino freeway (I-10), which ru ns east/west through the southern portion of the city, the Foothill (210) Freeway, which runs eas t/west through the northern portion of the city and the Riverside freeway (I-215), which travels in a north/south direction approximately 2.00 miles east of the city. These freeways connect the area to San Gabriel Valley and Los Angeles on the west, the Coachella Valley and Arizona on the east, San Bernardino and the I-15 Freeway on the north and the Temecula Valley and San Diego (via the I-15 Freeway) on the south.

The major surface arterials in Rialto are Riverside Avenue (nor th-south), as well as Baseline Road, Foothill Boulevard, Rialto Avenue , Merrill Avenue, San Bernardi no Avenue and Valley Boulevard (east-west). The LA/Ontario International Airport is located 17 .00 miles to the southwest within the city of Ontario, and provides the closest air service.

Rialto has a May 2024 unemployment rate of 4.8%, which compares with 4.3% for San Bernardino County as a whole. Average house prices in Rialto are $576,342 as of May 2024, up 8.1% from the previous year (Source: Zillow.com).

Neighborhood Boundaries

Following is a quick look at characteristics of the subject location followed by a more specific location description:

Subject Location & Neighborhood
Location/Market Items: Land Uses:

Neighborhood Suburban Residential 65%
General Condition Average Office/ Government 12%
Development Stage Established Industrial 5%
Value Trends: Stable Commercial/Retail 13%
Adjacent Properties Conforming Golf Course, Parks, etc. 3% Commercial Yard Vacancy ±1 Vacant Land 2%
Overall Market Condition Stable Total 100%

Neighborhood boundaries are defined as:

North: Foothill Boulevard
South: San Bernardino (I-10) Freeway
East: Pepper Avenue
West: Cactus Avenue

10 Surrounding Properties

The subject has an interior site location on the west side of N orth Riverside Avenue. Presented below are adjacent uses to the subject.

North: 320 N. Riverside Avenue, a 2,354-square-foot single-family residence

South: 302 N. Riverside Avenue, an 1,862-square-foot, 1904-built, converted single- family residence/office building

East: Across N. Riverside Avenue are older vintage single-famil y residential properties. Some of these properties have been converted to ac commodate professional and light medical office businesses.

West: Single-family residences.

The subject’s specific location consists of a mix of residential, professional office, light medical office and commercial as you travel further north or south of the property.

Overall, the subject’s previous multi-tenant office building co nformed to the neighborhood surroundings with the highest and best use pointing to office and the most likely future development of the site.

Specific Location Features

The subject is located within close proximity to major Southlan d freeways, residential neighborhoods and support commercial/office services.

The subject has convenient freeway accessibility. The Ontario ( I-15) Freeway is located 3.80 miles northeast of the subject via 5
th Street, the Foothill (210) Freeway is located 2.10 miles north v i a Riverside Avenue and the San Bernardino (I-10) Freeway is locat ed 2.20 miles south via Riverside Avenue. These freeways provide convenient access to other major freeways in the area, which in turn provide convenient access to the entire Southern California fre eway network. Also benefiting the subject is its proximity to a variety of housing alternatives l ocated in Rialto, as well as in the nearby surrounding cities. F i n a l l y , t h e s u b j e c t i s l o c a t e d i n t h e n o r t h e r n section of Downtown Rialto, approximately 0.40-mile north of City Hall and various other public support services that help stabilize the location.

In choosing a place of business for commercial users, quick and convenient access to the freeway system and proximity to desirable housing and labor is of primary importance.

Access/Exposure

The subject has an interior site location on the west side of N orth Riverside Avenue, a two-way, four- lane, arterial street with center landscaped median that travel s in a north-south direction experiencing moderate traffic volume. The site has vehicular access from two curb cuts off N. Riverside Avenue.

The subject’s access and exposure are average for a commercial site in the market area.

11 Business Trends/ Conclusions

The subject’s Rialto neighborhood is mostly built up with some land available for development in the immediate and expanded market area. The immediate district is g enerally established with a stable concentration of office, commercial and residential properties. Changes in the neighborhood are not expected in the near-term around the subject’s immediate market area. Demand for sites near Downtown Rialto that allow for redevelopment with modern office or commercial/retail properties in the area is stable and has historically been in demand due to t he North Riverside Avenue exposure/location and core features of the area.

A plentiful labor market with desirable and abundant employee housing is available in close proximity.

Overall, the subject has a good location in terms of freeway access, housing, and labor markets. These factors add to the subject’s overall desirability. Thus, steady demand is expected over the long term.

12 SITE DESCRIPTION

The following site description is based on information obtained from an interview with the property contact, public records and along with our site inspection.

Land Area (APN):

Site Area (SF) Street Frontage/Depth

0130-033-31-0000
0130-033-32-0000
8,000
20,000
See Plat Map
See Plat Map
T o t a l 28,000
±0.643-acres
See Plat Map

Surplus Land: None

Unusable Land SF: None

Corner/Interior Site: Interior

Shape/Utility: Rectangular and functional

Topography: Generally level

Zoning Designation:

Central Area Specific Plan (CASP) – Office Services (OS)

Allowable Uses: Professional/gen eral office uses, medical/denta l offices, convalescent homes, barbershop/beauty parlors, art galleries, libraries, mus eums, exhibit halls, funeral homes, hotels, lodges, medical/biologica l laboratories, nursing homes, artist studios, travel agencies, a nd like uses.

Various other uses are allowed with a conditional use permit.

Current Use: Vacant

Compliance to Zoning: Development standards in the subject’s zone area as follows:

Category Requirement
Minimum Lot Size 8.000 SF
Maximum Building Height
Six stories or 75 feet. When subject is
contiguous to any SR zone or separated
therefrom by a street, the building height shall
be limited to 16 feet or one story within 40
feet of property lines abutting said zone or
abutting a street separating such zones from
the office services zone.

Maximum
Building Coverage 55%
Side Yard Setbacks
On interior lots the side yard shall be 10% of
the width of the lot but need not exceed five
feet nor may it be less than three feet
Rear Yard Setbacks 15 feet

EXHIBIT

APN: 0130-033-31-0000 & 32-0000

PARCEL MAP

EXHIBIT

AERIAL MAP

13 S Front Yard Setbacks 15 feet

Street Improvements: Asphalt paved

Utilities: None (at street)

Flood
Zone Designation:

Zone X (Real Quest Flood Map Report)

Inside 100-Year Flood
Plain:

No

FEMA Map No./Date:
8676J-06071C8676J / September 2, 2016

Special Studies Zone -
Source:

State of California Department of Mines and Geology
Alquist Priolo: No

Seismic Hazard Zone:

Liquefaction:

Earthquake Induced
Landslides:

No

No

Disclaimer: Appraisers are not expert in the field of geology or seismic related activity. The informati on provided is from sources dee med reliable. Should questions arise about whether the subject pro perty may be impacted by proximity to Earthquake or Earthquake related fault zones an expert in this field should be consulted.

Adverse
Easements/
Encroachments:

The subject has no known adverse easements or encroachments.

Preliminary Title Report: A pre liminary title report was not pr ovided for our review. Utility easements are assumed to exist as typical. A premise of this a ppraisal is no existence3 of adverse title conditions, easements, or encroa chments that would cause a loss in value or prohibit development. Iden tification of these items is of a legal nature and an attorney specializing in this field should be consulted concerning th is field for their opinion con cerning these items. This report is not intended to render any opinion whatsoever regarding any adverse title c onditions, easements or encroachme nts that may affect the subject property.

Soils/Hazardous/ Toxic
Conditions:

This appraisal assumes the site is free of detrimental conditions that would prohibit its use. A hazardous or toxic waste investigation rep ort was not submitted for our review. This appraisal will not determine wh ether or not the appraised property has any hazardous contamination.

14 Our value estimate is predicated upon the assumption that the s ubject property is free of any toxic material, or any other adverse ge otechnical or soils conditions that would cause a loss in value. No respo nsibility is assumed for any toxic conditions o r for any expertise or engine ering knowledge required to discover a nd/or correct such conditions i f they exist

Comments:

Site Improvements:

Please refer to this appraisal report’s “Assumptions and Limiti ng Conditions” regarding soils and title conditions.

The subject has no site improvements of value. The asphalt pave ment, concrete pad/foundation from previous building, landscaped planters and other minor ancillary improvements will likely be removed from the site prior to redevelopment and have therefore been accounted by a demolition cost deduction in the valuation section of this report.

15 MARKET CONDITIONS

Information regarding the subj ect’s market conditions is derive d from independent research and information from the Costar Inland Empire Office Market Report dated June 1, 2024.

Few Inland Empire office tenants relinquished space during the pandemic, outside of government entities. The market is unique in its reliance on small busines ses, locally serving professionals, and healthcare providers, which have p rimarily maintained occupancy due to outperforming economic growth. New-to-market businesses have backfilled spaces shed by larger firms, and large vacant traditional office buildings are being redeveloped for medical use. As a result, vacancy in the market has declined from a pre-pandemic rate of 6.6%, trending at 5.8% as of the second quarter 2024. The market remains on strong footing, although trailing-year net absorption measures 90,000 SF.

Inland Empire offers an affordab le alternative to neighboring c oastal communities, with lower rents and labor costs, an attractive proposition for back-office oper ations. Rents average $27.00/SF, full service, offering a roughly 40% discount from Los Angeles. Howe ver, rent potential in the area rarely justifies development costs, so apart from medical office build ings, construction of traditional office buildings has been limited for over a decade.

Most of the traditional office buildings delivered since 2020 a re small or mid-sized and have been leased, although the largest multi-tenant building remains over 50% available. The new, premium office buildings developed in the Inland Empire in recent years are co mparatively more expensive than existing inventory and have relied on tenants of roughly 20,000 SF and under for leasing demand. Only a trickle of larger-sized leases have been signed in roughly a year. Few tenants in the market require significant blocks of space. Only 40 tenants maintain offices o f over 100,000 SF, nearly half of which are government entities, and only 115 tenants occupy offices over 50,000 SF.

Medical office construction in the market is predominantly built to suit or pre-leased. Nearly 30 medical office buildings delivered since the beginning of 2020 have added over 900,000 SF of inventory, which is currently 85% leased. Robust demand for medical office inven tory stems from cities where populations are increasing rapidl y and established cities that house a high proportion of people at or near retirement age when demand for medical services increases.

16 LEASING

The Inland Empire maintains th e lowest vacancy rate among the n ation's largest 50 office markets, at just 5.8% as of the second quarter of 2024. The market has bucked national trends, strengthening in the post- pandemic era. Office utilization didn't fall substantially, as it has in tech heavy markets and dense downtown areas. A standout, particularly for the country's west ern half, vacancy in adjacent Orange County and San Diego is nearly twice as high, as is the U.S. na tional average, while vacancy in Los Angeles is nearly three times higher.

Net absorption was negative in 2023 and at the onset of 2024 bu t has picked back up in the second quarter, led by tenants moving into medical office buildings. T he rare drop in occupancy seen in the first quarter of 2024 stems from a nearly 35,000 Class A building in the Ontario Airport Corporate Park vacated by Inqbrands. Vacancy remains below pre-pandemic levels and has hovered between 5.8% and 6% over the past year. Anchored by its growing transportation a nd warehousing industry, post- pandemic nonfarm job growth in Riverside has soared over 6%, more than double the national average.

Office employment growth has been powered by an influx of resid ents and businesses fleeing high expenses in nearby coastal markets. Occupancy levels have risen by more than 1.7 million SF since 2019, absorbing over 2% of market inventory.

Demand is relatively uniform across the region. In the largest three submarkets by inventory, Airport Area, San Bernardino, and Riverside, vacancy currently ranges from 6% to 7%. Corona/Eastville leads the market in vacancy, but it remains below 10%.

New leasing volume increased slightly in the first quarter of 2 024, which should translate into fairly stable occupancy levels this year. Smaller-sized tenants have i ncreasingly dominated leasing demand.

Large leases are relatively rare, and only seven new lease deals for over 20,000 SF were signed in 2023, including two medical office deal s, compared to nine in 2022. L easing activity in the 10,000-SF to 20,000-SF range has also moderated since the pandemic hit, from over 30 lease deals annually from 2017-2029 to fewer than 15 each year since 2021. Most leases si gned since the beginning of 2020 fall below 1,500 SF in size, with an average of under 1,900 SF, which compares to an average deal size of over 3,000 SF in Los Angeles.

Highlighting the market's rare large recent deals, Arizona Pipe line Co leased 18,600 SF at Corporate Terrace Plaza in Corona in the first quarter of 2024. In Octobe r 2023, cell tower owner Crown Castle leased 29,000 SF at 9494 Haven Avenue in Rancho Cucamonga, which was listed at an asking rate of $29.40/SF, full-service gross. Lennar Homes and Neighborhood Healthcare each signed new three-year

17 deals for 21,000 SF and 18,300 SF, respectively, at Lakeshore P laza in Corona, which was completed in 2020.

Market vacancy rises in the house view forecast, primarily due to a return toward long-term historical averages from current all-time lows and a lackluster job growth projection from Oxford Economics that falls short of historical averages. New leasing activity has im proved recently, and the market could outperform the forecast, given accelerating job growth and a limited office development pipeline.

18 19
RENT

Office rents in the Inland Empire average $27.00/SF, full service. Rent levels have increased 1.9% over the past 12 months, slowing from an average 4.1% growth rate ov er the past five years. A high concentration of in- demand medical office space has helped gen erate outperforming rent growth compared to other markets across the country, and landlords con tinuously increased rents through the pandemic as vacancies declined.

Annual rent growth for high-end 4- & 5-Star offices moderated slightly from 2022, with a 3.7% increase in 2023, outpacing Los Angeles and most U.S. markets. Rents for 4- & 5-Star inventory are up 1.9% year over year as of the second quarter of 2024. Rent levels for 4- & 5-Star inventory average $33.00/SF full service, and generally range up to $35/SF full service for top-of-the- line space.

Space availability is most compr essed within 1- & 2-Star invent ory, providing landlords leverage to push rents more consistently. Cumulative rent growth since the pandemic hit has been strongest in 1- & 2-Star buildings, but the rents for the low-quality sector only increased by 1.6% over the tailing year.

Rents for 3 Star buildings have increased by 2.7% year over year.

Rent growth has outpaced the nat ional average since 2016, and w hile national rent levels declined during the pandemic, they continually increased in the Inland E mpire in conjunction with occupancy.

Average rent levels in the Inland Empire came in 36% below the national average before the pandemic hit, with the discount narrowing to 25% as of the second quarte r of 2024 based on the uninterrupted increase in Inland Empire rents over the past three years.

A significant jump in discounted sublease availability depressed rents in many major markets over the past few years but has not affected rent trends in the Inland Empire dramatically. Sublet availability in the market measures only 0.5% compared to a national sublet availability rate five times higher at 2.4%.

Nevertheless, the listed sublet space is often offered at a discount. For example, at the Chino Gateway Corporate Plaza, a sublet space is currently listed for $25.20/ SF full service, whereas a direct space leased in April 2023 in the building carried a $30/SF full service asking rent.

20 21

CONSTRUCTION

Among the handful of traditional office buildings under construction in the Inland Empire, only one is substantial in size. Few large occupiers command enough space t o anchor large office building developments or necessitate development for their own occupancy, so most traditional office buildings under construction are being built speculatively and are relatively small.

The majority of the 170,000 SF of office space under construction in the market is outfitted for medical use, where demand is stronger. A mong the largest developments, a 60,000-SF multi-tenant medical office project underway in the North Murrieta Business Park is fully available.

Roughly 160,000 SF of office inventory has been delivered over the trailing year, also dominated by medical office space. The buildings designed for medical use ar e in strong demand due to a growing and comparatively aged population base. For example, The County of San Bernardino signed a 15-year lease for a 27,109 SF medical office building at 18818 US Highway 18 North in Apple Valley that was completed in 2023, with plans to consolidate other affiliated d epartments dispersed in Victor Valley.

In 2022, City of Hope opened the 32,000-SF Corona Regional Medical Campus, a 41,100-SF Coachella Valley Community Health Center ope ned, and Riverside University Health System opened a new 35,000-SF medical office building in Palm Springs, which they l eased for 30 years at an effective rate of $28.20/SF on a triple-net basis.

Most lease terms are typically shorter than 30 years, but medical office lease terms are typically longer than traditional office space leas es, averaging a 3.1-year term length and a larger 2,423 SF deal size historically, compared to an average term of 2.8 years and 1,869 SF size for traditional office leases.

Buildings often sell far below replacement costs, which inhibits development. Sale pricing for 4- & 5- Star office buildings over the past year averages $290/SF and r anges to a high of over $400/SF for a medical office asset. An already limited level of office space under construction across the market was roughly cut in half following the pandemic outbreak in 2020 and has subsided slightly lower over the past few years. Significantly higher costs of capital and tighter lending have limited construction starts more recently, which are being outpaced by a trickle of building deliveries.

22 23
SALES

Sales activity in the Inland Empire's office market is predomin antly driven by local and domestic private investors, while there are minimal assets large enough to entice institutional investor interest.

Institutional investors have even throttled back further recently, accounting for only 6% of sales volume in the past year from a historical 13%, while private buyers ac count for 63% of sales volume. Owner- user sales have been active as well. Users account for 24% of acquisition volume over the trailing year, up from 16% historically, and deals with owner-users on the acq uisition or disposition side accounted for 44% of sales volume in 2023.

A total of 220 deals drove $350 million in sales volume in 2023, falling 42% short of the market's prior five-year average but representing more moderate decline than the comparable 65% national downturn.

Sales volume picked up slightly in the first quarter of 2024, totaling $117 million.

Cap rates for traditional office (non-medical) buildings that traded for over $5 million to investors have increased from the low 5% range, into the 7% to 9% range due to higher borrowing costs. For example, a private, Irvine-based investor acquired Tower Office Plaza, a 71,800-SF, 4-Star building in Temecula, for $13.8 million, or $192/SF, at a 7.7% cap rate in February 2024. Cap rates are projected to rise higher through 2024, plateauing next year.

Although facing a further downturn, valuations are poised to hold up better compared to most markets due to stronger demand and rent growth, which represents a change from prior economic cycles. Peak- to-trough, average asset pricing is forecasted to fall by roughly 15%, bottoming out in 2025 near 2018 levels of just over $180/SF, and fully recovering those losses just a few years later in 2028. Conversely, due to an extreme downturn in local rents following the global financial crisis recession, it took 13 years for pricing to fully recover those losses, nearly twice as long as the national average.

Asset values are currently on th e descent, but owner- users are still taking advantage of robust price appreciation that pushed pricing higher through 2021 by pulling cash out for operations through sale- leasebacks. For example, Loma Linda University's disposition of their Beaumont building campus in July 2023 represents the largest deal by consideration closed l ast year. The 87,600 SF, building developed in 2009 was acquired by Ohio-based REIT Welltower, for $37.9 million, or $432/SF.

Harbor Associates and Taconic Capital Advisors sold the 115,520 SF Vanderbilt Plaza to the County of San Bernardino for $26.75 million, or $232/SF in January 202 4. The sale represented the third and final piece of a $70 million portfolio disposition the investor s originally acquired for $41.7 million in October 2019, having re- positioned and leased up the asset. Th e new owners, The County of San Bernardino leased space in the campus during the investors holding period.

Upholding the trend of larger office conversions to medical use, Mercury Insurance sold its 2003-built 127,000 SF building in Rancho Cucamonga at 11000 Eucalyptus Str eet to San Antonio Regional Hospital in May 2023 for $22 Million, or $173/SF, a price point more reflective of traditional office building assets. Average market pricing is down to $195/SF, fro m an all-time high of $210/SF. The Upland, California-based hospita l owners plan to convert the pr operty for health care use and are expanding operations in the area, from their lone location less than one mile away at 7777 Milliken Avenue.

24 25

ECONOMY

The Inland Empire leads Southern California markets in post-pan demic job growth and has outpaced the national average significantly, with an aggregate 6.2% gain, based on an increase of nearly 100,000 workers. Furthermore, the Inland Empire is bucking the trend of moderating job growth seen nationally heading into 2024.

Although the market's 1.6% expansion in payrolls in 2023 fell s hort of the average 3.4% growth rate achieved over the past ten years, the pace of job growth is accelerating and slightly outpaces the national average. Inland Empires' job growth forecast also outperforms t he national average, based on the continuation of positive trends established over the past decad e. The market is becoming more expensive but still maintains a competitive advantage of affordability, and many commercial real estate developments underway across th e market will provide capacity f or additional employment opportunities.

Bolstered by e-commerce growth and industrial space development , transportation and warehousing account for the majority of post-pandemic job growth in the met ro. Employment in the sector has expanded nearly 30% from pre-pa ndemic levels to over 200,000 wo rkers. However, it contracted in 2023, along with wholesale trade employment.

Due to the market's affordable and abundant land near Southern California's twin ports, most national retailers have established ware house and distribution centers i n the area, and third-party logistics providers expanded alongside the m as e-commerce adoption accele rated. The twin ports process roughly a third of all U.S. imports, much of which is transport ed further inland via rail and highway.

Imports are rebounding in the ope ning of 2024 now that West Coa st dock workers have agreed to a new labor contract.

Amazon's operations in the market have exploded. The e-commerce giant opened its first California fulfillment center in San Bernardino in 2012, expanding to approximately 30 industrial buildings across the Inland Empire today and becoming the market's largest public company, employing roughly 30,000 local workers.

Now boasting 4.7 million residents, the Inland Empire ranks as the 11th-most populated market in the nation. Employment levels rank slightly lower due to Inland's high proportion of retirees. Attracted to the market's consistently warm weather and affordability, a ple thora of retirement communities generate outsized demand for healthcare services and medical-related real estate. Tourism is vibrant in Palm Springs, Big Bear, and Temecula, primarily attracting in-state travelers.

Major cities are concentrated in the southwest portion of the m arket, lining Interstate 15, which runs northeast to Las Vegas, and Interstate 10, which runs east across the Southern U.S. Roughly within an hour's drive from Los Angeles, Riverside is the largest Inland Empire city with over 310,000 residents, followed by over 200,000 residents in San Bernardino, Fontana, and growing Moreno Valley.

San Bernardino is the largest county by land mass across the co ntinental U.S., spanning over 20,000 square miles from Los Angeles to California's border with Nevad a and Arizona. Running east from Orange County, Riverside County a dds another 7,200 square miles to the combined Inland Empire market area.

26 27

28 29

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32 Subject Property/Broker Interviews

Active brokers familiar with the subject property type and mark et area were interviewed during the course of this assignment and are listed below:

Broker Name Company Contact Number
Jacob Bernardy KW Commercial (909) 980-6868
Andrew Shirk Voit Real Estate Services (909) 545-8009 John Fox Keller Williams (909) 969-4868

These brokers provided the following insight:

SUBJECT PRIMARY MARKET SUMMARY
Subject Occupancy History:

Current: Vacant
At Close of Escrow N/A
General Trends per Broker Consensus
Rental Rates: N/A
Vacancy: N/A
Sale Prices: Sale prices for comme rcial land properties in the subject’s market appreciated throughout 2021 & early-to-mid-2022.

Recent inflation and the rise of interest rates stabilized property values over the past ±18-months with price levels similar to early-2022. Property values for this product type are anticipated to remain stable over the next 6-to-12-months due to stable, but higher interest rates.

Marketing Periods: 3 to 12 months if properly priced and market ed 12-Month Outlook: Looking forward there are signs that the rece nt market cooling off period a ssociated with record high inflation and the Federal Reserve’s response to this inflation in the form of rate hikes in 2022 and early-to-mid-2023 meetings is coming to an end.

The Fed has not raised rates in their past six meetings after raising rates by 25 basis points in each of their previous four 2023 meetings and by 50 basis points in December 2022 after three increases of 75 basis points in October 2022, September 2022 and in July 2022. The Fed also ended their bond-buying program in April 2022. These moves increased the cost of capital across the board, which includes SBA commercial property mortgage rates which have increased to over 6.50%.

The FED target range currently sits at 5.25% to 5.50%, the highest it has been since October 2007.

Major real estate investors have become more cautious on their value-add/ core investment deals which are typically underwritten on large rent growth projections over a 5-to-10- year period. The recent rise in inflation makes these deals harder to project, which has slowed investor presence in the

33 SUBJECT PRIMARY MARKET SUMMARY
market, a segment that has been significant in pushing
property values upward.

Overall, signs point to near-t erm stability now that the FED has stopped raising rates with most analysts anticipating rates to remain unchanged at the next FED meeting.

What happens in the next 12 months is somewhat
speculative, but persistent high-interest rates can negatively affect the stock market, trade and the banking sector. These factors will likely weigh on the next rate decision and the majority of analysis and futures markets point to rate cuts by summer 2024. This, of course, will all depend on the
trajectory of inflation and the state of the economy.

Sustainability of Current Market
Capitalization Rates:

Consistent with the 12-month outlook, capitalization rates are projected to remain relatively stable in the near term.

Subject Profile if Vacant and Available
Tenant Profile: Local or regional businesses
Most Likely Buyer (Owner or Investor): Owner-use r or developer

A user’s purchase decision is based on business needs and a desire to control occupancy cost. Market rent versus a mortgage payment is typically the tipping point in a decision to rent or buy. With favorable SBA financing, and low
interest rates as with the current environment, an owner user will generally elect to buy provided funds are available for the required down payment along with an adequate supply of available properties for sale.

Current Risk Level: Given the aforementioned, the risk to an ow ner-user or investor at this time is average.

Typical Lease Term: N/A
Lease Concessions N/A
Rent Estimate: N/A
Broker Land Value Estimate: $18.00 to $22.00 per square foot of l and Broker Sale Price Estimate: $450,000 - $575,000
Conclusions
Subject Vacancy & Collection Estimate: N/A

Market Conditions Adjustment:

No adjustments are warranted for sale comparables that sold since early-2023.

In speaking with brokers, we concluded on the subject’s market positioning as follows:

Strengths of the subject include its exposure from N. Riverside Avenue a nd surrounding support residential base. The property has good southland freew ay proximity and is located closed to the Rialto Civic Center.

Weaknesses of the subject include its existing site improvements that off er no value in the market and will need to be removed prior to redevelopment.

Our estimate of value takes the above factors into consideration.

34 HIGHEST AND BEST USE SUMMARY

The term highest and best use, as used in this report, is defined as follows:

The reasonably probable and legal use of vacant land or an impr oved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value.

The four criteria that the highest and best use must meet are l egal permissibility, physical possibility, financially feasible, and maximum productivity. Alternatively, the probable use of land or improved property-specific with respect to the user and timing of the use-that is adequately supported and results in the highest present value.
1 These criteria are often considered sequentially. The tests of legal permissibility and physical possibility must be applied before the remaining tests of financial feasibility and maximal productivity.

A use may be financially feasible, but this is irrelevant if it is physically impossible or legally prohibited. Only when there is reasonable probability that one of the prior, unacceptable conditions can be changed is it appropriate to proceed with the analysis.

As Though Vacant

The following measures of highest and best use are applied to the subject site as though vacant:

1. Legally permissible: The subject’s zoning “Central Area Specif ic Plan – Office Service” allows primarily for professional and medical/dental office use s. However, some commercial/retail uses along with hotels, retirement homes, stu dios and like uses are allowed by right. Various other uses are allowed with an active conditional use permit.

2. Physically possible: the subject has a rectangular-shape and i s functional. The property has adequate access and exposure.

3. Financially feasible: even though the commercial real estate m arket had been appreciating through early-to-mid-2022, recent monetary policy by the Federa l Reserve warrants attention by potential developers and could impact profitable future development in the near-term.

4. Maximally productive: based on the above, construction of an of fice use when market conditions warrant.

Overall, a prudent developer would monitor current monetary policy, but at the current time values and rent levels for office properties are relatively stable making build-to-suit development feasible in many cases.

Most Probable Buyer

Based on the subject’s size, configuration and current occupanc y status, the most likely buyer is an owner-user or developer that would purchase the site for future build to suite development.

1(Source: Appraisal Institute, The Dictionary of Real Estate Appraisal)

35 VALUATION ANALYSIS

The subject is commercial/office zoned land without any buildin g improvements and no site improvements of value. The Sales Comparison Approach been conducted in this appraisal report in the context of land valuation in order to estimate the market value of the property.

The Sales Comparison Approach i s well supported by recent sales of similar sites in the subject’s immediate and expanded market area that sold for land value, an d reflects the attitudes of knowledgeable buyers and sellers in the marketplace. The price per square foot of land derived from this approach is the tool often utilized by buyers, sellers, and brokers as the basis for purchasing/valuing properties like the subject.

The Income Approach has been excluded, in this since, market participants do not consider the income producing potential of a vacant parcel of land that is primarily purchased by an owner-user or developer.

Additionally, capitalization rate estimates derived from invest or-owned sites do not provide credible valuation results consistent with the Highest and Best Use conclusion.

The Cost Approach to value has been excluded due to the property’s undeveloped status. The value of the subject is 100% in the land minus the cost to demolish the existing site improvements.

36 DIRECT SALES COMPARISON APPROACH

The initial sales survey focused on similar commercial zoned sites with a focus on office-related uses (e.g. office zones, commercial office, specific plan zoned with focus on office, etc.) in the immediate Rialto market and expanded area. However, due to a lack of re cent sales or listings of sites with this zoning that focuses primarily on office development, the search parameters were expanded to include the most similar commercial zoned sites in the immediate area and competing commercial markets with adjustments made as necessary.

The comparable sales selected were confirmed by the following s ources: CoStar, LoopNet, public records and the parties involved in the transactions (when poss ible). Approximately 40 sales and listings were analyzed and from those potential data points, four closed sales and one active listing have been selected as being the best indicators of the subject’s current market value. These comparable sales are summarized on the adjustment grid that follows.

37 Subj ect Sale 1 Sale 2 Sale 3
Address 308 N. Riverside Avenue 9098 Sierra Avenue Western Avenue 1 5231 Foothill Boulevard City Rialto Fontana San Bernardino Fontana
Zip Code 92376 92335 92411 92335
County San Bernardino San Bernardino San Bernardino San Bernardino Distance from Subject -- 4.0 Miles SW 15.0 Miles NE 5.5 Miles NW Assessor Parcel Number(s) 0130-033-31 & 32-0000 0193-151-40-0000 0 143-063-04 0232-011-19-0000 Occupancy At Time of Sale - Vacant Vacant Vacant
Date of Sale - 5/6/2024 12/4/2023 9/7/2023
Document No. - 104583 #299049 218978
Time on Market - 237 Days 0 Days 316 Days
1031 Exchange /Leaseback - No No No
Verification Broker/ Linda Ojeda/
JohnHart Real Estate Seller/ Welbe Health
Broker/ Andy Pereira/
Century Commercial
Sale Price - $308,000 $1,552,500 $595,000
Price per SF of Bldg. - $22.85 $24.75 $16.89
Net Operati ng Incom e (NOI) N/A N/A N/A

NOI/SF N/A N/A N/A
Overal l Rate (OAR) N/A N/A N/A
Rights Transferred Fee Simple Fee Simple Fee Simple
Financing $308,000 (100%)/ All Cash
Sale
$1,552,500 (100%)/ All Cash
Sale
$595,000 (100%)/ All Cash
Sale
Buyer Type Developer Developer Developer
Cap Rate N/A N/A N/A
Conditions of Sale N/A N /A N /A
Listing Adjustment -- N/A N/A N/A
Market Conditions Adjustments Stable Stable Stable
Adjusted Price/SF -- $22.85 $24.75 $16.89

ADJUSTMENTS
Zoning CASP - OS FBC - DG CO C-2
Lot Shape/Utility Rectangular/ Functional Recta ngular/ Functional Rectangular/ Functional Mostly Rectangular/ Functional
Topography Generally Level Similar Similar Similar
Utilities To Site To Site To Site To Site
Site Location (Corner vs. Interior) Interior Non-Sig. Corner -3% In terior Interior Site Exposure Arterial Arterial Arterial Foothill Corridor - 2% Location Rialto Fontana San Bernardino Fontana
Neighborhood Surroundings Office/ Commercial/
Residential
Sl. Superior Commercial/
Retail -5%
O ffice/ Commercial/
Residential/ Hospital
Proximity/ Superior
- 10% Sl. Inferior Commercial/Office 5%
Site Size (Sq.Ft.) 28,000 13,482 -3% 62,726 2% 35,236
Site Improvements None of Value None None None
Total Adjustments -11% -8% 3%
Adjusted Value/SF of Building $17.39 $20.33 $22.77

SUMMARY OF COMPARABLE SALES

38 Subject Sale 4 Sale 5
Address 308 N. Riverside Avenue 1364 W. Foothill Boulevard 851 W. Foothill Boulevard City Rialto Rialto Rialto
Zip Code 92376 92376 92376
County San Bernardino San Bernardino San Bernardino
Distance from Subject -- 1.6 Miles NW 0.9 Miles NW
Assessor Parcel Number(s) 0130-033-31 & 32-0000 0128-011-32-0000 0 128-361-20-0000 Occupancy At Time of Sale - Vacant Vacant
Date of Sale - 1/13/2023 Listing
Document No. - 9607 N/A
Time on Market - 189 Days 393 Days Total; 60 Days @
Current Price
1031 Exchange /Leaseback - No No
Verification Broker/ Moon K im/ Keller
Williams Realty
Broker/ Rick Lazar / Lee &
Associates
Sale Price - $2,000,000 $1,075,000
Price per SF of Bldg. - $22.84 $21.46
Net Operati ng Incom e (NOI) N/A N/A

NOI/SF N/A N/A
Overall Rate (OAR) N/A N/A
Rights Transferred Fee Simple Fee Simple
Financing $2,000,000 (100%)/ All Cash
Sale N/A
Buyer Type Developer Developer
Cap Rate N/A N/A
Conditions of Sale N /A N /A
Listing Adjustment -- N/A Active Listing -5%
Market Conditions Adjustments N/A N/A
Adjusted Price/SF -- $22.84 $20.39

ADJUSTMENTS
Zoning CASP - OS FBSP - RMU FBSP - CP
Lot Shape/Utility Recta ngular/ Functional Rectangular/ Functional Rectangular/ Functiona l Topography Generally Level Similar Similar
Utilities To Site To Site To Site
Site Location (Corner vs. Interior) Interior Signalized Corner -5% Interior Site Exposure Arterial Foothill Corridor - 2% Foothill Corridor - 2% Location Rialto Rialto Rialto
Neighborhood Surroundings O ffice/ Commercial/
Residential
Sl. Superior Commercial/
Retail/ Office/ Residential/
Land
-5% Office/ Commercial/ Land/
Similar Overall
Site Size (Sq.Ft.) 28,000 87,555 3% 50,094 2%
Site Improvements None of Value None None
Total Adjustments -9% 0%
Adjusted Value/SF of Building $20.39 $20.79

SUMMARY OF COMPARABLE SALES

EXHIBIT

COMPARABLE SALES MAP

39 Sales Comparison Summary

The comparables are located in Ri alto or the competing commerci al markets of Fontana and San Bernardino within 15.0 miles of the subject. The comparables range in size from 13,482 square feet to 87,555 square feet with unadjusted sale/asking prices ranging from $16.89 to $24.75 per square foot of land area. The sales closed between January 2023 and May 2024.

Comparable No. 5 warranted a downward listing adjustments to ac count for buyer/seller negotiations that typically take place prior to properties closing escrow that generally lead to final sale prices below the asking price.

With the exception of No. 3, all of the comparables warranted a djustments for their differences in site size in comparison with the subject’s 28,000 square feet. Spec ifically, No. 1 is applied a downward adjustment for smaller site size while Nos. 2, 4 & 5 are applied upward adjustments for larger site size.

These adjustments are based on the principle of economies of scale that states, all other factors equal a smaller site will sell for more on a per square foot basis in comparison with a similar larger site.

Additional adjustments are included in the following paragraphs.

Land Sale No. 1 ($22.85/SF of land) is a 13,482 square foot, form based code - commercial zoned site located 4.0 miles southwest of the subject at 9098 Sierra Avenu e in Fontana, a similar district.

Downward adjustments are made for non-signalized corner vs. int erior site location and slightly superior neighborhood surroundings. After adjustments, No. 1 in dicates a value of $20.33 per square of land for the subject.

Land Sale No. 2 ($24.75/SF of land) is a 62,726 square foot, co mmercial-office zoned site located 4.0 miles southwest of the subject on Western Avenue in San Bernardino, a similar district. No. 2 does not have a physical address and is recognized as APN: 0143-063-04-0 000. A downward adjustment is made for superior neighborhood surroundings. After adjustments, No. 2 indicates a value of $22.77 per square foot of land for the subject.

Land Sale No. 3 ($16.89/SF of land) is a 35,236 square foot, commercial zoned site located 15.0 miles northeast of the subject at 15231 Foothill Boulevard in Fontana , a similar district. A downward adjustment is made for slightly exposure along the Foothill Boulevard corridor. An upward adjustment is applied for slightly inferior neighborhood surroundings. Aft er adjustments, No. 3 indicates a value of $17.39 per square foot of land for the subject.

Land Sale No. 4 ($22.84/SF of land) is an 87,555 square foot, s pecific plan/commercial zoned site located 1.6 mile northwest of the subject at 1364 West Foothill Boulevard in Rialto, a similar district.

Downward adjustments are applie d for signalized corner vs. inte rior site location, slightly superior exposure and neighborhood surroundi ngs. After adjustments, No. 4 indicates a value of $20.79 per square foot of land for the subject.

Land Sale No. 5 ($20.39/SF of land, adjusted for active listing status) is a 50,094 square foot, commercial zoned site located 0.9 mile northwest of the subject at 851 West Foothill Boulevard, a similar district. A downward adjustment is warranted for slightly superior exposure. After adjustments, No. 5 indicates a value of $20.39 per square foot of land for the subject.

40 After adjustments, the closed sales indicate a subject value of $17.39 to $22.77 per square foot of land.

The active listings indicates an adjusted value of $20.39 per square foot of land and has been included as a benchmark to help illustrate achievable value for sites li ke the subject in the Rialto market area.

The majority of broker opinion of land value for the subject is in the $18.00/SF to $22.00/SF range.

Secondary weight is given to No. 5 as an active listing in the subject’s market. No. 2 is also given secondary weight due to its location across the street from a m ajor hospital. Nos. 1, 3 & 4 are given primary weight as the most similar recent sales of comparable sites.

Taking into account all factors, a concluded subject value via the Sales Comparison Approach of $20.00/Sq. Ft. of Land is reasonable, consistent with m arket levels and well supported by the comparable sale properties and market research.

Indicated Value from the Sales Comparison Approach

Based on our findings, the concluded value for the subject property is as follows:

28,000 Sq. Ft. of Land x $20.00/ Sq. Ft., rounded $560,000

Demolition Costs

The subject is improved with ± 22,000 square feet of older asphalt, a ± 6,000-square-foot concrete building pad remaining from the previous office building that w as destroyed by fire earlier this year and various other minimal site improvements that are near (or a t) the end of their economic lives and would likely be removed prior to redevelopment. As such, consi stent with how a developer would value the property, costs associated with removing the existing improvements in order for the property to reach its highest and best use would need to be accounted for in valuing the subject.

In order to arrive at a credible demolition cost for the proper ty, current cost manuals were reviewed (section 66 of Marshall & Swift) and local brokers and contract ors were interviewed. The following table summarizes the findings from these sources and indicates the demolition cost conclusion that will be applied to the subject in this analysis.

Source: Items Included: Price Range: Total Estimate for Subject:

Marshall & Swift
(Section 66)
±6,000 SF concrete pad/foundation
from former building
$2.05/SF - $4.60/SF
($12,300 - $27,600) $25,000
Marshall & Swift
(Section 66) ±22,000 SF of asphalt $0.69/SF - $1.06/SF
($15,180 - $23,320) $20,000
Marshall & Swift/
Contractor Interviews
Demolition permits/fees,
hauling/recycle/landfill costs,
temporary fences, supervision,
profit, miscellaneous etc.
$5,000 - $15,000 $10,000
Broker Opinion
Paved yards, parking lots, etc.
demolition cost estimate (all
inclusive)
$1.50/SF of Land - $2.50/ SF of Land
(28,000 SF Parcel) ±$40,000 - $70,000
Conclusion -- $55,000
Demolition Cost Estimate for 308 N. Riverside Avenue

41 As indicated in the table above, a demolition cost for the subject of $55,000 is credible. This demolition cost is deducted from the indicated land value arriv ed at in the Land Sales Comparison Approach as a necessary step to arrive at the “as is” market value for the property.

Indicated Total “As Is” Market Value from the Sales Comparison Approach

Based on our findings, the concluded value for the subject property is as follows:

RECONCILIATION

Indicated values from the Income and Sales Comparison Approaches are summarized as follows:

Sales Comparison Approach: $505,000

Only one approach to value, the Sale Comparison Approach, has b een conducted in this appraisal report. The Sales Comparison Approach is based on comparable sa les of similar commercial zoned sites located in the immediate and expanded market area. These comparables are reasonably similar to the subject and were analyzed on a price per square foot of lan d since the subject site is unimproved.

All the comparables are reasonably similar to the subject leadi ng to credible results. An owner-user buyer would place full weight on this approach when making thei r purchase decision. Consequently, this approach is given full consideration as an indication of value for the subject.

Costs associated with demolishing the subject’s existing site i mprovements were established and deducted from the value of the site to arrive at a total “as is” market value for the subject.

FINAL VALUATION

The final valuation is summarized as follows:

Valuation Scenario Date of Value Property Rights Final Value* Current As Is Market Value
(Based on 3 – 9-month exposure period)
July 9, 2024 Fee Simple $505,000

*Please refer to Assignment Conditions.

28,000 Sq.Ft. x $20.00/Sq.Ft. of Land $560,000
Less: Demolition Cost ($55,000)
"As Is" Market Value, Rounded $505,000
Sales Comparison Approach Conclusion

42 EXPOSURE TIME AND MARKETING PERIOD

Exposure Time is a retrospectiv e estimate of the time required to sell the subject during market conditions that existed prior to our date of value.

Marketing Period is an estimate of the time required to sell th e subject during market conditions that exist as of our date value. The marketing period estimate is s ubject to variation depending upon evolving events and unforeseen changes in the economy or marketplace.

Exposure Time and Market Period estimates are based information obtained from comparable sales data, and broker interviews while taking into consideration current market trends.

The comparable sales and pending sale contained in this report indicate that a period of 0 days to 316 days was required to consummate a sale. The active listing has been available for 60 days at its current asking price without selling.

Brokers referenced in this report that over the past 12-months a reasonable exposure period for the subject would have ranged from 3 to 9 months if properly priced , which is supported by the majority of the sales reviewed during the course of this assignment. Br okers indicated that demand could potentially decrease slightly in the near-term due to the econo mic climate and high interest rates but are optimistic at this point that it will remain relatively sta ble over the next 12-months. As such, a marketing period above the expos ure period is reasonable. Over all, a marketing period of 3 to 12 months is reasonable.

During stable or rising markets, exposure and marketing times h ave been the same. However, in a softening market, it is logical that exposure times will be sho rter than marketing times. Due to the current business climate, marketing times are anticipated to potentially be longer.

In consideration of current market conditions, a reasonable Exp osure Time and Marketing Period for the subject is estimated as follows.

Exposure Time
Date of Value Marketing Period

3 to 9 Months July 9, 2024 3 to 12 Months

The price that may be achieved in the future at the end of the marketing period may or may not be equal to the current appraised value estimate, depending on potential changes in the physical real estate, demographic and economic trends, the real estate market, tenanc y, property operations and the effectiveness of the marketing program, among other factors.

43 DEFINITIONS

The following is a general list of real estate appraisal definitions:

Definition of Market Value
2 Market Value means the most probable price which a property should bring in a competitive and open market under all conditions requi site 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 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 they consider their own best interests.

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

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

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.

Definition of Cash Equivalency

An analytical process in which the sale price of a transaction with nonmarket financing or financing with unusual conditions or incentives is converted into a price expressed in terms of cash.

Definition of “As Is Value”

As Is Value means an estimate of the value of the property in t he condition observed upon inspection and as it physically and legally exists without hypothetical conditions, assumptions or qualifications as of the date the appraisal is prepared.

1. 2 Source: Federal Deposit Insurance Corporation, OCC, 12 CFR, P art 34, Subpart C-Appraisals 34.42 Definitions (h).

44 Definition of “Stabilized Value”

For purposes of this report, Stabilized Value is based on the s ubject being “fully” occupied at market terms and conditions and that any costs to achieve a market-based, stabilized occupancy are complete.

Costs associated with achieving stabilized occupancy typically include: tenant improvements, rent loss during an absorption period, leasing commissions and entrepreneurial profit. If applicable, these costs would be deducted from a prospective stabilized value to arrive at the “As Is” value conclusion.

Formal definitions of “Stabilized Value” are:

1. A value opinion that excludes from consideration any abnorm al relationship between supply and demand such as is experienced in boom periods, when cost and sa le price may exceed the long-term value, or during periods of depression, when cost and sale price may fall short of long-term value.

2. A value opinion that excludes from consideration any transitory condition that may cause excessive construction costs, e.g., a bonus or premium for material, the abnormal inefficiency of labor, the cost of delay or an excessive sale price, e.g., a premium paid due to a temporary shortage of supply.

Prospective Value Opinion

A forecast of the value expected at a specified future date. A prospective value opinion is most frequently sought in connection with real estate RETECHSs that are proposed, under construction, or under conversion to a new use, or those that have not achieved sellout or a stabilized level of long-term occupancy at the time the appraisal report is written.

Hypothetical Condition

That which is contrary to what exists but is supposed for the p urpose of analysis. Hypothetical conditions assume conditions contrary to known facts about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis.

A hypothetical condition may be used in an assignment only if:
• Use of the hypothetical condition is clearly required for legal purposes, for purposes of reasonable analysis, or for purposes of comparison;
• Use of the hypothetical condition results in a credible analysis; and • The appraiser complies with the disclosure requirements set for th in USPAP for hypothetical conditions.
3 3Dictionary of Real Estate Appraisal, Appraisal Institute, Fifth Edition.

45 Extraordinary Assumption

An assumption, directly related t o a specific assignment, which , if found to be false, could alter the appraiser's opinions or conclusions. Extraordinary assumptions presume as fact otherwise uncertain information about physical, lega l, or economic characteristics of the subject property; or about conditions external to the prope rty such as market conditions o r trends; or about the integrity of data used in an analysis.

An extraordinary assumption may be used in an assignment only if:
• It is required to properly develop credible opinions and conclusions; • The appraiser has a reasonable basis for the extraordinary assumption; • Use of the extraordinary assumption results in a credible analysis; and • The appraiser complies with the disclosure requirements set forth in USPAP for extraordinary assumptions.
4 Definition of Fee Simple Estate

Absolute ownership unencumbered by any other interest or estate , subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.

Source: Dictionary of Real Estate Appraisal, Appraisal Institute, Fifth Edition.

Definition of Leased Fee Estate

A leased fee estate is an ownership interest held by a landlord with the right of use and occupancy conveyed by lease to others; the rights of the lessor (the leas ed fee owner) and the leased fee are specified by contract terms contained within the lease.

Source: Dictionary of Real Estate Appraisal, Appraisal Institute, Fifth Edition.

Definition of Leasehold Estate

The right to use and occupy real estate for a stated term and u nder certain conditions conveyed by a lease.

Source: Dictionary of Real Estate Appraisal, Appraisal Institute, Fifth Edition.

Tangible Property

Property that can be perceived with the senses; including land, fixed improvements, furnishings, merchandise, cash, and other items of working capital used in an enterprise.

Source: Dictionary of Real Estate Appraisal, Appraisal Institute, Fifth Edition.

4 Ibid

46 Intangible Property (Intangible Assets)

Nonphysical assets, including but not limited to franchises, tr ademarks, patents, copyrights, goodwill, equities, securities, and contracts as distinguished from physical assets such as facilities and equipment that can be perceived with the senses; including land, fixed im provements, furnishings, merchandise, cash, and other items of working capital used in an enterprise.

Source: USPAP, 2010-2011 Edition.

Definition of Going Concern Value

“Going-Concern” value is defined as the value existing in a pro ven property operation considered as an entity with business establishe d as distinct from the value of the real estate only, ready to operate, but without a going business. The market value of a “going concern” reflects the current and prospective operation of the property. In this property type, the “going concern” is comprised of both tangible and intangible property. Further distinctions may be made between “ personal” and “real” property. The “going concern” value may incl ude contributions of land, improv ements, furnishings, fixtures and equipment (FF&E), goodwill, muni cipal approvals, licenses, occu pancy, the benefits of favorable financing (if any), and all other tangibles and intangibles required for normal operation of the property.

Total Assets of a Business

Total Assets of a Business (TAB) are valued under one of two pr emises: a going concern premise and a liquidation premise. The TAB are comprised of tangible property and intangible property. The value of a business as a going concern equals the value of tangible assets plus the value of intangible assets.

• The Going Concern Premise: The a ssumption that the company is e xpected to continue operating well into the future (usually indefinitely).
• The Liquidation Premise: The assumption that a company will cease operations.

In this report, we are not valuing the going concern premise.

Source: Dictionary of Real Estate Appraisal, Appraisal Institute, Fifth Edition.

Furniture Fixtures & Equipment (FF&E)

Business trade fixtures and personal property, exclusive of inventory.

Source: Dictionary of Real Estate Appraisal, Appraisal Institute, Fifth Edition.

Furniture Fixtures & Equipment (FF&E) Estimate

The personal property, fixtures and intangible (FF&E) items are excluded from this appraisal report’s valuation.

47 Exposure Time

1. The time a property remains on the market.

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

Source: Dictionary of Real Estate Appraisal, Appraisal Institute, Fifth Edition.

Marketing Time

An opinion of the amount of time it might take to sell a real o r personal property interest at the concluded market value level dur ing the period immediately afte r the effective date of an appraisal.

Marketing time differs from exposure time, which is always presumed to precede the effective date of an appraisal. (Advisory Opinion 7 of the Appraisal Standards Bo ard of The Appraisal Foundation and Statement on Appraisal Standards No. 6, “Reasonable Exposure Ti me in Real Property and Personal Property Market Value Opinions” address the determination of re asonable exposure and marketing time.)

Source: Dictionary of Real Estate Appraisal, Appraisal Institute, Fifth Edition.

CERTIFICATION

We certify that, to the best of our knowledge and belief, . . .

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

 The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are our p ersonal impartial, and unbias ed professional analyses, opinions, and conclusions.

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

 We have no bias with respect to the property that is the subjec t of this report or to the parties involved with this assignment.

 Our compensation is not based upon the reporting of a predeterm ined value or direction in value that favors the cause of the client, the amount of the value es timate, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.

 Our engagement in this assignment was not contingent upon devel oping or reporting predetermined results a requested minimum valuation, specific valuation or the approval of a loan.

 The report analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of Code of Professional Eth ics and the Standards of Professional Practice of the Appraisal Institute.

 Our analysis did not base, either partially or completely, the estimate of value on the race, color, religion, sex, handicap, familial status, health or national or igin of the present or prospective owners, occupants or users of the subject property or of the pr esent or prospective owners, occupants or users of the properties in the vicinity of the subject property.

 The appraisal was completed without regard to race, color, reli gion, national origin, sex, marital status or any other prohibited basis, and does not contain refe rences which could be regarded as discriminatory.

 The use of this report is subject to the requirements of the Ap praisal Institute relating to review by its duly authorized representatives.

 Andrew P. Mitrosilis, MAI and Te d P. Douglas, MAI are principal s/partners of AppraisalPacific, Inc. located in Long Beach, California. One or both have manag ed this assignment from the time of engagement to delivery of final report. The signatory of th is report (Mitrosilis or Douglas) played a significant role in managing the appraisal process and reviewing the final report produced by the senior appraiser on this assignment. Part of this proce ss included a review of all subject photos including aerial views along with a review of all compar able photos. When specifically requested by our client or when clarification of the appraisal problem is required, a personal subject site inspection is made. Ted P. Douglas, MAI is the managing appraiser on this assignment and has not made a personal inspection of the subject property.

 Appraiser, Tim Howman, CGREA has made a personal inspection of the property that is the subject of this report and was thoroughly involved in the entir e appraisal process leading to final valuation conclusions.

 We have not provided services regarding the subject property wi thin the three year period immediately preceding acceptance of the assignment, as an appraiser or in any other capacity.

 Evaristo (Tony) Montoya, Trainee, assisted with research and wr iting for this appraisal. The signatories of this report are solely responsible for the final valuation conclusions.

 The appraisers analysis, opinion and conclusions were developed , and the report has been prepared in conformity with Title X1 of the Financial Instituti ons Reform, Recovery, and Enforcement Act of 1989 (FIRREA) and its regulations, as well a s Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation.

 We have adequate education, and have previously appraised many properties similar to this type of property, and we are familiar with the area. We are compete nt to appraise the subject property.

Please see the qualifications section of this report for additional information.

 As of the date of this report, Ted P. Douglas, MAI has complete d the continuing education program for Designated Members of the Appraisal Institute.

 This appraisal is intended to com ply with the OCC’s amended App raisal Rule, effective June 7, 1994, as published in the Federal Register, Volume 59, No. 108, and with the Interagency Appraisal and Evaluation Guidelines, dated December 10, 2010.

TED P. DOUGLAS, MAI
State Certified General Appraiser
Certificate No. AG 001946
CA/Expires 14-Oc
t-24

TIM HOWMAN, CGREA
State Certified General Appraiser
Certificate No. AG 035823
CA/Expires 07-Dec-24

QUALIFICATIONS
OF
TED P. DOUGLAS, MAI, AI-GRS

PROFESSIONAL BACKGROUND

1999-Present

Principal, Appraisal Pacific Inc., 3738 Bayer Avenue, Unit 101, Long Beach, California 90808 TEL: (562) 377-1000 EMAIL: [email protected]

1995-1999

Senior Property Tax Consultant with Marvin F. Poer & Company, a national, state and local tax consulting firm, Irvine, California. Prepare d formal property tax appeals for oral presentation before appointed assessment appeal boards at the local jurisdiction level in Los Angeles, Orange, San Bernardino, Ventura and San Diego Counties. Additionally, prepared written appraisals for submission to boards and/or assessor on a variety of commercial and industrial properties, ranging in value from $1,000,000 to $150,000,000.

1985-1995

Senior Commercial Real Estate Appraiser with Diversified Realty Appraisal, Newport Beach, California.

Performed valuations, prepared narrative appraisal reports and provided consulting services on a wide variety of commercial, industrial, residential and special purpose prop erties, ranging in value from $500,000 to $50,000,000. Analyses often requi red complex discounted cash f low analyses. Also, responsible for training and supervising several members of the appraisal staff.

PROFESSIONAL AFFILIATION

Appraisal Institute, MAI designation, AI-GRS designation

STATE CERTIFICATION

State of California, “Certified General Real Estate Appraiser” License No. AG001946; Expires October 14, 2024

EDUCATIONAL ACTIVITIES

Bachelor of Science, 1982, University of California, Riverside Major: Administrative Studies

Sampling of Appraisal Institute Courses: Real Estate Appraisal Principles; Basic Valuation Procedures; Standards of Professional Practice; Capitalization Theory and Techniques, Parts A and B; Case Studies in Real Estate Valuation; Report Writing and Valuation Analysis, Fundamentals of Separating Real, Personal Property and Intangible Business Assets, Review Theory. Official AI Transcript is available upon request.

QUALIFICATIONS
OF

TIM HOWMAN

PROFESSIONAL BACKGROUND

2004-Present

Currently an independent fee appraiser associated with
APPRAISAL PACIFIC, INC.

Commercial Real Estate Appraisal located at:
3738 Bayer Avenue, Unit 101, Long Beach, California 90808

TEL: 562-377-1000; FAX: 562-377-1001

GENERAL EXPERIENCE

Experienced in providing narrativ e appraisals on investment and owner user industrial, office, commercial, retail and mixed u se properties throughout Southern C a l i f o r n i a ; p r i m a r i l y i n L o s Angeles, Orange, Riverside, San Diego and San Bernardino counties.

STATE CERTIFICATION NUMBER

State of California AG035823: Expires 12/07/2024

EDUCATIONAL ACTIVITIES

Bachelor of Arts; California State University Dominguez Hills; Major: Economics

Appraisal Institute Courses: Real Estate Appraisal Principles; Real Estate Appraisal Procedures, Basic Income Capitalization, General Applications, Income Valua tion of Small, Mixed-Use Properties, USPAP 2018, Residentia l and General Report Writing and Case Studies, Business Practices and Ethics, Office Building Valuation, Advanced Appli cations, Advanced Market Analysis and Highest and Best Use, Advanced Concepts & Case Studies, Qua ntitative Analysis, Real Estate Finance Statistics and Valuation Modeling, Advanced Income Capi talization and Advanced Market Analysis and Highest and Best Use.

ASSUMPTIONS AND LIMITING CONDITIONS

This report is made expressly subject to the conditions and stipulations following:

Specific

1. It is assumed that the property is in compliance with all appli cable federal, state and local laws, ordinances, regulations, building standards, use restrictions and zoning un less the lack of compliance is stated in the appraisal report. Determining and reporting on such compliance w e r e n o t p a r t o f t h e s c o p e o f w o r k f o r t h i s assignment.

2. It is assumed that all water, sewer facilities and utilities (w hether existing or proposed) are or will be in good working order, are safe for use, and are or will be sufficient to serve the current or proposed uses of the subject property or any structures or other improvements. Determining a nd reporting on such matters were not part of the scope of work for this assignment.

3. Unless otherwise stated in this report, the past or current exi stence of hazardous materials or environmental contamination on, below or near the subject property was not observed or known by the appraiser. The appraiser, however, is not qualified to detect such substances or to make determinations about their presence. The presence of substances such as asbestos, u rea-formaldehyde foam insulation and other potentially hazardous materials or environmental contamination may affect the value of the propert y. Unless otherwise stated, the value estimated is predicated on the assumption that there is no such material on, below or affecting the property that would cause a loss in value. No responsibility is assumed for such co nditions or for any expertise or engineering assistance required to discover them. The intended user is urged to retain an expert in this field, if desired.

4. No adverse easements or encroachments were observed at the time of our inspection. We have reviewed neither legal opinions nor engineering reports concerning the aforement ioned. We assume the subject property to be free of any easements, covenants or restrictions that would hav e a negative impact on the value of the property.

Any existing easements, covenants or restrictions are assumed n ecessary for the highest and best use of the site.

These assumptions are formally incorporated into various estimates of this report.

5. We have not received a soils report in connection with this appraisal assignment. In the absence of a soils report, we assume soil conditions to be adequate to support the existin g improvements into the future. This assumption is incorporated into this report.

6. A geologic report covering the subject property was not provide d. In the absence of a geologic report, we assume geologic conditions to be stable enough to support the e xisting improvements into the future. In addition, we assume that no geologic conditions exist which wou ld adversely affect the value of the site or prevent the development of the site to its highest and best use. These assumptions are formally incorporated into various estimates of this report.

7. The subject property is apprais ed without a speci fic compliance survey having been conducted to determine if the property is or is not in conformance with the requirements of the Americans with Disabilities Act. The presence of architectural and co mmunications barriers that are structural in nature that would restrict access by disabled individuals may adversely affect the property’s value, marketability, or utility. The analysis contained herein assumes the subject is not impacted by any aspects of th e Americans with Disabilities Act and that there are no known non-compliance items. Subject to confirmation by an appropriately licensed entity, this assumption is incorporated into various estimates of this report.

8. The appraiser is not qualified to determine the existence of mo ld of any type or whether the mold if any might pose any risk to the property or its inhabitants. Additional i nspection by a qualified professional is recommended.

9. The appraiser is not a home or environmental inspector. The ap praiser provides an opinion of value. The appraisal does not guarantee that the property is free of defec ts or environmental problems. The appraiser performs an inspection of visib le and accessible areas only. M old may be present in areas the appraiser cannot see. A professional home inspection or environmental inspection is recommended.

ASSUMPTIONS AND LIMITING CONDITIONS
(Continued)

General

1. We assume no responsibility for matters that are legal in nature.

2. The appraisal covers the property described only.

3. Sources of information are believed to be correct and, where feasible, have been verified.

4. That the date of value to which the conclusions and opinions ex pressed in this report apply, is set forth in the letter of transmittal. Further, that the dollar amount of any value opinion herein rendered is based upon the purchasing power of the American dollar on that date.

5. That the appraiser(s) assumes no responsibility for economic o r physical factors that may affect the opinions herein stated occurring at some date after the date of value.

6. That maps, plats and exhibits included herein are for illustrat ion only as an aid in visualizing matters discussed within the report. They should not be considered as survey, or relied upon for any other purpose, nor should they be removed from, reproduced, or used apart from this report.

7. B y r e a s o n o f t h i s a p p r a i s a l , w e a r e n o t r e q u i r e d t o g i v e t e s t i mony or to be in attendance in court or at any governmental or other hearing with reference to the property wi thout prior arrangements having been made relative to such additional employment.

8. Neither all nor any part of the contents of this report (especi ally any conclusions as to value, the identity of the appraiser or the firm with which they are connected, or any ref erence to the Certified General certification) shall be disseminated to the public through advertising media, public relations media, sales media or any other public means of communication without the prior written consent and approval of the authors.

9. Possession of this report, or a copy of it, will not carry with it the right of publication. The report may not be used for any purpose by any person other that the party to whom it is addressed without the written consent of the appraiser and the appraiser specifically disclaims any liab ility to such unauthorized third parties. In any event, the report may be used only with proper written qualific ations and only in its entirety for its stated purpose.

A D D E N D A

SUBJECT PHOTOGRAPHS

VIEW OF THE SUBJECT FROM N. RIVERSIDE AVENUE ADDITIONAL VIEW OF THE SUBJECT SITE

ADDITIONAL VIEW OF THE SUBJECT SITE

ADDITIONAL VIEW OF THE SUBJECT SITE

LOOKING SOUTH ALONG N. RIVERSIDE AVENUE; THE

SUBJECT AHEAD AND TO THE RIGHT
LOOKING NORTH ALONG N. RIVERSIDE AVENUE; THE

SUBJECT AHEAD AND TO THE LEFT

COMPARABLE SALE AERIALS

SUBJECT SALE NO.1
SALE NO.2 SALE NO.3
SALE NO.4
SALE NO.5
308 N Riverside Ave, Rialto, CA 92376-5965
APN: 0130-033-32-0000

San Bernardino County Data as of: 06/20/2024

Owner Information
Location Information
Last Transfer / Conveyance - Current Owner
Last Market Sale
Prior Sale Information
Property Characteristics
Site Information
Tax Information
Property Detail Report
Owner Name: Aram & Yervand Property Management L
Vesting:

Mailing Address: 308 N Riverside Ave, Rialto, CA 92376-5965 Occupancy: Owner Occupied Legal Description: Buxton And Lane Sub Lot 8 Ex Mnl Rts Reservation Of Record County: San Bernardino, CA APN: 0130-033-32-0000 Alternate APN: 0130-033-32-0000 Census Tract / Block: 003700 / 1004 Munic / Twnshp: Fontana Twnshp-Rng-Sec: Legal Lot / Block: 8 / Subdivision: Buxton And Lane Tract #: Legal Book / Page: 0130 / 033 Neighborhood: Downtown Rialto School District: Rialto Unified School District Elementary School: Charlotte N. Werne... Middle School: Rialto Middle Scho... High School: Eisenhower Senior...

Latitude: 34.10471 Longitude: -117.37097
Transfer / Rec Date: 06/06/2019 / 06/18/2019 Price: Transfer Doc #: 2019.198569 Buyer Name: Aram And Yervard Property
Management LLC Seller Name:

Aram And Yervard
Property Management
LLC
Deed Type:

Sale / Rec Date: 10/02/2018 / 03/15/2019 Sale Price / Type: $1,400,000 / Deed Type: Grant Deed Multi / Split Sale: Y Price / Sq. Ft.: $119 New Construction:
1st Mtg Amt / Type: $700,000 / 1st Mtg Rate / Type: / Variable 1st Mtg Doc #: 2019.81793 2nd Mtg Amt / Type: 2nd Mtg Rate / Type: Sale Doc #: 2019.20190081792 Seller Name: Rancho Pacific Development Corporation
Lender: JPMorgan Chase Bank NA Title Company: Stewart Title Comp...

Sale / Rec Date: 01/09/1996 / 01/16/1996 Sale Price / Type: $255,000 / Full Value Prior Deed Type:
1st Mtg Amt / Type: $191,250 / Conventional 1st Mtg Rate / Type: / Fix Prior Sale Doc #: 1996.13411 Prior Lender: California Federal S&L
Gross Living Area: 11,775 Sq. Ft. Total Rooms: 0 Year Built / Eff: 1980 / 1980 Living Area: 11,775 Sq. Ft. Bedrooms: Stories:

Total Adj. Area: Baths (F / H): Parking Type:

Above Grade: Pool: Garage #:

Basement Area: Fireplace: Garage Area:

Style: Cooling: Porch Type:

Foundation: Heating: Patio Type:

Quality: Average Exterior Wall: Roof Type:

Condition: Construction Type: Wood Roof Material:

Land Use: Office Building Lot Area: 20,000 Sq. Ft. Zoning:

State Use: Lot Width / Depth: # of Buildings: 1
County Use: 0210 - General Office Usable Lot: Res / Comm Units: 1 / 1 Site Influence: Acres: 0.459 Water / Sewer Type: Public / Public Flood Zone Code: X Flood Map #: 06071C8676J Flood Map Date: 09/02/2016 Community Name: City Of Rialto Flood Panel #: 8676J Inside SFHA: False Assessed Year: 2023 Assessed Value: $1,372,418 Market Total Value:

Tax Year: 2023 Land Value: $321,660 Market Land Value:

Tax Area: 006-088 Improvement Value: $1,050,758 Market Imprv Value:

Property Tax: $18,165.45 Improved %: 76.56% Market Imprv %:

Exemption: Delinquent Year: 2021
© 2024 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF PAGE 1 OF 1 Riverside, Rialto, CA 92376
APN: 0130-033-31-0000

San Bernardino County Data as of: 06/20/2024

Owner Information
Location Information
Last Transfer / Conveyance - Current Owner
Last Market Sale
Prior Sale Information
Property Characteristics
Site Information
Tax Information
Property Detail Report
Owner Name: Aram & Yervand Property Management L
Vesting:

Mailing Address: 308 N Riverside Ave, Rialto, CA 92376-5965 Occupancy: Absentee Owner Legal Description: Buxton And Lane Sub S 40 Ft Lot 7 Ex Mnl Rts Reservation Of Record County: San Bernardino, CA APN: 0130-033-31-0000 Alternate APN: 0130-033-31-0000 Census Tract / Block: 003700 / 1006 Munic / Twnshp: Fontana Twnshp-Rng-Sec: Legal Lot / Block: 7 / Subdivision: Buxton & Land Division Tract #: Legal Book / Page: 0130 / 033 Neighborhood: Downtown Rialto School District: Rialto Unified School District Elementary School: Charlotte N. Werne... Middle School: Rialto Middle Scho... High School: Eisenhower Senior...

Latitude: 34.1049 Longitude: -117.37095
Transfer / Rec Date: 06/06/2019 / 06/18/2019 Price: Transfer Doc #: 2019.198569 Buyer Name: Aram And Yervard Property
Management LLC Seller Name:

Aram And Yervard
Property Management
LLC
Deed Type: Grant Deed
Sale / Rec Date: 10/02/2018 / 03/15/2019 Sale Price / Type: $1,400,000 / Deed Type: Grant Deed Multi / Split Sale: Y Price / Sq. Ft.: New Construction:
1st Mtg Amt / Type: $700,000 / 1st Mtg Rate / Type: / Variable 1st Mtg Doc #: 2019.81793 2nd Mtg Amt / Type: 2nd Mtg Rate / Type: Sale Doc #: 2019.81792 Seller Name: Rancho Pacific Development Corporation
Lender: JPMorgan Chase Bank NA Title Company: Stewart Title Comp...

Sale / Rec Date: 01/09/1996 / 01/16/1996 Sale Price / Type: $255,000 / Full Value Prior Deed Type:
1st Mtg Amt / Type: $191,250 / Conventional 1st Mtg Rate / Type: / Fix Prior Sale Doc #: 1996.13411 Prior Lender: California Federal S&L
Gross Living Area: Total Rooms: 0 Year Built / Eff:

Living Area: Bedrooms: Stories:

Total Adj. Area: Baths (F / H): Parking Type:

Above Grade: Pool: Garage #:

Basement Area: Fireplace: Garage Area:

Style: Cooling: Porch Type:

Foundation: Heating: Patio Type:

Quality: Exterior Wall: Roof Type:

Condition: Construction Type: Roof Material:

Land Use: Vacant Land (NEC) Lot Area: 8,000 Sq. Ft. Zoning:

State Use: Lot Width / Depth: # of Buildings:

County Use: 0000 - Vacant Land Usable Lot: Res / Comm Units:

Site Influence: Type Unknown Acres: 0.184 Water / Sewer Type: Public / Public Flood Zone Code: X Flood Map #: 06071C8676J Flood Map Date: 09/02/2016 Community Name: City Of Rialto Flood Panel #: 8676J Inside SFHA: False Assessed Year: 2023 Assessed Value: $128,664 Market Total Value:

Tax Year: 2023 Land Value: $128,664 Market Land Value:

Tax Area: 006-088 Improvement Value: Market Imprv Value:

Property Tax: $1,705.07 Improved %: Market Imprv %:

Exemption: Delinquent Year: 2020
© 2024 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF PAGE 1 OF 1