Agenda — Roseville City Council, June 15, 2022 (part 3 of 5)

The appraisal is intended to conform with the Uniform Standards of Professional Appraisal Practice (USPAP), the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute and applicable state appraisal regulations.

To report the assignment results, we use the Appraisal Report option of Standards Rule 2‐ 2(a) of USPAP. As USPAP gives appraisers the flexibility to vary the level of information in an Appraisal Report depending on the intended use and intended users of the appraisal, we adhere to the Integra Realty Resources internal standards for an Appraisal Report – Standard Format. This format summarizes the information analyzed, the appraisal methods employed, and the reasoning that supports the analyses, opinions, and conclusions.

Based on the valuation analysis in the accompanying report, and subject to the definitions, assumptions, and limiting conditions expressed in the report, our opinion of value is as follows:

Value Conclusion
Appraisal Premise Interest Appraised Date of Value Value Conclusion Market Value Fee Simple April 20, 2020 $145,000
Extraordinary Assumptions and Hypothetical Conditions

1. As discussed in the report, the subject is an improved site (currently part of a larger parcel ) with access via the existing parking area of Maidu Park. The City plans to use this point of access for their intended well site use. It is an extraordinary assumption of this report that i f developed to its highest and best “economic” use (residential lot), access would be provided via an access point from the Maidu Park parking lot.

2. The subject is a lot located adjacent to a subdivision. It is assumed utility extentions (wet and dry) for the subject property are in average condition. If, at some future date, inordinate utility extension/connection costs are necessary, this will have a detrimental impact on value. In that instance, the appraiser reserves the right to amend the opinion of value stated herein.

1. This report considers the value of the subject property based on its highest and best economic use, which is single family residential development. Consistent with the highest and best economic use, had the subject property not been previously designated for use as a park, the subject would likely have been zoned for single family residential use, as of the date of value. Therefore, the value estimated herein is subject to a hypothetical condition. It is a hypothetical condition of this report that the subject has been zoned for single family residential use, consistent with the zoning adjacent to the subject.

2. The appraised property is currently a portion of a larger parcel and is not itself a legally transferable parcel.

Thus, for purposes of this valuation, our estimate of value is premised on a hypothetical condition that the identified land area of the subject is in fact a legally transferable parcel as of the date of value.

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

The value conclusions are based on the following hypothetical conditions. A hypothetical condition is a condition, directly related to a speci fic assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis.

The value conclusions are subject to the following extraordinary assumptions. An extraordinary assumption is an assignment‐specific assumption as of the effective date regarding uncertain information used in an analysis which, i f found to be false, could alter the appraiser’s opinions or conclusions.

IMPORTANT MARKET CONDITIONS WARNING: Market Uncertainty from Novel Coronavirus (COVID‐19)
Trevor Joseph
City of Roseville
April 29, 2020

Page 3 ends

The outbreak of the Novel Coronavirus (COVID‐19), declared an outbreak by the World Health Organization (WHO) on January 30, 2020 and subsequently reclassified as a worldwide pandemic on March 11, 2020, has created substantial uncertainty in the worldwide financial markets. Concerns about the ongoing spread of the COVID‐19 (Corona) Virus have resulted in cancellations of a substantial number of business meetings, conferences, and sporting and entertainment events in the coming 3‐6 months; the implementation of personal quarantine procedures; a 30‐day lock‐out for travel from most of Europe to the U.S.; and substantial reductions (and restrictions) in other travel by air, rail, bus, and ship.

As of the effective date of this report, tourism, lodging, and tourist‐related food and beverage and retail sectors are experiencing negative effects due to the substantial decline in social movement and activity. A prolonged outbreak could have a significant impact on other real estate sectors, especially considering the surge in unemployment in recent weeks.

Given the degree of overall uncertainty present in the economy, forecasts and projections contained herein may change dramatically, or differently than projected under stable market conditions. Our valuation is based upon the best information as of the effective date. Please refer to the COVID‐19 Impact on Current Valuation section of the attached report.

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

Respectfully submitted,
INTEGRA REALTY RESOURCES ‐ SACRAMENTO
Blake Fassler
Certified General Real Estate Appraiser
California Certificate # 3007274
Telephone: 916‐505‐4471
Email: [email protected]
Kevin Ziegenmeyer, MAI
Certified General Real Estate Appraiser
California Certificate # AG013567
Telephone: 916‐435‐3883, ext. 224
Email: [email protected]
Table of Contents
1550 Maidu Drive
Summary of Salient Facts and Conclusions 1
General Information 3
Identification of Subject 3
Sale History 3
Pending Transactions 3
Purpose of the Appraisal 3
Definition of Market Value 3
Definition of Property Rights Appraised 4
Intended Use and User 4
Applicable Requirements 4
Report Format 4
Prior Services 5
Scope of Work 5
Economic Analysis 7
Area Analysis – Placer County 7
Surrounding Area Analysis 12
Residential Market Analysis 16
COVID‐19 Impact on Current Valuations 21
Property Analysis 28
Land Description and Analysis 28
Real Estate Taxes 34
Highest and Best Use 35
Valuation 37
Valuation Methodology 37
Sales Comparison Approach 38
Analysis and Adjustment of Sales 42
Land Value Conclusion 45
Reconciliation and Conclusion of Value 46
Exposure Time 47
Marketing Period 47
Certification 48
Assumptions and Limiting Conditions 50
Addenda
A. Appraiser Qualifications
B. Comparable Data
C. Engagement Letter
Summary of Salient Facts and Conclusions 1
1550 Maidu Drive
Summary of Salient Facts and Conclusions
Address
Property Type
Owner of Record
Tax ID
Land Area 0.51 acres; 22,216 SF
Zoning Designation
Highest and Best Use
Exposure Time; Marketing Period 9‐12 months; 12 months
Effective Date of the Appraisal April 20, 2020
Date of the Report April 29, 2020
Property Interest Appraised
Sales Comparison Approach
Number of Sales 4
Range of Sale Dates Oct 18 to Jan 20
Range of Prices per Property (Unadjusted) $83,000 ‐ $280,000 Market Value Conclusion $145,000
The values reported above are subject to the definitions, assumptions, and limiting conditions set forth in the accompanying report of which this summary is a part. No party other than City of Roseville may use or rely on the information, opinions, and conclusions contained in the report. It is assumed that the users of the report have read the entire report, including all of the definitions, assumptions, and limiting conditions contained therein.

PR, Park and Recreation
Residential use
Fee Simple
City of Roseville
469‐020‐004 (portion of)
1550 Maidu Dr.

Roseville, Placer County, California 95661
Land ‐ Residential
Summary of Salient Facts and Conclusions 2
1550 Maidu Drive
Extraordinary Assumptions and Hypothetical Conditions

1. This report considers the value of the subject property based on its highest and best economic use, which is single family residential development. Consistent with the highest and best economic use, had the subject property not been previously designated for use as a park, the subject would likely have been zoned for single family residential use, as of the date of value. Therefore, the value estimated herein is subject to a hypothetical condi tion. It is a hypothetical condition of this report that the subject has been zoned for single family residential use, consistent with the zoning adjacent to the subject.

2. The appraised property is currently a portion of a larger parcel and is not itsel f a legally transferable parcel.

Thus, for purposes of this valuation, our estimate of value is premised on a hypothetical condition that the identi fied land area of the subject is in fact a legally transferable parcel as of the date of value.

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

The value conclusions are subject to the following extraordinary assumptions. An extraordinary assumption is an assignment‐speci fic assumption as of the effective date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser’s opinions or conclusions.

IMPORTANT MARKET CONDITIONS WARNING: Market Uncertainty from Novel Coronavirus (COVID‐ 19)
The outbreak of the Novel Coronavirus (COVID‐19), declared an outbreak by the World Health Organization (WHO) on January 30, 2020 and subsequently reclassified as a worldwide pandemic on March 11, 2020, has created substantial uncertainty in the worldwide financial markets. Concerns about the ongoing spread of the COVID‐19 (Corona) Virus have resulted in cancellations of a substantial number of business meetings, conferences, and sporting and entertainment events in the coming 3‐6 months; the implementation of personal quarantine procedures; a 30‐day lock‐out for travel from most of Europe to the U.S.; and substantial reductions (and restrictions) in other travel by air, rail, bus, and ship.

General Information 3
1550 Maidu Drive
General Information
Identification of Subject
The subject is a portion of a parcel of vacant land and contains 0.51 acres or 22,216 square feet of land area. The property is zoned PR, Park and Recreation, and is currently used as a park. Although the subject of this appraisal is land designated for a public use, this report considers the value of the subject property based on its highest economic use, which is single family residential development.

The valuation is premised upon the hypothetical condition that the subject is zoned R‐1, similar to adjacent development. As of the date of value, the property is generally level, and all offsite improvements are in place. It is noted that the subject is currently improved with a batting cage facility and the costs to demolish the facility would be minimal. Therefore, it is presumed that the demolition costs for the batting cage and ancillary improvements would be only nominally above the overall costs to prepare the lot for vertical improvements. A legal description of the property was requested but not provided.

Property Identification
Address 1550 Maidu Dr.

Roseville, California 95661
Tax ID 469‐020‐004 (portion of)
Owner of Record City of Roseville
Sale History
To the best of our knowledge, no other sale or transfer of ownership has occurred within the past three years.

Pending Transactions
To the best of our knowledge, the property is not subject to an agreement of sale or an option to buy, nor is it listed for sale, as of the effective appraisal date.

Purpose of the Appraisal
The purpose of the appraisal is to develop an opinion of the market value of the fee simple interest in the property as of the effective date of the appraisal, April 20, 2020. As will be discussed below, the appraised property is a portion of a larger parcel and is not itself a legally transferable parcel. Thus, for purposes of this valuation our estimate of value is premised on a hypothetical condition that the identified land area of the subject is in fact a legally transferable parcel as of the date of value. The date of the report is April 29, 2020. The appraisal is valid only as of the stated effective date or dates.

Definition of Market Value
Market value is defined as:

General Information 4
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“The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
 Buyer and seller are typically motivated;
 Both parties are well informed or well advised, and acting in what they consider their own best interests;
 A reasonable time is allowed for exposure in the open market;  Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and
 The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.” (Source: Code of Federal Regulations, Title 12, Chapter I, Part 34.42[h]; also Interagency Appraisal and Evaluation Guidelines, Federal Register, 75 FR 77449, December 10, 2010, page 77472) Definition of Property Rights Appraised
Fee simple estate is defined as, “Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.”
Source: Appraisal Institute, The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: Appraisal Institute, 2015)
Intended Use and User
The intended use of the appraisal is for asset monitoring and transfer between City Departments. The client and intended user is City of Roseville. The appraisal is not intended for any other use or user. No party or parties other than City of Roseville may use or rely on the information, opinions, and conclusions contained in this report.

Applicable Requirements
This appraisal is intended to conform to the requirements of the following:
 Uniform Standards of Professional Appraisal Practice (USPAP);  Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute;
 Applicable state appraisal regulations.

Report Format
This report is prepared under the Appraisal Report option of Standards Rule 2‐2(a) of USPAP. As USPAP gives appraisers the flexibility to vary the level of information in an Appraisal Report depending General Information 5
1550 Maidu Drive
on the intended use and intended users of the appraisal, we adhere to the Integra Realty Resources internal standards for an Appraisal Report – Standard Format. This format summarizes the information analyzed, the appraisal methods employed, and the reasoning that supports the analyses, opinions, and conclusions.

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

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

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

Approaches to Value
Approach Applicability to Subject Use in Assignment
Cost Approach Not Applicable Not Utilized
Sales Comparison Approach Applicable Utilized
Income Capitalization Approach Not Applicable Not Utilized We use only the sales comparison approach in developing an opinion of value for the subject. This approach is applicable to the subject because there is an active market for similar properties; however, there is a scarcity of sales data that is considered similar to the subject property due to the subject’s characteristics. As will be discussed further later in this report, the subject is configured in such a way that the most likely point of access would be via the existing parking lot area of Maidu Park. There are existing houses along Rocky Ridge. The subject’s site characteristics will be considered in our valuation.

The cost approach is not applicable because there are no improvements that contribute value to the property, and the income approach is not applicable because the subject is not likely to generate rental income in its current state.

Research and Analysis
The type and extent of our research and analysis is detailed in individual sections of the report. This includes the steps we took to verify comparable sales, which are disclosed in the comparable sale General Information 6
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profile sheets in the addenda to the report. Although we make an effort to confirm the arms‐length nature of each sale with a party to the transaction, it is sometimes necessary to rely on secondary verification from sources deemed reliable.

Inspection
Blake Fassler conducted an on‐site inspection of the property on April 20, 2020. Kevin Ziegenmeyer, MAI, conducted an on‐site inspection on April 20, 2020.

Area Analysis – Placer County 7
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Economic Analysis
Area Analysis – Placer County
Introduction
Placer County is part of the four‐county Sacramento Metropolitan Area, along with the counties of Sacramento, Yolo and El Dorado. The county is located in the north‐central part of California, approximately 420 miles north of Los Angeles, 250 miles south of Oregon, 100 miles northeast of San Francisco, 80 miles west of Lake Tahoe and 100 miles southwest of Reno. The southernmost part of Placer County consists of a valley commonly referred to as South Placer, while the remainder of the county is divided into the Gold Country, where parts of Auburn and Colfax are located, and the High Country, which encompasses Tahoe City and Kings Beach along Lake Tahoe. Placer’s largest cities are Roseville, Rocklin and Lincoln. Elevations in the county range from 165 feet above sea level in Roseville to 10,000 feet above sea level in the Sierra Nevada Mountains.

Placer County is developed with a mix of urban and rural uses. The larger cities, namely Roseville and Rocklin, are mostly urban, while the smaller communities, such as Loomis and Newcastle, have remained rural. Auburn and Lincoln both exhibit a combination of urban and rural settings. However, in recent years the city of Lincoln has experienced dramatic growth and development and has become one of the fastest‐growing cities in California.

Population
Placer County has experienced population growth in recent years, primarily in the southern part of the county. The main origin for in‐migration to the region are the Bay Area, other parts of the Sacramento region and Southern California. The state’s population data indicate a strong pattern of movement by residents from the high‐cost, high‐density Bay Area to inland areas in Northern California.

Following is a table depicting the population change in Placer County and its component cities over the past few years.

As indicated in the previous table, Placer County has experienced a strong average rate of annual growth of 1.6% over the past five years. The cities of Rocklin, Roseville and Lincoln are the fastest Population Trends
City 2014 2015 2016 2017 2018 2019 %/Yr
Auburn 13,948 13,979 14,110 14,262 14,291 14,392 0.6% Colfax 2,027 2,026 2,048 2,068 2,071 2,073 0.5% Lincoln 45,586 46,159 46,974 47,433 47,808 48,277 1.2% Loomis 6,628 6,648 6,686 6,803 6,848 6,887 0.8% Rocklin 59,891 60,502 61,595 64,397 66,711 69,249 3.1% Roseville 127,873 129,120 132,000 134,110 136,260 139,643 1.8% Unincorporated 112,188 112,892 113,030 114,646 115,491 116,170 0.7% Total 368,141 371,326 376,443 383,719 389,480 396,691 1.6% Source: California Department of Finance
Area Analysis – Placer County 8
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growing in the region. Loomis and the unincorporated areas have had relatively little growth. Over the past decade, Placer County has been the fastest‐growing county within the four‐county Sacramento MSA (which also includes Sacramento, El Dorado and Yolo Counties). It is projected this trend will continue for the near future.

Employment & Economy
The California Employment Development Department has reported the following employment data for Placer County over the past several years.

The average annual unemployment rate in Placer County was 3.1% during 2019. The unemployment rate was 2.7% in Placer County as of December 2019. This compares to the average rates of 3.7% for California and 3.4% for the nation. Most areas within the state and nation, including Placer County, saw declining unemployment rates in 2004 through 2006, increases from 2007 to 2010, and declines during 2011‐2019.

Placer County has a diverse economy, with no one sector accounting for a majority of the employment in the region. The following chart indicates the percentage of total employment for each sector within the county.

Employment Trends
2014 2015 2016 2017 2018 2019
Labor Force 175,500 176,500 179,800 181,700 185,200 186,700 Employment 164,500 167,600 171,700 174,700 179,400 180,900 Job Growth 2,200 3,100 4,100 3,000 4,700 1,500
Unemployment Rate 6.3% 5.0% 4.5% 3.9% 3.1% 3.1%
Source: Cali fornia Empl oyment Development Depa rtment Area Analysis – Placer County 9
1550 Maidu Drive
The area’s largest employment sectors are Trade/Transportation/Utilities, which includes retail and wholesale trade (18.8% of total employment); Educational and Health Services (16.9%); and Leisure and Hospitality (14.0%).

Although many residents commute to employment centers in Sacramento, Placer County offers thousands of jobs and attracts workers from the local area as well as “reverse commuters” from Sacramento and residents of outlying areas such as Marysville/Yuba City to the north. The largest employers in the county, according to the Sacramento Business Journal, are highlighted as follows:

Household Income
Median household income represents a broad statistical measure of well‐being or standard of living in a community. The median income level divides households into two equal segments with one half of households earning less than the median and the other half earning more. The median income is considered to be a better indicator than the average household income as it is not dramatically affected by unusually high or low values. The U.S. Census Bureau estimates a median household income of $84,357 for Placer County in the year 2018 (most recent data available), which was higher than the state of California’s median income of $71,228.

Transportation
Interstate 80, State Highway 65 and State Highway 193 are the major routes traversing the region.

Major urban arterials in the southern part of the county include Douglas Boulevard, Sierra College Boulevard, Roseville Parkway, Pleasant Grove Boulevard, Sunrise Avenue, Auburn‐Folsom Road and Foothills Boulevard.

In addition to roadways within the county limits, south Placer County enjoys proximity to many of the Sacramento region’s freeways that provide access to the San Francisco Bay Area to the west, Central and Southern California to the south, Northern California and Oregon to the north, and Nevada to the east. Sacramento International Airport is situated about 10 miles west of the county border. The county is also home to a couple of small private airports. The region has good railroad service, including the transcontinental Union Pacific Railroad and Amtrak. The Capitol Corridor system Largest Employers
Employer Industry Employees
1 Kaiser Permanente Healthcare 6,015
2 Sutter Health Healthcare 5,835
3 Squaw Valley Alpine Meadows Leisure/Hospitality 2,600 4 Thunder Valley Casino Resort Leisure/Hospitality 2,500 5 Sierra Joint Community College District Education 2,149 6 PRIDE Industries Professional/Business Services 1,291 7 Hewlett Packard Enterprise Co. Electronics/Technology Manufacturing 1,200 8 City of Roseville Government 1,162
9 Safeway Grocery Store 1,119
10 Union Pacific Railroad Co. Inc. Railroad 990
Source: Sacramento Business Journal, The List: Employers ‐ Placer County, December 2019 Area Analysis – Placer County 10
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provides high‐speed commuter rail service from Roseville to San Jose and Placer County Transit provides seven fixed routes servicing areas from Colfax down to Watt Avenue in Sacramento.

Recreation & Community Services
Placer County has ample community services and recreational opportunities. The County, cities and various park districts operate numerous public parks, golf courses, aquatic centers, libraries and community centers. Many private golf courses are located in the region, and several ski resorts are located in the mountains. Within the county lies a portion of the Folsom Lake State Recreation Area, a boating, fishing, and swimming retreat.

In terms of higher education, Placer County is home to Sierra College in Rocklin, a two‐year community college offering a wide range of day and evening classes serving over 25,000 students.

Sierra College also has an extension campus located in the Vernon District in Roseville and two additional campuses – the Nevada County and Tahoe‐Truckee campuses. In 2004, William Jessup University, a private Christian college, moved from San Jose to a new facility in Rocklin. Additional university campuses within the county include Brandman University, National University and University of Phoenix, all located in Roseville.

The region offers good health services, including hospitals and medical office facilities. Two hospitals are located in Roseville – the Sutter Roseville Medical Center and Kaiser Permanente. In addition to the hospital, construction has completed for a new state‐of‐the‐art, 210,000 square foot Kaiser Permanente medical campus to replace their existing campus on Riverside Avenue. The city of Auburn is home to Sutter Auburn Faith Hospital, Sutter Medical Center‐Auburn, UC Davis Medical Center, Foundation Medical Clinic and Heritage Medical Center Complex. The city of Lincoln contains medical offices/clinics operated by Sutter, UC Davis, Kaiser and Catholic Healthcare West. In addition to these institutional health care facilities, the county is home to a large and growing number of private physicians, dentists, clinics and other medical specialists.

The city of Roseville is south Placer’s hub for fine dining and entertainment. Several upscale restaurants are situated along Eureka Road, Roseville Parkway and Galleria Boulevard. Roseville and Rocklin both offer two multi‐screen movie theatres, and Auburn has one theatre. Shopping centers are widespread, the largest of which are the Galleria at Roseville, a regional shopping mall that opened in 2000 and was expanded in 2008‐2009, and the Fountains at Roseville, an outdoor lifestyle center that opened in June 2008.

Conclusion
Placer County encompasses a diverse area, with growing cities, small towns and rural areas, and an abundance of open space. The cities of Roseville, Rocklin and Lincoln have experienced strong growth in population and development over the past several years. Placer County is one of the most affluent in the greater Sacramento region in terms of household income levels. The area has a number of positive attributes, including seismic stability, a well‐educated work force, good transportation systems, relative affordability and availability of housing compared to the Bay Area, and an excellent level of community services. The long‐term outlook for the region is very good.

Area Analysis – Placer County 11
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Area Map
Surrounding Area Analysis 12
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Surrounding Area Analysis
Location
The boundaries of a neighborhood identify the physical area that influences the value of the subject property. These boundaries may coincide with observable changes in prevailing land use or occupant characteristics. Physical features such as the type of development, street patterns, terrain, vegetation and parcel size tend to identify neighborhoods. Roadways, waterways, and changing elevations can also create neighborhood boundaries.

The subject property is located in the southwest portion of Placer County, within the city of Roseville.

The neighborhood boundaries can generally be described as Interstate 80 to the north and west, Sierra College Boulevard to the east, and Cirby Way and Old Auburn Road to the south.

Access and Linkages
There are several major thoroughfares in the subject’s neighborhood, making it a central location with convenient access to neighboring communities. The primary north‐south traffic corridors are Eureka Road, East Roseville Parkway, Sierra College Boulevard and Sunrise Avenue. The primary east‐west connector in the neighborhood is Douglas Boulevard. Douglas Boulevard connects with Interstate 80 and historic sections of Roseville to the west, and Folsom Lake to the east. Sierra College Boulevard is located east of the subject property, which links with Rocklin to the north and Orangevale to the south. The road systems provide adequate access to all areas within east Roseville, as well as other nearby neighborhoods and freeway destinations.

To the west, Interstate 80 travels through Sacramento, Davis and the San Francisco Bay Area. To the east, Interstate 80 intersects State Highway 65, which provides access to employment and retail centers within the northern portions of Roseville and Rocklin. East of State Highway 65, the freeway travels through the Sierra Nevada foothills, the general Lake Tahoe region and Reno.

Public transportation is provided by Roseville Transit and provides access to 12 regular local routes within the City of Roseville. The local market perceives public transportation as average compared to other areas in the region. However, the primary mode of transportation in this area is the automobile.

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

Surrounding Area Analysis 13
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Surrounding Area Demographics
2020 Estimates 1‐Mile Radius 3‐Mile Radius 5‐Mile Radius 95661 (Roseville,
CA) Placer County, CA
Population 2010 13,722 94,297 260,678 29,826 348,432
Population 2020 13,942 98,872 280,141 32,139 398,650
Population 2025 14,222 101,791 290,805 33,422 419,234
Compound % Change 2010‐2020 0.2% 0.5% 0.7% 0.7% 1.4%
Compound % Change 2020‐2025 0.4% 0.6% 0.7% 0.8% 1.0%
Households 2010 5,538 35,900 99,139 11,719 132,627
Households 2020 5,849 38,462 107,103 12,918 153,060
Households 2025 6,038 39,859 111,348 13,527 161,485
Compound % Change 2010‐2020 0.5% 0.7% 0.8% 1.0% 1.4%
Compound % Change 2020‐2025 0.6% 0.7% 0.8% 0.9% 1.1%
Median Household Income 2020 $80,354 $78,079 $78,846 $84,342 $88,748 Average Household Size 2.4 2.6 2.6 2.5 2.6
College Graduate % 34% 32% 32% 39% 38%
Medi an Age 45 41 40 43 43
Owner Occupied % 65% 63% 64% 60% 71%
Renter Occupied % 35% 37% 36% 40% 29%
Median Owner Occupied Housing Value $465,609 $459,682 $448,361 $547,093 $557,525 Median Year Structure Built 1981 1981 1983 1986 1994
Average Travel Time to Work in Minutes 29 28 28 27 30
Source: Environics Analytics
As shown above, the current population within a 3‐mile radius of the subject is 98,872, and the average household size is 2.6. Population in the area has grown since the 2010 census, and this trend is projected to continue over the next five years. Compared to Placer County overall, the population within a 3‐mile radius is projected to grow at a slower rate.

Median household income is $78,079, which is lower than the household income for Placer County.

Residents within a 3‐mile radius have a lower level of educational attainment than those of Placer County, while median owner occupied home values are considerably lower.

Land Use
The subject neighborhood includes a mix of single‐family, multi‐family, commercial and office development. The subject is immediately surrounded by public uses and single family residential development.

The majority of the Roseville/Rocklin office market is situated along Douglas Boulevard. Generally, office development along this corridor consists of multi‐tenant office buildings and office complexes.

Additionally, the area’s most notable tenants and Class A buildings are typically located along Douglas Boulevard. Eureka Road, located northeast of the subject off of Douglas Boulevard, features more diverse development consisting of office, retail and residential properties. Near Interstate 80, Eureka Road is developed primarily with retail development. As the road heads southeast toward Douglas Boulevard, development transitions primarily into multi‐tenant office buildings with some supporting retail properties.

Surrounding Area Analysis 14
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Northwest of the subject along North Sunrise Avenue is a strong retail presence. This area is home to the Roseville Auto Mall, Centerpointe Marketplace, as well as several shopping centers and big‐box stores including The Home Depot and Fry’s Electronics. North of Interstate 80 is the Galleria at Roseville regional mall. Additionally, large‐scale retail projects have been developed adjacent to the Galleria, including the Creekside Town Center, Tuscany Village, The Fountains and The Ridge shopping centers. Traveling east along Douglas Boulevard (between Interstate 80 and Sierra College Boulevard) is additional retail development with multiple anchored centers.

There are several community uses in the neighborhood, such as schools, religious facilities, medical facilities, parks, and recreational and cultural facilities. There are multiple parks within the subject’s neighborhood, including Maidu Regional Park, Eastwood Park, Sierra Gardens Park and Olympus Park.

Maidu Regional Park is the largest of these and represents the area’s primary recreational facility, housing several softball fields, batting cages, a community center, a skateboard park and a basketball court. Traveling along Douglas Boulevard, the Folsom Lake Recreational Center is approximately seven miles east of the subject. Oakmont High School, Granite Bay High School and Roseville High School are the area’s primary secondary schools. Sierra Community College (main campus) is located to the north of the subject in Rocklin, and also services the area. There is a satellite campus for Sierra Community College at the northeast corner of Sunrise Avenue and Frances Drive.

Outlook and Conclusions
The subject property is located in an area of mature commercial and residential development. The neighborhood’s proximity to Interstate 80 and other major thoroughfares are considered a positive attribute. The area is considered to be a middle income neighborhood with adequate support facilities. The condition and quality of the neighborhood is rated as average to good. Overall, the neighborhood balance of uses and current activity indicate long‐term growth and potential appreciation, though the COVID‐19 pandemic may adversely affect property values in the near‐term.

Surrounding Area Analysis 15
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Surrounding Area Map

Residential Market Analysis 16
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Residential Market Analysis
Given prevailing land use patterns and the subject’s zoning, a likely use of the property is for residential development. In the following paragraphs, we examine supply and demand indicators for residential development in the subject’s area.

Submarket Overview
The subject is located in the City of Roseville. The subject is adjacent to older home construction and is considered to have good transportation linkages. The neighborhood is characterized as a suburban area that appeals to both local workers and commuters. Based on existing surrounding homes and new projects under development, the subject characteristics best support a project designed for a combination of entry‐level and/or first‐time move‐up home buyers.

Single‐Family Building Permits
Single‐family building permits for the city of Roseville as well as Placer County totals are shown in the following table.

New Home Pricing and Sales
The Gregory Group surveys active new home projects in California and Nevada. On the following page we present a table containing indicators for active single‐family residential projects the subject’s County for the past three years. The data include both attached and detached projects, but the vast majority of units are detached homes.

Building Permits
Year City of Roseville Placer County
2007 1,050 2,188
2008 676 1,393
2009 602 1,130
2010 635 1,087
2011 411 812
2012 663 1,189
2013 535 1,268
2014 645 1,636
2015 967 1,996
2016 862 2,107
2017 1,191 2,500
2018 808 1,884
2019 998 2,035
2020 (Feb.) 156 319
Source: SOCDS Building Permits Database
Residential Market Analysis 17
1550 Maidu Drive
In terms of the number of home sales in Placer County, over the last 12 months, the average was 2.54 sales per month per project, which was slightly down from the average for the prior 12‐month period of 2.57 sales per month per project.

Active New Home Projects Pricing and Absorption
There are 27 active projects in the market areas of Roseville with average lot sizes 10,000 square feet or below. These projects are summarized in the tables below and on the following page, based on data from the First Quarter of 2020.

New Home Sales History
Time
Period Average price
% Change
Average Price
Average Home
Size (SF)
Average
Price/Avg
SF
% Change
Price/SF
Quarter
Sold
Number of
Projects
Sold Per Proj.

Per Month
1Q 2016 $490,226 ‐ 2,675 $183.26 ‐ 428 49 2.91
2Q 2016 $500,866 2.2% 2,700 $185.51 1.2% 462 53 2.91
3Q 2016 $512,573 2.3% 2,735 $187.41 1.0% 352 53 2.21
4Q 2016 $519,126 1.3% 2,737 $189.67 1.2% 401 55 2.43
1Q 2017 $520,325 0.2% 2,698 $192.86 1.7% 493 59 2.79
2Q 2017 $526,062 1.1% 2,688 $195.71 1.5% 700 61 3.83
3Q 2017 $513,858 ‐2.3% 2,610 $196.88 0.6% 341 55 2.07
4Q 2017 $519,636 1.1% 2,606 $199.40 1.3% 332 56 1.98
1Q 2018 $517,797 ‐0.4% 2,538 $204.02 2.3% 520 60 2.89
2Q 2018 $533,097 3.0% 2,566 $207.75 1.8% 535 57 3.13
3Q 2018 $546,323 2.5% 2,568 $212.74 2.4% 373 50 2.49
4Q 2018 $552,195 1.1% 2,570 $214.86 1.0% 248 47 1.76
1Q 2019 $558,717 1.2% 2,587 $215.97 0.5% 399 47 2.83
2Q 2019 $562,415 2.9% 2,559 $219.78 3.3% 433 55 2.62
3Q 2019 $561,823 1.7% 2,533 $221.80 3.2% 388 54 2.40
4Q 2019 $551,303 ‐1.3% 2,477 $222.57 3.1% 372 54 2.30
Residential Market Analysis 18
1550 Maidu Drive
Active Projects
Project Master Plan Community Developer
Average
Price
Avg.

Home
Average
Price/SF
Typical
Lot Size
Units
Planne
Units
Offered
Units
Sold
Units
Unsold
Blume Solaire Roseville Taylor Morrison Homes $483,657 2,314 $209 5,000 73 73 73 0 Cadence WestPark Roseville KB Home $472,500 2,119 $223 4,050 88 66 65 1 Catalina Fiddyment Farm Roseville Taylor Morrison Homes $487,990 2,314 $211 5,250 45 16 5 11 Corvara Fiddyment Farm Roseville Lennar Homes $534,990 2,469 $217 4,000 134 65 60 5 Eclipse Heritage Solaire Roseville Lennar Homes $584,657 2,627 $223 6,000 156 97 88 9 Farms at Riolo Mariposa No Roseville Homes by Towne $486,765 2,271 $214 7,000 107 51 34 17 Fieldstone Fiddyment Farm Roseville Richmond American Homes $477,700 2,172 $220 6,500 60 5 2 3 Larissa Heritage Solaire Roseville Lennar Homes $514,990 2,111 $244 5,000 91 91 82 9 Liberty Village No Roseville Taylor Morrison Homes $410,990 1,775 $232 2,200 53 45 32 13 Meridian Heritage Solaire Roseville Lennar Homes $435,240 1,546 $282 4,500 175 104 96 8 Monarch Fiddyment Farm Roseville Taylor Morrison Homes $520,323 2,468 $211 5,775 94 16 8 8 Monterosa Fiddyment Farm Roseville Lennar Homes $553,990 2,569 $216 5,500 68 68 64 4 Monument Village Sierra Vista Roseville JMC Homes $489,990 2,100 $233 4,500 92 68 68 0 Morgan Ranch No Roseville Homes by Towne $602,917 3,024 $199 10,000 61 36 28 8 Northwood ll Fiddyment Farm Roseville JMC Homes $445,990 1,455 $307 5,775 116 116 116 0 Palisade Village Sierra Vista Roseville JMC Homes $439,490 1,631 $269 3,600 88 42 41 1 Pinnacle Village Sierra Vista Roseville JMC Homes $612,990 2,657 $231 7,150 82 51 50 1 Ravenna No Roseville JMC Homes $503,323 1,961 $257 5,775 92 14 3 11 Summerwood Fiddyment Farm Roseville JMC Homes $497,490 1,826 $272 6,050 125 125 125 0 The Hills at Paradiso Solaire Roseville Woodside Homes $478,990 1,971 $243 4,500 58 39 35 4 The Ridge at Paradiso Solaire Roseville Woodside Homes $515,657 2,175 $237 5,500 42 28 23 5 The Summit WestPark Roseville Meritage Homes $547,450 2,648 $207 6,600 152 100 87 13 Treo Solaire Roseville Taylor Morrison Homes $533,740 2,695 $198 6,000 72 72 72 0 Valleybrook Fiddyment Farm Roseville JMC Homes $754,990 3,572 $211 8,500 70 62 58 4 Veranda Stone Ridge Roseville Elliott Homes $414,200 1,652 $251 3,000 149 120 120 0 Wildwood Fiddyment Farm Roseville JMC Homes $602,190 2,716 $222 6,600 169 115 108 7 Woodbridge Fiddyment Farm Roseville Signature Homes $590,687 2,648 $223 5,500 116 65 62 3 Minimum $410,990 1,455 $198.05 2,200
Maximum $754,990 3,572 $306.52 10,000
Average $518,292 2,277 $231.86 5,549
Residential Market Analysis 19
1550 Maidu Drive
Conclusions
We have summarized some of the key points from this section as follows:
 Building permit activity for single‐family residences in Roseville reached a peak about nine years ago, then fell precipitously during the recessionary period, but has been increasing in more recent years and has recently set a new high point in building permit activity in 2017.  New home pricing in Placer County has been in a general increasing pattern over the last four years, the average price and average price per square foot per home has steadily increased and reached its highest point in the most recent quarter.
 New home pricing per square foot of living area in Roseville has been generally increasing over the last three to four years.
 There are currently 27 active new home projects in Roseville with lot sizes of 10,000 square feet and under. This is among the highest levels of active projects observed since the past expansionary period.
 Absorption rates within new home projects in Roseville have ranged from 0.7 to 6.8 sales per month over the past year, with an average of 3.2 sales per month. Note a majority of the newer projects have a lower average per month because they have recently started selling homes.

Aborption
Project Builder
Avg. Home
Price
Avg.

Home Size
Lot Size
(SF)
4Q
2019
3Q
2019
2Q
2019
1Q
2019
12‐
Month
Avg. Per
Quarter
Avg. Per
Month
Blume Taylor Morrison Homes $483,657 2,314 5,000 9 0 14 6 29 7.3 2.4 Cadence KB Home $472,500 2,119 4,050 30 5 15 15 65 16.3 5.4 Catalina Taylor Morrison Homes $487,990 2,314 5,250 5 0 ‐ ‐ 5 2.5 0.8 Corvara Lennar Homes $534,990 2,469 4,000 16 10 14 4 44 11.0 3.7 Eclipse Heritage Lennar Homes $584,657 2,627 6,000 16 6 6 19 47 11.8 3.9 Farms at Riolo Mariposa Homes by Towne $486,765 2,271 7,000 2 4 4 4 14 3.5 1.2 Fieldstone Richmond American Homes $477,700 2,172 6,500 2 ‐ ‐ ‐ 2 2.0 0.7 Larissa Heritage Lennar Homes $514,990 2,111 5,000 9 5 14 11 39 9.8 3.3 Liberty Village Taylor Morrison Homes $410,990 1,775 2,200 25 7 0 ‐ 32 10.7 3.6 Meridian Heritage Lennar Homes $435,240 1,546 4,500 11 12 19 5 47 11.8 3.9 Monarch Taylor Morrison Homes $520,323 2,468 5,775 4 4 ‐ ‐ 8 4.0 1.3 Monterosa Lennar Homes $553,990 2,569 5,500 5 23 22 2 52 13.0 4.3 Monument Village JMC Homes $489,990 2,100 4,500 17 21 28 2 68 17.0 5.7 Morgan Ranch Homes by Towne $602,917 3,024 10,000 7 2 2 4 15 3.8 1.3 Northwood ll JMC Homes $445,990 1,455 5,775 8 6 10 25 49 12.3 4.1 Palisade Village JMC Homes $439,490 1,631 3,600 27 14 ‐ ‐ 41 20.5 6.8 Pinnacle Village JMC Homes $612,990 2,657 7,150 15 12 16 7 50 12.5 4.2 Ravenna JMC Homes $503,323 1,961 5,775 3 ‐ ‐ ‐ 3 3.0 1.0 Summerwood JMC Homes $497,490 1,826 6,050 11 13 10 3 37 9.3 3.1 The Hills at Paradiso Woodside Homes $478,990 1,971 4,500 14 6 8 6 34 8.5 2.8 The Ridge at Paradiso Woodside Homes $515,657 2,175 5,500 11 3 5 4 23 5.8 1.9 The Summit Meritage Homes $547,450 2,648 6,600 16 9 9 8 42 10.5 3.5 Treo Taylor Morrison Homes $533,740 2,695 6,000 2 6 1 13 22 5.5 1.8 Valleybrook JMC Homes $754,990 3,572 8,500 11 5 10 13 39 9.8 3.3 Veranda Elliott Homes $414,200 1,652 3,000 0 0 12 26 38 9.5 3.2 Wildwood JMC Homes $602,190 2,716 6,600 13 13 8 7 41 10.3 3.4 Woodbridge Signature Homes $590,687 2,648 5,500 5 2 9 8 24 6.0 2.0 Total 294 188 236 192
No. of Active Projects 27 25 22 21
Quarterly Pro‐Rata 10.9 7.5 10.7 9.1
Monthly Pro‐Rata 3.6 2.5 3.6 3.0

3.2 Average Monthly Pro‐Rata
Residential Market Analysis 20
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 Prior to the COVID‐19 pandemic, we heard of some markets across the nation cooling somewhat and concerns related to the potential of a recession in the next year or two. It appears the COVID‐ 19 pandemic has accelerated the timeline for recession, and it is believed to occur in the near term with many market participants uncertain about today’s market. Overall, demand for new homes in the subject’s market area remains stable, despite the concerns with COVID‐19.

COVID‐19 Impact on Current Valuations 21
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COVID‐19 Impact on Current Valuations
The best measure of any impact on values due to COVID‐19 would be in direct transaction indicators that are objectively verified and clearly show data points, current pricing discovery, and the ability to measure movement in values from a prior baseline; and to understand direction in overall values. This would include sales transactions, leasing activity, vacancy rates and/or cap rates that have visibly moved off of early Q1 levels (baseline), or form a conclusive basis for new pricing. However, given the unique nature and recency of this event, minimal activity is evident from which to draw benchmark comparisons based on transactional data.

In the absence of transaction data, there is empirical data in the market that can be gleaned and assist in estimating the valuation metrics and assessing their reliability in estimating current value. In this initial phase of the pandemic, early emerging trends include:
 Market confidence (fundamental economic fear)
 Expectations of impaired property/operating performance  Re‐pricing risk (debt and equity)
 Liquidity duration
 Impaired market and pricing activity
All or some of the above may be shorter‐term issues, but others may linger and have a lasting impact on valuations in the commercial real estate (CRE) sector along a continuum of time.

At this juncture, the global question facing market participants is: “How long does this crisis last and how deep will its impact become?” At a minimum, Q2 economic performance will be dismal based on most economic forecasts. Shelter‐in‐Place and Stay‐at‐Home Executive Orders for most of the U.S. states now run through April 30, at a minimum.

As of April 1, market confidence was moderate (for the moment) but uncertain in its moderate conviction. Many governments are inducing incentives to support their national economies. On March 27, 2020, the U.S. Congress approved a $2 Trillion stimulus package intended to support payrolls and create economic “breathing room.” The length of the current social‐distancing measures likely impacts future operating performance.

One of the unknowns is, “How long can the world stay shut down, with everyone staying in their home?” There remains hope the onset of summer will slow the virus transmission; there is active concern for healthcare workers and their families, and concern for our own families. A psychologically important factor affecting market confidence is the shocking rate of supply disruption at all levels, particularly in medical supplies and protective equipment; all the more alarming to a U.S. population accustomed to everything on demand.

Based on discussions and interviews with a wide range of market participants, a variety of factors and concerns are prevalent in the market that will likely have a negative impact broadly on CRE values, depending on property type and region. Essential Service Providers will be less impacted (distribution COVID‐19 Impact on Current Valuations 22
1550 Maidu Drive
facilities, medical facilities, grocery service) as the performance of these sectors is expected to continue.

However, the broader market will experience myriad issues based on survey respondents including:

Uncertainty
 Restricted access to capital
 Unemployment concerns (increasing to 15% in Q2)
 GDP decline (‐30% in Q2)
 Duration of crisis
Lender Concerns
 DSCR are impacted based on changes in rental revenue and collections  Loan covenants could trigger due to changes in near‐term value  Borrowers are concerned about their tenants' ability to pay rent  Borrowers are concerned about their ability to keep their loans current  Lenders are also concerned about the need for loan modifications or work outs Publicly Traded Securities
 Stock indexes are down approximately 25% to 30%
 REIT pricing down approximately 25%
 Crude oil down approximately 40%
Return Requirements
 Interest rates may stay in the 4%‐ 4.5% range, despite the Federal Reserve’s reduction efforts.

Banks have to tightly manage their capital reserves and ratios and therefore are requiring higher spreads for current risk profile
 Durability of Cash Flow forces (new) equity investors to reprice risk. Standby (available, uncommitted) equity now has to be patient until a clearer “path forward” emerges  Impact on cap rates would be upward
Each of the above observations provides empirical evidence that the market has shifted downward and real estate values will likewise be impacted, but to what degree is not certain.

Few experts or economists at this point are willing to state a threshold duration at which point everything will return to normal quickly, versus a duration of limited economic activity that spirals into worldwide recession. At the moment, the prevailing hope of the world is that science miraculously manufactures a cure, while in the meantime, all social activity ceases worldwide.

COVID‐19 Impact on Current Valuations 23
1550 Maidu Drive
Integra Current Valuation Framework (April 1 – present) The preceding property market analysis focuses on recent historic trends before the physical and social impacts of the COVID‐19 pandemic were revealed in the U.S. in early March 2020. The property market analysis was current through Q1‐2020 with trends and indications for solid growth by most all market indicators. Many current market participants believe the commercial real estate (CRE) markets will return to trend – the lingering question, “How long will it take?” remains uncertain.

What we do know with reasonable certainty:
 At a minimum, Q2 economic performance will be dismal.  Shelter‐in‐Place and Stay‐at‐Home executive orders will have a profound impact on GDP with rising unemployment damaging forward economic performance for three, if not six months at a minimum.
 The Federal Reserve’s attempt to lower nominal rates was thwarted by lenders setting floors on spreads. Congress subsequently approved a $2 Trillion stimulus package on Friday March 27, 2020. This could provide some economic relief, but businesses, owners, investors, and bankers need to support payroll retention and an aggressive program of economic goodwill throughout all sectors of the economy.

Everything forward beyond those three known factors remains subject to considerable risk/uncertainty.

The current macro‐framework to sustain through this pandemic is to take 2007 “Blend and Extend” methods, and enhance them. Be wary of repricing assets too quickly (downward), lest all asset prices collapse. A market equilibrium in transaction pricing will need to be reset over the coming 60 days, therefore do not delay in providing banking liquidity, and direct incentives to support a transaction reset. Do not backstop transaction repricing for too long because artificial pricing support could become unsustainable, prolonging economic recovery.

Our current surveys of market participants (March 11 – March 30, 2020) indicates a focus in the following areas impacting value:
 Impacts could (should) vary by property type, class, and location  Cost of capital (both debt and equity) is increasing, but at different rates for different asset classes
 Declines in property operations/forecasts (NOI) vary in duration based on property type, class; location; and tenant durability under potential recessionary pressures  Increases in cap rates (and normalized yields) will vary by property type, class and location as will the underlying assumptions on stabilized or periodic cash flow  Marketing times for most assets will increase, but the next 45 days will be uncertain on outright marketability regardless of price. This so far has not yet occurred, although deals and listings have slowed dramatically in these first few weeks. To a large extent, deal flow has COVID‐19 Impact on Current Valuations 24
1550 Maidu Drive
halted based on the sheer physical constraints imposed on property showings/due diligence, etc. under current distancing restrictions.
 Market sentiment in the coming 14 ‐ 30 days regarding healthcare performance/business performance/employment security/physical security will affect market investment expectations, yields, and the temperament for risk.

Impact by Property Type, Class & Location
Below is a graph prepared by Greenstreet Advisors plotting the sensitivity (and risk) associated with various property types with the negative impact on value being greater for those assets with greater sensitivity. Those assets relating to essential business operations (grocery, medical, distribution) are less affected than for example lodging and malls where social distancing is more difficult.

Cost of Capital/Liquidity
The cost of capital, both for debt and equity, had been at near historic lows pre crisis. Borrowers had a myriad of options from a variety of capital sources. As the crisis began to unfold in early 2020, treasury rates were moving down as the Fed sought to keep the market liquid. When it became clear the global crisis had landed in the United States, the Fed moved rates to near zero. Many lending institutions instituted floors (spreads widened) because the fixed costs of doing a deal had to be covered.

As lenders are coming to grips with the severity of the economic outlook, many have pulled back from the market altogether while others reacted by raising interest rates, lowering loan to values, or a combination of both. There are clearly some lenders who are “out” while others remain in the market.

There are fewer options in the market and those options are more expensive today than 30 days ago.

The rise in cost varies notably by property type with agency lenders and HUD determined to provide liquidity to the multi‐family market while at the other end of the spectrum, financing a hotel is challenging, land financing is nonexistent. Assets focused on essential business operations (e.g., grocery or last mile industrial) remain in favor as do net leased assets with recession‐resistant business profiles.

COVID‐19 Impact on Current Valuations 25
1550 Maidu Drive
Equity is less clear at the moment. While large pools of capital were being raised through 2019 and into Q1‐2020, the strategy has suddenly shifted. Equity is available, and deals are finalizing that were contracted pre‐COVID‐19, on the strength of the equity sponsor, but deal flow will likely pause for 15‐ 30 days as equity repricing occurs. This will coincide (hopefully) with an abatement (or clarity) in the world’s critical health status by May 1, 2020.

Declines in Property Operations/Forecasts
The lodging, retail, student housing and senior sectors are generally viewed as expecting to suffer the greatest. Once again, this varies by location and type. Restaurant retail is generally viewed as having greatest risk but is expected to rebound quickly as pent‐up demand explodes when everyone can leave their home. Grocery retail is currently performing well with big box stores setting record sales per square foot.

Radical changes in the employment picture will begin to affect the housing sector, both single‐family and apartments. Apartments will not be immune or “safe” from lost rent, varying by type and location depending on the tenant base employment and its ability to weather a 6 to 12‐month contraction.

There is an expectation in the market that, for many retail centers, tenants will not be paying rent.

Without customers, particularly in states with stay‐at‐home orders, there simply is no revenue available. Tenants and owners alike are reviewing force majeure clauses in their leases.

Rent projections are being held flat in modeling cash flows going forward with the length of time dependent on the asset type.

Depending upon whether values are based on yield capitalization (DCF) or direct capitalization, care must be given to provide “stabilized” forecasts to capitalize; and to normalize yield levels for projecting variable year yield cap.

Premiums on Capitalization Rates
While many deals have fallen out of contract, other deals are still closing. Some are closing at their pre‐crisis contract price levels while many deals are being re‐traded in the market with discounts influenced by property type, location and buyer/seller motivations.

As the transaction market solidifies, the impact on capitalization rates will become clearer. Some market participants believe the answer to market value lies in the capitalization rates while others believe rates are not moving but net operating income in the short run is being impacted. Once again, the answers vary by property type and location.

Clearly, the cost of capital (debt and equity) has increased. Valuation theory suggests via band of investment analysis that as interest rates and cash on cash equity rates increase, capitalization rates increase. A 100 basis point upward movement in interest rates for example, combined with a modest rise in equity returns, can move capitalization rates up over 100 basis points. We temper this analysis however with the understanding that it is difficult to settle on the inputs given the wide range of data in the market. In addition, care must be taken not to “double hit” the analysis by modeling COVID‐19 Impact on Current Valuations 26
1550 Maidu Drive
significantly lower net income via lower performance projections and at the same time raising the return requirements.

Normalization of Yields
All yield capitalization is based on forward forecasting of property performance to generate a current cash flow, and future forecasted reversion. Therefore, the timeframe for the market to reach a point of pricing transparency to “return to par” is the critical assumption in the yield cap.

The longer or less likely the assumptions are, the higher the near‐term yields. Valuation theory and past downward economic cycles suggest a shortening of the holding period and a normalization of “overall yield” applied over the shorter holding period.

As the transaction market solidifies, the impact on investment rates and relationship of assumption risk to market risk will become clearer.

Marketing and Exposure Time
At the present time, there is consensus of declining market demand in CRE transactions, due to market conditions ensuing from COVID‐19. It is natural to assume that exposure time on properties either for sale or lease, will likely be extended. Comparing pre‐COVID‐19 exposure periods (perhaps the best) to the banking crisis of 2008/2009 (perhaps the worst) can glean some differences that could extrapolate to exposure time going forward, i.e. from peak to trough.

Sector Months on Market
March 2008‐09
Months on Market
March 2018‐19
Change in Months % Change Peak to
Trough
Office 29.6 14.8 14.8 100%
Retail 15 11.4 3.6 32%
Industrial 19.6 6.7 12.9 192%
Average 21.4 11.0 10.4 95%
Source: Costar – data presented in Months
Days on the market increased substantially in the last economic crisis of 2008‐2009, with an average of 21 months on market for major property classes. The trailing 12 months preceding the COVID‐19 crisis, days on the market were 11 months.

Based on this historical perspective, marketing time could potentially double from current levels. This would have to be tempered recognizing that the depth and duration of this current economic crisis is tied to a health crisis and may have a conclusion more closely tied to its resolution.

General Public Market Sentiment
General public market sentiment is a changing rollercoaster with each passing day. Right now, sentiment is cautious and trying not to overreact, but provide some relief, negotiate in good faith; try and be humane and understand the entire world is in this together. Some countries take two weeks off each year for holiday, and their entire economy doesn’t fall apart. The world is not going to take another four‐week vacation from large components of consumer‐facing and public activities.

COVID‐19 Impact on Current Valuations 27
1550 Maidu Drive
Most humans are sequestered in their homes with limited social contact, with reasoned concerns for the health and safety of our families and friends, all the while consuming worldwide coverage and analysis of atypical death rates from an infectious virus not seen in over 100 years.

Market sentiment more than likely gets worse in the coming weeks before it gets better absent the announcement of a miracle cure / treatment during that time.

Conclusion
This heightened uncertainty forms the basis of defined risk. Considering the subject’s relative sensitivity to the COVID‐19 risks as of the effective date of the valuation, Integra rates the relative risks of the subject property as of the effective date as follows:

Risk Analysis
Property Type Sensitivity to Risk Low – The subject is vacant residential land.

Property Location Sensitivity to Risk Low – While still located in California, where there are more cases than a majority of the
country, Placer County has a less dense
population and has only seen a small number of
cases.

Cost of Capital Impact\Risk Low to Moderate– Continued capital appears available, and investment in residential
properties is expected to continue. Spreads are
currently reasonable, and agency lending
remains available competitively.

Land Description and Analysis 28
1550 Maidu Drive
Property Analysis
Land Description and Analysis
Land Description
Land Area 0.51 acres; 22,216 SF
Source of Land Area Public Records
Primary Street Frontage Maidu Drive
Secondary Street Frontage Rocky Ridge Drive
Shape Irregular
Corner Yes
Topography Generally level and above street grade
Drainage No problems reported or observed
Environmental Hazards None reported or observed
Ground Stability No problems reported or observed
Flood Area Panel Number 06061C‐1032H
Date November 2, 2018
Zone X
Description Outside of 500‐year floodplain
Insurance Required? No
Zoning; Other Regulations
Zoning Jurisdiction City of Roseville Planning Department Zoning Designation PR
Description Park and Recreation
Legally Conforming? Appears to be legally conforming
Zoning Change Likely? No
Permitted Uses The park and recreation district may be applied to both public and private recreation facilities. It is intended to be applied to larger parks especially community wide facilities, but may also be applied to smaller neighborhood facilities when it is important, due to the planned facilities or natural features, to designate the site for park and recreation uses.

Other Land Use Regulations None noted
Utilities
Service Provider
Water City of Roseville
Sewer City of Roseville
Electricity Roseville Electric
Natural Gas PG&E
Local Phone Various
Land Description and Analysis 29
1550 Maidu Drive
The subject is currently zoned PR, Park and Recreation, and is currently used as a batting cage facility.

As previously noted, this report considers the value of the subject property based on its highest and best economic use, which is single family residential development. It is a hypothetical condition of this report that the subject is zoned R‐1, similar to adjacent development. As of the date of value, the property is generally level, and all offsite improvements are in place. We are not experts in the interpretation of zoning ordinances. An appropriately qualified land use attorney should be engaged if a determination of compliance with zoning is required.

The permitted uses for land within the R‐1, Single Family Residential, includes single‐family residential development. Specifically, the types of land use intended for the R‐1 zoning district include detached single family homes and related uses inclusive of half‐plexes. Density under the general plan for the adjacent residential subdivisions is 3.5 units per acre. The subject cannot be subdivided into multiple lots because it would exceed the maximum allowable density required by zoning.

The subject is improved with batting cage facilities. It is noted that the cost to demolish the batting cage facilities is anticipated to be minimal. Therefore, it is presumed that the demolition costs for the batting cage and ancillary improvements would be only nominally above the overall costs to prepare the lot for vertical improvements. Further, an additional expense to demolish the batting cages is not considered in this valuation. As previously mentioned, the subject is an improved site (currently part of a larger parcel) with access via the existing parking area of Maidu Park. The City plans to use this point of access for their intended well site use. It is an extraordinary assumption of this report that if developed to its highest and best “economic” use (residential lot), access would be provided via an access point from the Maidu Park parking lot. This overall inferior point of access will be considered in our valuation of the subject.

Easements, Encroachments and Restrictions
We were not provided a current title report to review. We are not aware of any easements, encroachments, or restrictions that would adversely affect value. Our valuation assumes no adverse impacts from easements, encroachments, or restrictions, and further assumes that the subject has clear and marketable title.

Seismic Hazards
According to the Seismic Safety Commission, the subject property is located within Zone 3, which is considered to be the lowest risk zone in California. There are only two zones in California: Zone 4, which is assigned to areas near major faults; and Zone 3, which is assigned to all other areas of more moderate seismic activity. In addition, the subject is not located in a Fault‐Rupture Hazard Zone (formerly referred to as an Alquist‐Priolo Special Study Zone), as defined by Special Publication 42 (revised January 1994) of the California Department of Conservation, Division of Mines and Geology.

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

Land Description and Analysis 30
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Looking south across the subject property Looking north across the subject property Looking east across the subject property Looking west across the subject property Looking west along Maidu Drive Looking east along Maidu Drive Land Description and Analysis 31
1550 Maidu Drive
Looking north along Rocky Ridge Drive Looking south along Rocky Ridge Drive Land Description and Analysis 32
1550 Maidu Drive
Site Plan

Land Description and Analysis 33
1550 Maidu Drive
Parcel Map
*Boundaries are approximate
Real Estate Taxes 34
1550 Maidu Drive
Real Estate Taxes
The property tax system in California was amended in 1978 by Article XIII to the State Constitution, commonly referred to as Proposition 13. It provides for a limitation on property taxes and for a procedure to establish the current taxable value of real property by reference to a base year value, which is then modified annually to reflect inflation (if any). Annual increases cannot exceed 2% per year.

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

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

Highest and Best Use 35
1550 Maidu Drive
Highest and Best Use
Process
Before a property can be valued, an opinion of highest and best use must be developed for the subject site, both as vacant, and as improved. By definition, the highest and best use must be:
 Physically possible.
 Legally permissible under the zoning regulations and other restrictions that apply to the site.  Financially feasible.
 Maximally productive, i.e., capable of producing the highest value from among the permissible, possible, and financially feasible uses.

As Vacant
Legally Permissible
The subject is currently zoned PR and currently uses as a batting facility. As previously noted, this report considers the value of the subject property based on its highest and best economic use, which is single family residential development. The highest economic use of the site is based on R‐1 zoning, single family residential, similar to the adjacent parcels. Permitted uses within the R‐1 zoning includes single‐family residential development. Under the R‐1 zoning, the maximum allowable density of 3.5 units per acre, the subject site could be developed with only one residential lot. To our knowledge, there are no legal restrictions such as easements or deed restrictions that would effectively limit the use of the property. Based upon a hypothetical condition, the subject is zoned for single family residential development. Given prevailing land use patterns in the area, only single family residential use is given further consideration in determining highest and best use of the site, as though vacant.

Physically Possible
The physical characteristics of a site that affect its possible use(s) include, but are not limited to, location, street frontage, visibility, access, size, shape, topography, availability of utilities, off‐site improvements, easements and soil and subsoil conditions. The physical characteristics are examined to see if they are suited for the legally permissible use.

Locational considerations include the compatibility and position of the subject property with respect to surrounding uses. Based on our physical inspection of the subject property, we know of no reason why the property would not support development. The size, shape and topography of the subject property appear adequate for development, similar to other projects currently developing in the immediate area.

The subject is not located within a floodplain. In addition, the property is not located within a Fault‐ Rupture Hazard Zone. All utility services are available to the parcels, and evidence of development in the immediate area provides additional support for the possibility of development.

Based on the physical characteristics of the subject property, single family residential development is considered physically possible and most appropriate.

Highest and Best Use 36
1550 Maidu Drive
Financially Feasible
Financial feasibility depends on supply and demand influences. With respect to financial feasibility of single‐family residential development, in recent months merchant builders have acquired unimproved lots for near term construction, and there are multiple active projects in the area that demonstrate demand for new homes. In addition to bulk lot transactions, there have been a number of single remnant lot sales within the past several quarters. Finished lots are transferring for prices that exceed the sum of unimproved lots and site development costs, which reflects completion of site development is financially feasible. Due to the COVID‐19 pandemic and stay at home orders in place, it is financially feasible in the short term (three months).

Maximally Productive
Legal, physical and market conditions have been analyzed to evaluate the highest and best use of the subject property as vacant. The analysis is presented to evaluate the type of use(s) that will generate the greatest level of future benefits possible to the property. Based on the factors previously discussed, the maximally productive use of the subject (as vacant) is for short term single‐family residential development. Specifically, construction of a custom home.

Most Probable Buyer
Taking into account the functional utility of the site and area development trends, the probable buyer is either a speculative homebuilder or an individual home buyer.

Valuation Methodology 37
1550 Maidu Drive
Valuation
Valuation Methodology
Appraisers usually consider three approaches to estimating the market value of real property. These are the cost approach, sales comparison approach and the income capitalization approach.

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

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

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

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

The methodology employed in this assignment is summarized as follows:

Approaches to Value
Approach Applicability to Subject Use in Assignment
Cost Approach Not Applicable Not Utilized
Sales Comparison Approach Applicable Utilized
Income Capitalization Approach Not Applicable Not Utilized Sales Comparison Approach 38
1550 Maidu Drive
Sales Comparison Approach
To develop an opinion of the subject’s land value, as if vacant and available to be developed to its highest and best use, we utilize the sales comparison approach. This approach develops an indication of value by researching, verifying, and analyzing sales of similar properties.

Our sales research focused on transactions within the following parameters:
 Location: Roseville and surrounding areas
 Size: 6,000 to 50,000 square feet
 Use: Residential use
 Transaction Date: 2018 or later
For this analysis, we use price per lot as the appropriate unit of comparison because market participants typically compare sale prices and property values on this basis. In addition to analyzing closed sales, we searched for active listings of residential lot sales. However, we were unable to identify any listings in the subject’s area that were comparable and competitive with the subject.

Sales Comparison Approach 39
1550 Maidu Drive
Summary of Comparable Land Sales
No. Name/Address
Sale
Date;
Status Sale Price
SF;
Acres Zoning
1 4765 Racetrack Road Jan‐20 $145,000 12,188
4765 Racetrack Rd. In‐Contract 0.28
Rocklin
Placer County
CA
2 509 Oak Ravine Court Oct‐19 $280,000 16,805
509 Oak Ravine Ct. Closed 0.39
Roseville
Placer County
CA
3 450 Diamond Oaks Road Dec‐18 $120,000 8,337
450 Diamond Oaks Rd. Closed 0.19
Roseville
Placer County
CA
4 506 Church Street Oct‐18 $83,000 7,427
506 Church St. Closed 0.17
Roseville
Placer County
CA
Subject 22,216
1550 Maidu Drive 0.51
Roseville, CA
Residential
General
Commercial
Single Family
Residential
Single Family
Residential
Park and
Recreation
Comments: This comparable represents the pending sale of the residential lot at 4765 Racetrack Road, Rocklin.

On‐site work is underway at the comparable, as well as a few adjacent lots. It appears the lot is pending while the seller completes grading on‐site, extension of wet and dry utilities and presumable offsites (Racetrack). The offsites are underimproved, just Racetrack Road (not curbs, gutters sidewalk and street lights). This particularly area is characterized with offsite only being the street.

Comments: This is a closed sale of a residential lot within the Stoneridge area of Roseville. All offsite improvements were in place and as of this report the buyer is approximately 40% complete on the new home.

This lot is located in a very desirable area of east Roseville and offers a discernably superior location when compared to the subject.

Comments: This is a sale of a residential lot with all offsite improvements in place. The property is sloped and will require grading prior to developing.

Comments: This sale represents the transfer of a 7,427 square foot parcel that had a vacant residential dwelling on it as of the date of sale (as of this report date the old house is still in place, it is at the end of its economic life).

The sites underlying zoning is for General Commercial uses. However, as cited its prior use was residential. The comparable is flanked on one side by a residential dwelling and on the other by a small commercial building.

While either use may be viable, greater profitability likely liens the way of residential use.

Sales Comparison Approach 40
1550 Maidu Drive
Comparable Land Sales Map
Sales Comparison Approach 41
1550 Maidu Drive
Sale 1
4765 Racetrack Road
Sale 2
509 Oak Ravine Court
Sale 3
450 Diamond Oaks Road
Sale 4
506 Church Street
Sales Comparison Approach 42
1550 Maidu Drive
Analysis and Adjustment of Sales
The comparable transactions are adjusted based on the profile of the subject property with regard to categories that affect market value. Adjustments may be categorized as either superior or inferior, with qualitative adjustments applied accordingly. If a comparable has an attribute considered superior to that of the subject, it is adjusted downward to negate the effect the item has on the price of the comparable. The opposite is true of categories considered inferior to the subject. The adjustments are made in consideration of the appraiser’s experience and knowledge and interviews with market participants. Adjustments are considered for the following factors, in the sequence shown below.

Adjustment Factor Accounts For Comments
Effective Sale Price Atypical economics of a transaction, such as demolition cost or
expenditures by buyer at time of
purchase.

No adjustments required.

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

All the comparables represent fee
simple estate transactions.

Therefore, adjustments for property
rights are not necessary.

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

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

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

It is noted that Sale 1 is a pending
transaction. Based typical
buyer/seller negotiations, this
pending transfer is adjusted
downward.

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

Demand for residential lots was
stable in the 12 months leading up
to the COVID‐19. Due to current
market uncertainty, we have not
adjusted any comparables
transferring in 2019 for market
conditions. Sales 3 and 4 transfer in
late 2018 and also do not require an
adjustment for market conditions.

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

Sale 1 is located in a mature
neighborhood of Rocklin which is
considered to be inferior and is
adjusted upward. Sale 2 is located in
the Stoneridge area of Roseville
which is considered to be
Sales Comparison Approach 43
1550 Maidu Drive
Adjustment Factor Accounts For Comments
significantly superior and is adjusted
downward. Sale 3 is located in a
superior area of Roseville and
requires a downward adjustment.

Sale 4 is located in Downtown
Roseville adjacent to the railroad
tracks; therefore, it is adjusted
upward.

Access/Exposure Convenience to transportation
facilities; ease of site access;
visibility; traffic counts.

The subject has superior
accessibility from Rocky Ridge Drive;
therefore, all of the comparables
are adjusted downward.

Size Inverse relationship that often
exists between parcel size and unit
value.

All of the comparables are smaller
than the subject property and
require an upward adjustment.

Shape and
Topography
Primary physical factors that affect
the utility of a site for its highest
and best use.

Sale 3 has sloped topography that
will require grading prior to
development of the property;
therefore, the slope of the
comparable creates a negative
impact on the comparable. Thus,
Sale 3 is adjusted downward. No
further adjustments are required for
shape and topography.

Zoning Government regulations that affect
the types and intensities of uses
allowable on a site.

Sale 4 is zoned general commercial
but, the property had a residence
previously built on the property.

Further, the property is surrounded
by residential development.

However, it appears that it requires
a condition use permit to construct
a residential use. Therefore, it is
adjusted upward.

Entitlements The specific level of governmental
approvals attained pertaining to
development of a site.

No adjustments required.

Sales Comparison Approach 44
1550 Maidu Drive
Adjustment Factor Accounts For Comments
Off Site
Improvements
Gutters; streets; sidewalks;
streetlights; public utilities
Sale 1 does not have any off site
improvements; however, they are
not required for development of the
property. Therefore, no
adjustments for off site
improvements are required.

The following table summarizes the adjustments we make to each sale.

Land Sales Adjustment Grid
Subject Comparable 1 Comparable 2 Comparable 3 Comparable 4 Address 1550 Maidu Dr. 4765 Racetrack Rd. 509 Oak Ravine Ct. 450 Diamond Oaks Rd.
506 Church St.

Ci ty Roseville Rocklin Roseville Roseville Roseville
Sale Date Jan‐20 Oct‐19 Dec‐18 Oct‐18
Sale Status In‐Contract Closed Closed Closed
Sale Price $145,000 $280,000 $120,000 $83,000
Square Feet 22,216 12,188 16,805 8,337 7,427
Zoning Code PR R‐1 R 1 R‐1 GC
Zoning Description Park and
Recreation
Single Family
Residential
Single Family
Residential
Residential General
Commercial
$145,000 $280,000 $120,000 $83,000
Fee Simple Fee Simple Fee Simple Fee Simple
====
Cash to seller Cash to seller Cash to seller Cash to seller ====
Pending Market Market Market
‐‐ = = =
Market Conditions 4/20/2020 Jan‐20 Oct‐19 Dec‐18 Oct‐18 Adj us tment = = = =
+ ‐‐ ‐ +++
‐‐‐‐
++ + +++ +++
==+=
===+
====
====
Overall Adjustment = ‐‐ ++ ++++++
Indicated Value $145,000
Zoning
Entitlements
Access/Exposure
Size
Sale Price
Property Rights
Financing Terms
Conditions of Sale
Adjustment
Adjustment
Adjustment
Location
Shape and Topography
Off Site Improvements
Sales Comparison Approach 45
1550 Maidu Drive
Land Value Conclusion
The market data set consists of various sales that are considered reasonable indicators of market value for the fee simple interest of the subject property. Prior to adjustment, the sales reflect a range of $83,000 ‐ $280,000 per lot. The wide disparity in the unadjusted range is largely attributable to the size of the lot, location, and shape and topography. Based upon the analysis presented, a ranking analysis of the subject and comparable sales is presented in the table below:

Bulk Lot Ranking Summary
Property Sale Date
$/ Loaded Lot
(Unadjusted) Net Adjustment
Comparable 2 Oct‐19 $280,000 ‐‐
Subject Property ‐‐ $145,000
Comparable 1 Jan‐20 $145,000 =
Comparable 3 Dec‐18 $120,000 ++
Comparable 4 Oct‐18 $83,000 ++++++
As shown, the price per lot value indicator for the subject property is estimated to be lower than Sale 2, similar to Sale 1, and higher than Sales 3, and 4. Guarded reliance is placed on Sale 4 as it was previously developed with a residence; however, it is zoned general commercial and would likely require a conditional use permit to construct a residence. An estimate of market value of $145,000 is estimated for the subject property via the sales comparison approach.

Land Value Conclusion
Indicated Value $145,000
Reconciliation and Conclusion of Value 46
1550 Maidu Drive
Reconciliation and Conclusion of Value
As discussed previously, we use only the sales comparison approach in developing an opinion of value for the subject. The cost and income approaches are not applicable, and are not used.

Based on the preceding valuation analysis and subject to the definitions, assumptions, and limiting conditions expressed in the report, our value opinion follows:

Value Conclusion
Appraisal Premise Interest Appraised Date of Value Value Conclusion Market Value Fee Simple April 20, 2020 $145,000
Extraordinary Assumptions and Hypothetical Conditions

1. As discussed in the report, the subject is an improved site (currently part of a larger parcel) with access via the existing parking area of Maidu Park. The City plans to use this point of access for their intended well site use. It is an extraordinary assumption of this report that i f developed to its highest and best “economic” use (residential lot), access would be provided via an access point from the Maidu Park parking lot.

2. The appraised property is currently a portion of a larger parcel and is not itsel f a legally trans ferable parcel.

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

The value conclusions are based on the following hypothetical conditions. A hypothetical condition is a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis.

The value conclusions are subject to the following extraordinary assumptions. An extraordinary assumption is an assignment‐speci fic assumption as of the effective date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser’s opinions or conclusions.

IMPORTANT MARKET CONDITIONS WARNING: Market Uncertainty from Novel Coronavirus (COVID‐ 19)
The outbreak of the Novel Coronavirus (COVID‐19), declared an outbreak by the World Health Organization (WHO) on January 30, 2020 and subsequently reclassified as a worldwide pandemic on March 11, 2020, has created substantial uncertainty in the worldwide financial markets. Concerns about the ongoing spread of the COVID‐19 (Corona) Virus have resulted in cancellations of a Reconciliation and Conclusion of Value 47
1550 Maidu Drive
substantial number of business meetings, conferences, and sporting and entertainment events in the coming 3‐6 months; the implementation of personal quarantine procedures; a 30‐day lock‐out for travel from most of Europe to the U.S.; and substantial reductions (and restrictions) in other travel by air, rail, bus, and ship.

Exposure Time
Exposure time is the period a property interest would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal. In attempting to estimate a reasonable exposure time for the subject property, we looked at both the historical exposure times of a number of sales, as well as current and past economic conditions. Based on a survey of market participants, a transfer of residential land properties in the region typically occurs within 9‐12 months of exposure. It is estimated the exposure time for the subject property, if appropriately priced, would have been within 9‐12 months of initial exposure.

Marketing Period
Marketing time is an estimate of the time to sell a property interest in real estate at the estimated market value during the period immediately after the effective date of value. A reasonable marketing time is estimated by comparing the recent exposure time of similar properties, and then taking into consideration current and future economic conditions and how they may impact marketing of the subject property. Due to the COVID‐19 pandemic and economic uncertainty we estimate the marketing period would be longer at 12 months.

Certification 48
1550 Maidu Drive
Certification
We certify that, to the best of our knowledge and belief:

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

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

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

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

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

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

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

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

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

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

11. Blake Fassler made a personal inspection of the property that is the subject of this report.

Kevin Ziegenmeyer, MAI, has personally inspected the subject.

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

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

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

Certification 49
1550 Maidu Drive

15. As of the date of this report, Blake Fassler, has completed the Standards and Ethics Education Requirements for Candidates/Practicing Affiliates of the Appraisal Institute.

Blake Fassler
Certified General Real Estate Appraiser
California Certificate # 3007274
Kevin Ziegenmeyer, MAI
Certified General Real Estate Appraiser
California Certificate # AG013567
Assumptions and Limiting Conditions 50
1550 Maidu Drive
Assumptions and Limiting Conditions
This appraisal and any other work product related to this engagement are limited by the following standard assumptions, except as otherwise noted in the report:

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

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

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

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

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

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

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

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

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

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

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

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

6. We have made no survey of the property and assume no responsibility in connection with such matters. Any sketch or survey of the property included in this report is for illustrative purposes only and should not be considered to be scaled accurately for size. The appraisal Assumptions and Limiting Conditions 51
1550 Maidu Drive
covers the property as described in this report, and the areas and dimensions set forth are assumed to be correct.

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

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

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

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

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

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

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

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

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

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

17. The analyses contained in the report necessarily incorporate numerous estimates and assumptions regarding property performance, general and local business and economic Assumptions and Limiting Conditions 52
1550 Maidu Drive
conditions, the absence of material changes in the competitive environment and other matters. Some estimates or assumptions, however, inevitably will not materialize, and unanticipated events and circumstances may occur; therefore, actual results achieved during the period covered by our analysis will vary from our estimates, and the variations may be material.

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

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

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

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

Because we are not experts in the field of environmental conditions, the appraisal report cannot be considered as an environmental assessment of the subject property.

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

22. We are not a building or environmental inspector. The Integra Parties do not guarantee that the subject property is free of defects or environmental problems. Mold may be present in the subject property and a professional inspection is recommended.

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

24. IRR ‐ Sacramento is an independently owned and operated company. The parties hereto agree that Integra shall not be liable for any claim arising out of or relating to any appraisal report or any information or opinions contained therein as such appraisal report is the sole and exclusive responsibility of IRR ‐ Sacramento. In addition, it is expressly agreed that in any Assumptions and Limiting Conditions 53
1550 Maidu Drive
action which may be brought against the Integra Parties arising out of, relating to, or in any way pertaining to the engagement letter, the appraisal reports or any related work product, the Integra Parties shall not be responsible or liable for any incidental or consequential damages or losses, unless the appraisal was fraudulent or prepared with intentional misconduct. It is further expressly agreed that the collective liability of the Integra Parties in any such action shall not exceed the fees paid for the preparation of the assignment (unless the appraisal was fraudulent or prepared with intentional misconduct). It is expressly agreed that the fees charged herein are in reliance upon the foregoing limitations of liability.

25. IRR ‐ Sacramento is an independently owned and operated company, which has prepared the appraisal for the specific intended use stated elsewhere in the report. The use of the appraisal report by anyone other than the Client is prohibited except as otherwise provided.

Accordingly, the appraisal report is addressed to and shall be solely for the Client’s use and benefit unless we provide our prior written consent. We expressly reserve the unrestricted right to withhold our consent to your disclosure of the appraisal report or any other work product related to the engagement (or any part thereof including, without limitation, conclusions of value and our identity), to any third parties. Stated again for clarification, unless our prior written consent is obtained, no third party may rely on the appraisal report (even if their reliance was foreseeable).

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

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

28. The appraisal is also subject to the following:

Assumptions and Limiting Conditions 54
1550 Maidu Drive
Extraordinary Assumptions and Hypothetical Conditions

1. As discussed in the report, the subject is an improved site (currently part of a larger parcel) with access via the existing parking area of Maidu Park. The City plans to use this point of access for their intended well site use. It is an extraordinary assumption of this report that i f developed to its highest and best “economic” use (residential lot), access would be provided via an access point from the Maidu Park parking lot.

2. The appraised property is currently a portion of a larger parcel and is not itsel f a legally trans ferable parcel.

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

The value conclusions are based on the following hypothetical conditions. A hypothetical condition is a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis.

The value conclusions are subject to the following extraordinary assumptions. An extraordinary assumption is an assignment‐speci fic assumption as of the effective date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser’s opinions or conclusions.

Addenda
1550 Maidu Drive
Addendum A
Appraiser Qualifications
Blake Fassler Sacramento
Integra Realty Resources
irr.com
T
F
3825 Atherton Rd
# 500
Rocklin, CA 95765
Experience
Mr. Fassler is a licensed appraiser with Integra Realty Resources, a real estate appraisal firm that engages in a wide variety of real estate valuation and consultation assignments.

He began his appraisal career in March 2017 with Seevers Jordan Ziegenmeyer in Rocklin, California. Currently, Mr. Fassler is obtaining experience in the valuation and analysis of various types of real estate by working on a wide variety of property typed including, but not limited to: multifamily, office, retail, industrial, vacant land, and residential subdivisions.

Licenses
California, Certified General Real Estate Appraiser, 3007274, Expires February 2022 Education
Bachelor of Science in Management Science University of California, San Diego Appraisal Courses Completed are as follows:

Basic Appraisal Principles
Basic Appraisal Procedures
General Appraiser Market Analysis & Highest and Best Use (USPAP), Uniform Standards of Professional Appraisal Practice General Appraiser Report Writing and Case Studies
General Appraiser Site Valuation and Cost Approach
General Appraiser Sales Comparison Approach
General Appraiser Income Approach Part 1
General Appraiser Income Approach Part 2
4-Hour Federal and California Statutory and Regulator Laws [email protected] - 916-505-4471

Kevin Ziegenmeyer, MAI San Francisco
Integra Realty Resources
irr.com
T 916-435-3883
F 916-435-4774
San Francisco, CA 95765
Experience
Mr. Ziegenmeyer is a Certified General real estate appraiser and holds the Appraisal Institute's MAI designation. In 1989, Mr. Ziegenmeyer began his career in real estate as a controller for a commercial and residential real estate development corporation. In 1991 he began appraising and continued to be involved in appraisal assignments covering a wide variety of properties, including office, retail, industrial, residential income and subdivisions throughout the Central Valley area of California, Northern Nevada, and within the Sacramento Metropolitan Area. Over the past several years, Mr. Ziegenmeyer has handled many of the firm’s master-planned property appraisals and has developed expertise in the valuation of Community Facilities Districts and Assessment Districts. In early 2015, Mr. Ziegenmeyer obtained the Appraisal Institute's MAI designation. Kevin is currently Senior Managing Director of the Integra-San Francisco office and Managing Director of the Integra-Sacramento office.

Licenses
California, Certified General Real Estate Appraiser, AG013567, Expires June 2021 Education
Academic:

Bachelor of Science in Accounting, Azusa Pacific University, California Appraisal and Real Estate Courses:

Standards of Professional Practice, Parts A, B & C
Basic Valuation Procedures
Real Estate Appraisal Principles
Capitalization Theory and Techniques, Part A
Advanced Income Capitalization
Report Writing and Valuation Analysis
Advanced Applications
IRS Valuation Summit I & II
2008, 2009, 2010 & 2011 Economic Forecast
Business Practices and Ethics
Contemporary Appraisal Issues with Small Business Administration Financing General Demonstration Appraisal Report Writing Seminar
7-Hour National USPAP Update Course
Valuation of Easements and Other Partial Interests
2009 Summer Conference
Uniform Appraisal Standards for Federal Land Acquisitions 2008 Economic Update
Valuation of Conservation Easements
Subdivision Valuation
2005 Annual Fall Conference
General Comprehensive Exam Module I, II, III & IV
Advanced Income Capitalization
Advanced Sales Comparison & Cost Approaches
2004 Central CA Market Update
Computer-Enhanced Cash Flow Modeling
Forecast 2000, 2001, 2002, 2003 & 2004
Land Valuation Assignments
[email protected] - 916-435-3883 x224
Kevin Ziegenmeyer, MAI San Francisco
Integra Realty Resources
irr.com
T 916-435-3883
F 916-435-4774
San Francisco, CA 95765
Education (Cont'd)
Land Valuation Adjustment Procedures
Highest & Best Use and Market Analysis
Entitlements, Land Subdivision & Valuation
Real Estate Value Cycles
El Dorado Hills Housing Symposium
Federal Land Exchanges
M & S Computer Cost-Estimating, Nonresidential
[email protected] - 916-435-3883 x224

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

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

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

Local Expertise...Nationally!
irr.com
1550 Maidu Drive
Addendum B
Comparable Data

Land Sale Profile Sale No. 1
Location & Property Identification
Property Name: 4765 Racetrack Road
Sub‐Property Type: Residential, Single Family Lot
Address: 4765 Racetrack Rd.

City/State/Zip: Rocklin, CA 95677
County: Placer
Market Orientation:   Suburban
IRR Event ID:    2446784
Sale Information
Sale Price:   $145,000
Effective Sale Price:   $145,000
Sale Date:   01/29/2020
Sale Status: In‐Contract
$/Acre(Gross):   $518,227
$/Land SF(Gross):   $11.90
Grantor/Seller: Equity Smart Investments
Grantee/Buyer: Listing
Assemblage: No
Portfolio Sale: No
Assets Sold: Real estate only
Property Rights: Fee Simple
% of Interest Conveyed: 100.00
Financing: Cash to seller
Document Type: Deed
Verification Type: Secondary Verification
Improvement and Site Data
Legal/Tax/Parcel ID: 045‐090‐003
Acres(Gross): 0.28
Land‐SF(Gross): 12,188
Zoning Code:   R‐1
Zoning Desc.: Single Family Residential
Source of Land Info.: Public Records
Comments

1. This comparable represents the pending sale of the
residential lot at 4765 Racetrack Road, Rocklin. On‐site work is underway at the comparable, as well as a few adjacent lots. It appears the lot is pending while the seller completes grading on‐site, extension of wet and dry utilities and presumable offsites (Racetrack). The offsites are underimproved, just Racetrack Road (not curbs, gutters sidewalk and street lights).

This particularly area is characterized with offsite only being the street.
4765 Racetrack Road

Land Sale Profile Sale No. 2
Location & Property Identification
Property Name: 509 Oak Ravine Court
Sub‐Property Type: Residential, Single Family Lot
Address: 509 Oak Ravine Ct.

City/State/Zip: Roseville, CA 95661
County: Placer
Market Orientation:   Suburban
IRR Event ID:    2446795
Sale Information
Sale Price:   $280,000
Effective Sale Price:   $280,000
Sale Date:   10/04/2019
Sale Status: Closed
$/Acre(Gross):   $725,765
$/Land SF(Gross):   $16.66
Grantor/Seller: The Davis Family Living Trust
Grantee/Buyer: Vman LLC
Portfolio Sale: No
Assets Sold: Real estate only
Property Rights: Fee Simple
% of Interest Conveyed: 100.00
Financing: Cash to seller
Document Type: Deed
Recording No.: 77322
Verification Type: Secondary Verification
Improvement and Site Data
Legal/Tax/Parcel ID: 456‐190‐003
Acres(Gross): 0.39
Land‐SF(Gross): 16,805
Zoning Code:   R 1
Zoning Desc.: Single Family Residential
Source of Land Info.: Public Records
Comments
This is a closed sale of a residential lot within the Stoneridge area of Roseville. All offsite improvements were in place and as of this report the buyer is approximately 40% complete on the new home. This lot is located in a very desirable area of east Roseville and offers a discernably superior location when compared to the subject.
509 Oak Ravine Court

Land Sale Profile Sale No. 3
Location & Property Identification
Property Name: 450 Diamond Oaks Road
Sub‐Property Type: Residential, Single Family Lot
Address: 450 Diamond Oaks Rd.

City/State/Zip: Roseville, CA 95678
County: Placer
Market Orientation:   Suburban
IRR Event ID:    2446845
Sale Information
Sale Price:   $120,000
Effective Sale Price:   $120,000
Sale Date:   12/14/2018
Sale Status: Closed
$/Acre(Gross):   $626,959
$/Land SF(Gross):   $14.39
Grantor/Seller: VLASAK J & M L/TR
Grantee/Buyer: MAKOVEY OLEG
Portfolio Sale: No
Assets Sold: Real estate only
Property Rights: Fee Simple
% of Interest Conveyed: 100.00
Financing: Cash to seller
Document Type: Deed
Recording No.: 89868
Verification Type: Secondary Verification
Improvement and Site Data
Legal/Tax/Parcel ID: 015‐360‐022‐000
Acres(Gross): 0.19
Land‐SF(Gross): 8,337
Zoning Code:   R‐1
Zoning Desc.: Residential
Source of Land Info.: Public Records
Comments
This is a sale of a residential lot with all offsite improvements in place. The property is sloped and will require grading prior to developing.
450 Diamond Oaks Road
Land Sale Profile Sale No. 4
Location & Property Identification
Property Name: 506 Church Street
Sub‐Property Type: Residential, Single Family Lot
Address: 506 Church St.

City/State/Zip: Roseville, CA 95678
County: Placer
Market Orientation:   Suburban
IRR Event ID:    2446838
Sale Information
Sale Price:   $83,000
Effective Sale Price:   $83,000
Sale Date:   10/24/2018
Sale Status: Closed
$/Acre(Gross):   $486,804
$/Land SF(Gross):   $11.18
Grantor/Seller: GARCIA J A & A O TRUST
Grantee/Buyer: MARTINEZ JUAN JOSE
GUERRA
Assets Sold: Real estate only
Property Rights: Fee Simple
% of Interest Conveyed: 100.00
Financing: Cash to seller
Document Type: Deed
Recording No.: 77556
Verification Type: Secondary Verification
Improvement and Site Data
Legal/Tax/Parcel ID: 012‐151‐007
Acres(Gross): 0.17
Land‐SF(Gross): 7,426
Zoning Code:   GC
Zoning Desc.: General Commercial
Source of Land Info.: Public Records
Comments
This sale represents the transfer of a 7,427 square foot parcel that had a vacant residential dwelling on it as of the date of sale (as of this report date the old house is still in place, it is at the end of its economic life). The sites underlying zoning is for General Commercial uses. However, as cited its prior use was residential. The comparable is flanked on one side by a residential dwelling and on the other by a small commercial building. While either use may be viable, greater profitability likely liens the way of residential use.
506 Church Street
Addenda
1550 Maidu Drive
Addendum C
Engagement Letter

Integra Realty Resources
Sacramento
Appraisal of Real Property
Misty Wood Drive
Vacant Land
Misty Wood
Roseville, Placer County, California 95747
Prepared For:

City of Roseville
Effective Date of the Appraisal:

April 30, 2020
Report Format:

Appraisal Report – Standard Format
IRR ‐ Sacramento
File Number: 193‐2020‐0189
Misty Wood Drive
Roseville, California
Integra Realty Resources 590 Menlo Drive T 916.435.3883 Sacramento Suite 1 F 916.435.4774
Rocklin, CA 95765 www.irr.com
May 6, 2020
Trevor Joseph
City of Roseville
2005 Hilltop Circle
Roseville, CA 95747
SUBJECT: Market Value Appraisal
Misty Wood Drive
Roseville, Placer County, California 95747
IRR ‐ Sacramento File No. 193‐2020‐0189
Dear Mr. Joseph:

Integra Realty Resources – Sacramento is pleased to submit the accompanying appraisal of the referenced property. The purpose of the appraisal is to develop an opinion of the market value of the fee simple interest in the property. As will be discussed below, the appraised property is a portion of a larger parcel and is not itself a legally transferable parcel. Thus, for purposes of this valuation our estimate of value is premised on a hypothetical condition that the identified land area of the subject is in fact a legally transferable parcel as of the date of value. The client for the assignment is City of Roseville, and the intended use is for asset monitoring and transfer between City Departments.

The subject is a portion of a parcel of vacant land and contains 0.55 acres or 23,958 square feet of land area. The property is zoned PR, Park and Recreation, and its currently used as open space. Although the subject of this appraisal is land is currently used for a public use, this report considers the value of the subject property based on its highest economic use, which is residential development. The valuation is premised upon the hypothetical condition that the subject is zoned R1, similar to adjacent development. As of the date of value, the property is generally level and all offsite improvements are in place. A more detailed legal and physical description of the subject property is contained within the attached report.

Trevor Joseph
City of Roseville
May 6, 2020

Page 2 ends

Based on the valuation analysis in the accompanying report, and subject to the definitions, assumptions, and limiting conditions expressed in the report, our opinion of value is as follows:

Value Conclusion
Appraisal Premise Interest Appraised Date of Value Value Conclusion Market Value Fee Simple April 30, 2020 $160,000
Extraordinary Assumptions and Hypothetical Conditions

1. 1. As discussed in the report, the subject is an improved site (currently part of a larger parcel) with presumed access via a yet to be created curb cut along the northwestern line of Pleasant Grove Boulevard. The City plans to use this point of access for their intended well site use. It is an extraordinary assumption of this report that if developed to its highest and best “economic” use (residential lot), access would be provided via an access point from the northwestern line of Pleasant Grove Boulevard.

2. From the information provided it appears the subject land area is not impacted by wetlands areas, it does appear that the adjacent land to the east does have wetlands areas. It is an extraordinary assumption of this report that the subject is not impacted by wetlands areas that might be undevelopable.

3. The subject is a lot located adjacent to a subdivision. It is assumed utility extentions (wet and dry) for the subject property are in average condition. If, at some future date, inordinate utility extension/connection costs are necessary, this will have a detrimental impact on value. In that instance, the appraiser reserves the right to amend the opinion of value stated herein.

1. This report considers the value of the subject property based on its highest and best economic use, which is residential development. Consistent with the highest and best economic use, had the subject property not been previously designated for use as a park, the subject would likely have been zoned for residential use, as of the date of value. Therefore, the value estimated herein is subject to a hypothetical condition. It is a hypothetical condition of this report that the subject has been zoned for residential use, consistent with the zoning adjacent to the subject.

2. The appraised property is currently a portion of a larger parcel and is not itsel f a legally transferable parcel.

Thus, for purposes of this valuation, our estimate of value is premised on a hypothetical condition that the identi fied land area of the subject is in fact a legally transferable parcel as of the date of value.

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

The value conclusions are subject to the following extraordinary assumptions. An extraordinary assumption is an assignment‐speci fic assumption as of the effective date regarding uncertain information used in an analysis which, i f found to be false, could alter the appraiser’s opinions or conclusions.

IMPORTANT MARKET CONDITIONS WARNING: Market Uncertainty from Novel Coronavirus (COVID‐19)
Trevor Joseph
City of Roseville
May 6, 2020

Page 3 ends

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

Respectfully submitted,
INTEGRA REALTY RESOURCES ‐ SACRAMENTO
Blake Fassler
Certified General Real Estate Appraiser
California Certificate # 3007274
Telephone: 916‐505‐4471
Email: [email protected]
Kevin Ziegenmeyer, MAI
Certified General Real Estate Appraiser
California Certificate # AG013567
Telephone: 916‐435‐3883, ext. 224
Email: [email protected]
Table of Contents
Misty Wood Drive
Summary of Salient Facts and Conclusions 1
General Information 4
Identification of Subject 4
Sale History 4
Pending Transactions 4
Purpose of the Appraisal 4
Definition of Market Value 5
Definition of Property Rights Appraised 5
Intended Use and User 5
Applicable Requirements 5
Report Format 6
Prior Services 6
Scope of Work 6
Economic Analysis 8
Area Analysis – Placer County 8
Surrounding Area Analysis 13
Residential Market Analysis 18
COVID‐19 Impact on Current Valuations 23
Property Analysis 30
Land Description and Analysis 30
Real Estate Taxes 35
Highest and Best Use 36
Valuation 38
Valuation Methodology 38
Sales Comparison Approach 39
Analysis and Adjustment of Sales 43
Land Value Conclusion 46
Reconciliation and Conclusion of Value 47
Exposure Time 48
Marketing Period 48
Certification 49
Assumptions and Limiting Conditions 51
Addenda
A. Appraiser Qualifications
B. Comparable Data
C. Engagement Letter
Summary of Salient Facts and Conclusions 1
Misty Wood Drive
Summary of Salient Facts and Conclusions
Address
Property Type
Owner of Record
Tax ID
Land Area 0.55 acres; 23,958 SF
Zoning Designation
Highest and Best Use
Exposure Time; Marketing Period 9‐12 months; 12 months
Effective Date of the Appraisal April 30, 2020
Date of the Report May 6, 2020
Property Interest Appraised
Sales Comparison Approach
Number of Sales 4
Range of Sale Dates Oct 18 to Jan 20
Range of Prices per Property (Unadjusted) $83,000 ‐ $280,000 Market Value Conclusion $160,000
The values reported above are subject to the definitions, assumptions, and limiting conditions set forth in the accompanying report of which this summary is a part. No party other than City of Roseville may use or rely on the information, opinions, and conclusions contained in the report. It is assumed that the users of the report have read the entire report, including all of the definitions, assumptions, and limiting conditions contained therein.

PR, Park and Recreation
Residential uses
Fee Simple
City of Roseville
477‐100‐002 (portion of)
Misty Wood
Roseville, Placer County, Cali fornia 95747
Land ‐ Other
Summary of Salient Facts and Conclusions 2
Misty Wood Drive
Extraordinary Assumptions and Hypothetical Conditions

1. 1. As discussed in the report, the subject is an improved site (currently part of a larger parcel ) with presumed access via a yet to be created curb cut along the northwestern line of Pleasant Grove Boulevard. The City plans to use this point of access for their intended well site use. It is an extraordinary assumption of this report that i f developed to its highest and best “economic” use (residential lot), access would be provided via an access point from the northwestern line of Pleasant Grove Boulevard.

2. The appraised property is currently a portion of a larger parcel and is not itsel f a legally trans ferable parcel.

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

The value conclusions are based on the following hypothetical conditions. A hypothetical condition is a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis.

The value conclusions are subject to the following extraordinary assumptions. An extraordinary assumption is an assignment‐speci fic assumption as of the effective date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser’s opinions or conclusions.

Summary of Salient Facts and Conclusions 3
Misty Wood Drive
Given the degree of overall uncertainty present in the economy, forecasts and projections contained herein may change dramatically, or differently than projected under stable market conditions. Our valuation is based upon the best information as of the effective date. Please refer to the COVID‐19 Impact on Current Valuation section of the attached report.

General Information 4
Misty Wood Drive
General Information
Identification of Subject
The subject is a portion of a parcel of vacant land and contains 0.55 acres or 23,958 square feet of land area. The property is zoned PR, Park and Recreation, and its currently used as open space. Although the subject of this appraisal is land is currently used for a public use, this report considers the value of the subject property based on its highest economic use, which is residential development. The valuation is premised upon the hypothetical condition that the subject is zoned R1, similar to adjacent development. As of the date of value, the property is generally level and all offsite improvements are in place. As discussed in the report, the subject is an improved site (currently part of a larger parcel) with presumed access via a yet to be created curb cut along the northwestern line of Pleasant Grove Boulevard. The City plans to use this point of access for their intended well site use. It is an extraordinary assumption of this report that if developed to its highest and best “economic” use (residential lot), access would be provided via an access point from the northwestern line of Pleasant Grove Boulevard. Furthermore, it appears from the information provided that the subject land area is not impacted by wetlands areas, it does appear that the adjacent land to the east does have wetlands areas. It is an extraordinary assumption of this report that the subject is not impacted by wetlands areas that might be undevelopable. A legal description of the property was requested but not provided.

Property Identification
Address Misty Wood
Roseville, Cali fornia 95747
Tax ID 477‐100‐002 (portion of)
Owner of Record City of Roseville
Sale History
To the best of our knowledge, no other sale or transfer of ownership has occurred within the past three years.

Pending Transactions
To the best of our knowledge, the property is not subject to an agreement of sale or an option to buy, nor is it listed for sale, as of the effective appraisal date.

Purpose of the Appraisal
The purpose of the appraisal is to develop an opinion of the market value of the fee simple interest in the property as of the effective date of the appraisal, April 30, 2020. As will be discussed below, the appraised property is a portion of a larger parcel and is not itself a legally transferable parcel. Thus, for purposes of this valuation our estimate of value is premised on a hypothetical condition that the identified land area of the subject is in fact a legally transferable parcel as of the date of value. The date of the report is May 6, 2020. The appraisal is valid only as of the stated effective date or dates.

General Information 5
Misty Wood Drive
Definition of Market Value
Market value is defined as:
“The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
 Buyer and seller are typically motivated;
 Both parties are well informed or well advised, and acting in what they consider their own best interests;
 A reasonable time is allowed for exposure in the open market;  Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and
 The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.” (Source: Code of Federal Regulations, Title 12, Chapter I, Part 34.42[h]; also Interagency Appraisal and Evaluation Guidelines, Federal Register, 75 FR 77449, December 10, 2010, page 77472) Definition of Property Rights Appraised
Fee simple estate is defined as, “Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.”
Source: Appraisal Institute, The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: Appraisal Institute, 2015)
Intended Use and User
The intended use of the appraisal is for asset monitoring and transfer between City Departments. The client and intended user is City of Roseville. The appraisal is not intended for any other use or user. No party or parties other than City of Roseville may use or rely on the information, opinions, and conclusions contained in this report.

General Information 6
Misty Wood Drive
Report Format
This report is prepared under the Appraisal Report option of Standards Rule 2‐2(a) of USPAP. As USPAP gives appraisers the flexibility to vary the level of information in an Appraisal Report depending on the intended use and intended users of the appraisal, we adhere to the Integra Realty Resources internal standards for an Appraisal Report – Standard Format. This format summarizes the information analyzed, the appraisal methods employed, and the reasoning that supports the analyses, opinions, and conclusions.

However, there is a scarcity of sales data that is considered similar to the subject property due to the subject’s characteristics. As discussed in the report, the subject is an improved site (currently part of a larger parcel) with presumed access via a yet to be created curb cut along the northwestern line of Pleasant Grove Boulevard. The City plans to use this point of access for their intended well site use. It is an extraordinary assumption of this report that if developed to its highest and best “economic” use (residential lot), access would be provided via an access point from the northwestern line of Pleasant Grove Boulevard. Furthermore, it appears from the information provided that the subject land area is not impacted by wetlands areas, it does appear that the adjacent land to the east does have wetlands areas. It is an extraordinary assumption of this report that the subject is not impacted by wetlands General Information 7
Misty Wood Drive
areas that might be undevelopable. The subject’s site characteristics will be considered in our valuation.

Research and Analysis
The type and extent of our research and analysis is detailed in individual sections of the report. This includes the steps we took to verify comparable sales, which are disclosed in the comparable sale profile sheets in the addenda to the report. Although we make an effort to confirm the arms‐length nature of each sale with a party to the transaction, it is sometimes necessary to rely on secondary verification from sources deemed reliable.

Inspection
Blake Fassler conducted an on‐site inspection of the property on April 30, 2020. Kevin Ziegenmeyer, MAI, conducted an on‐site inspection on April 30, 2020.

Area Analysis – Placer County 8
Misty Wood Drive
Economic Analysis
Area Analysis – Placer County
Introduction
Placer County is part of the four‐county Sacramento Metropolitan Area, along with the counties of Sacramento, Yolo and El Dorado. The county is located in the north‐central part of California, approximately 420 miles north of Los Angeles, 250 miles south of Oregon, 100 miles northeast of San Francisco, 80 miles west of Lake Tahoe and 100 miles southwest of Reno. The southernmost part of Placer County consists of a valley commonly referred to as South Placer, while the remainder of the county is divided into the Gold Country, where parts of Auburn and Colfax are located, and the High Country, which encompasses Tahoe City and Kings Beach along Lake Tahoe. Placer’s largest cities are Roseville, Rocklin and Lincoln. Elevations in the county range from 165 feet above sea level in Roseville to 10,000 feet above sea level in the Sierra Nevada Mountains.

Following is a table depicting the population change in Placer County and its component cities over the past few years.

As indicated in the previous table, Placer County has experienced a strong average rate of annual growth of 1.6% over the past five years. The cities of Rocklin, Roseville and Lincoln are the fastest Population Trends
City 2014 2015 2016 2017 2018 2019 %/Yr
Auburn 13,948 13,979 14,110 14,262 14,291 14,392 0.6% Colfax 2,027 2,026 2,048 2,068 2,071 2,073 0.5% Lincoln 45,586 46,159 46,974 47,433 47,808 48,277 1.2% Loomis 6,628 6,648 6,686 6,803 6,848 6,887 0.8% Rocklin 59,891 60,502 61,595 64,397 66,711 69,249 3.1% Roseville 127,873 129,120 132,000 134,110 136,260 139,643 1.8% Unincorporated 112,188 112,892 113,030 114,646 115,491 116,170 0.7% Total 368,141 371,326 376,443 383,719 389,480 396,691 1.6% Source: California Department of Finance
Area Analysis – Placer County 9
Misty Wood Drive
growing in the region. Loomis and the unincorporated areas have had relatively little growth. Over the past decade, Placer County has been the fastest‐growing county within the four‐county Sacramento MSA (which also includes Sacramento, El Dorado and Yolo Counties). It is projected this trend will continue for the near future.

Employment & Economy
The California Employment Development Department has reported the following employment data for Placer County over the past several years.

Employment Trends
2014 2015 2016 2017 2018 2019
Labor Force 175,500 176,500 179,800 181,700 185,200 186,700 Employment 164,500 167,600 171,700 174,700 179,400 180,900 Job Growth 2,200 3,100 4,100 3,000 4,700 1,500
Unemployment Rate 6.3% 5.0% 4.5% 3.9% 3.1% 3.1%
Source: Cali fornia Empl oyment Development Depa rtment Area Analysis – Placer County 10
Misty Wood Drive
The area’s largest employment sectors are Trade/Transportation/Utilities, which includes retail and wholesale trade (18.8% of total employment); Educational and Health Services (16.9%); and Leisure and Hospitality (14.0%).

Transportation
Interstate 80, State Highway 65 and State Highway 193 are the major routes traversing the region.

In addition to roadways within the county limits, south Placer County enjoys proximity to many of the Sacramento region’s freeways that provide access to the San Francisco Bay Area to the west, Central and Southern California to the south, Northern California and Oregon to the north, and Nevada to the east. Sacramento International Airport is situated about 10 miles west of the county border. The county is also home to a couple of small private airports. The region has good railroad service, including the transcontinental Union Pacific Railroad and Amtrak. The Capitol Corridor system Largest Employers
Employer Industry Employees
1 Kaiser Permanente Healthcare 6,015
2 Sutter Health Healthcare 5,835
3 Squaw Valley Alpine Meadows Leisure/Hospitality 2,600 4 Thunder Valley Casino Resort Leisure/Hospitality 2,500 5 Sierra Joint Community College District Education 2,149 6 PRIDE Industries Professional/Business Services 1,291 7 Hewlett Packard Enterprise Co. Electronics/Technology Manufacturing 1,200 8 City of Roseville Government 1,162
9 Safeway Grocery Store 1,119
10 Union Pacific Railroad Co. Inc. Railroad 990
Source: Sacramento Business Journal, The List: Employers ‐ Placer County, December 2019 Area Analysis – Placer County 11
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provides high‐speed commuter rail service from Roseville to San Jose and Placer County Transit provides seven fixed routes servicing areas from Colfax down to Watt Avenue in Sacramento.

In terms of higher education, Placer County is home to Sierra College in Rocklin, a two‐year community college offering a wide range of day and evening classes serving over 25,000 students.

Area Analysis – Placer County 12
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Area Map
Surrounding Area Analysis 13
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Surrounding Area Analysis
Location
The boundaries of a neighborhood identify the physical area that influences the value of the subject property. These boundaries may coincide with observable changes in prevailing land use or occupant characteristics. Physical features such as the type of development, street patterns, terrain, vegetation and parcel size tend to identify neighborhoods. Roadways, waterways and changing elevations can also create neighborhood boundaries.

The subject property is located within the West Roseville area of the city of Roseville, Placer County, California. The subject’s neighborhood boundaries can generally be described as Foothills Boulevard to the east, Baseline Road to the south, and the city limits of Roseville to the west and north.

A map identifying the location of the property follows this section.

Access and Linkages
The main surface streets in the neighborhood that provide access to the subject are Foothills Boulevard and Pleasant Grove Boulevard, which links with Fiddyment Road to the west. In a southerly direction, Fiddyment Road connects to Baseline Road (another thoroughfare that eventually connects with Highway 99 in a westerly direction) and continues south (when it becomes Walerga Road) to the communities of Antelope and North Highlands. In a northerly direction, Fiddyment Road connects to areas of unincorporated Placer County and the outskirts of the city of Lincoln (where it terminates at Moore Road). Pleasant Grove Boulevard is a major east/west thoroughfare through the city of Roseville and into Rocklin. Foothills Boulevard is a major north/south thoroughfare through the city of Roseville connecting the most northern portion of Roseville with Downtown Roseville. Access to State Highway 65 is available via Pleasant Grove Boulevard traveling east.

State Highway 65 is a north‐south route that provides access to Lincoln, Wheatland and Yuba City to the north and Interstate 80 to the south. Interstate 80 is a primary east‐west corridor for the Sacramento Metropolitan Area that intersects with State Highway 65 to the east of the subject property.

Traveling east, Interstate 80 provides access to the outlying portions of Placer County and continues toward Reno, Nevada. To the west, Interstate 80 connects the subject neighborhood to Sacramento’s Central Business District (via Business 80/Capital City Freeway) before continuing on toward Davis and San Francisco.

Roseville Transit provides public transportation for the area, which features fixed bus routes, commuter services and ride sharing minivans. Free transfers are also provided for Placer County Transit and Sacramento Regional Transit.

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

Surrounding Area Analysis 14
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Surrounding Area Demographics
2020 Estimates 1‐Mile Radius 3‐Mile Radius 5‐Mile Radius 95747 (Roseville,
CA) Placer County, CA
Population 2010 12,467 86,957 217,377 52,316 348,432
Population 2020 13,763 101,422 250,889 67,001 398,650
Population 2025 14,476 107,132 264,053 71,241 419,234
Compound % Change 2010‐2020 1.0% 1.6% 1.4% 2.5% 1.4%
Compound % Change 2020‐2025 1.0% 1.1% 1.0% 1.2% 1.0%
Households 2010 4,838 32,356 79,144 19,070 132,627
Households 2020 5,294 37,608 91,102 24,277 153,060
Households 2025 5,553 39,700 95,903 25,809 161,485
Compound % Change 2010‐2020 0.9% 1.5% 1.4% 2.4% 1.4%
Compound % Change 2020‐2025 1.0% 1.1% 1.0% 1.2% 1.1%
Median Household Income 2020 $88,898 $91,023 $86,909 $105,426 $88,748 Average Household Size 2.6 2.7 2.7 2.8 2.6
College Graduate % 37% 38% 34% 40% 38%
Medi an Age 41 39 39 40 43
Owner Occupied % 62% 68% 66% 78% 71%
Renter Occupied % 38% 32% 34% 22% 29%
Median Owner Occupied Housing Value $469,010 $499,081 $466,567 $530,164 $557,525 Median Year Structure Built 1994 1999 1995 2002 1994
Average Travel Time to Work in Minutes 28 28 29 31 30
Source: Environics Analytics
As shown above, the current population within a 3‐mile radius of the subject is 101,422, and the average household size is 2.7. Population in the area has grown since the 2010 census, and this trend is projected to continue over the next five years. Compared to Placer County overall, the population within a 3‐mile radius is projected to grow at a slower rate.

Median household income is $91,023, which is higher than the household income for Placer County.

Residents within a 3‐mile radius have a similar level of educational attainment than those of Placer County, while median owner occupied home values are lower.

Land Uses
A map of land uses in the vicinity of the subject is provided as follows:

Subject’s Immediate Surroundings
North: Vacant land
South: Senior living community
East: Community use
West: Community use / Residential development
Surrounding Area Analysis 15
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*The red star indicates the location of the subject property Major land uses in the subject’s immediate area include TopGolf, Sam’s Club, WalMart, Wendy’s, Panera Bread, GameStop, Sleep Train Mattress Center and Chick‐fil‐A northeast of the subject, along the west line Highway 65. Additionally, Target, PetSmart, Kohl’s, and BevMo are located across Highway 65. North of the subject, uses include Arena Softball, an indoor softball facility, Habitat for Humanity, White Cap Construction Supply, a 200,000 square foot FedEx distribution center, the multi‐ building campus of Hewlett‐Packard Company and a large industrial facility occupied by Telefunken Semiconductors. Additionally, construction on a three‐story, 122,385± square foot building was recently completed, which serves as the region’s second FBI headquarters building. This building is located at the southwest corner of Blue Oaks and Washington Boulevards. North of the subject, at the intersection of Woodcreek Oaks and Blue Oaks Boulevards, is a Safeway anchored shopping center with fueling station, which also houses Chase Bank, Bank of America, and Round Table Pizza, among others.

The Blue Oaks Town Center, located along Highway 65 at the northeast corner of Blue Oaks and Lonetree Boulevards, features an open air shopping center comprised of a unique mix of retail shops, restaurants, and neighborhood services including RC Wiley, Petco, Sportsman’s Warehouse, Dollar Tree, Mattress Firm, The Original Mel’s Diner, Skipolini’s, Blue Oaks Century Theatres Cinema, Crunch Fitness, Starbucks, and Carl’s Jr. Also in this area, at the southwest quadrant of Blue Oaks and Lonetree Boulevards, is Applebee’s Grill & Bar, University of Beer Rocklin, Chili’s Bar & Grill, Spring Hill Suites and TownePlace Suites by Marriott and Chevron.

Westbrook
(under development)
Diamond Creek
Surrounding Area Analysis 16
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Local residential development is characterized by both new and mature single‐family residential homes, as well as several apartment complexes. Overall, residential properties tend to exhibit effective ages from new to 20 years and are considered to be in average to good condition. New homes have been developed in master planned neighborhoods in Woodcreek Oaks, Silverado Oaks, Highland Reserve and Crocker Ranch. Del Webb Sun City, a retirement community, is located proximate to the subject’s neighborhood, and consists of over 1,600 single‐family homes for buyers aged 55 and older. This community includes golf courses and recreation centers operated by the Del Webb Homeowners Association. The subject’s neighborhood now represents an established area of Roseville with a significant population base. Despite the urbanization of this area over the last 10‐15 years, there are still tracts of vacant land located within the subject’s immediate area along Foothills Boulevard, Woodcreek Oaks Boulevard, and Blue Oaks Boulevard.

Community Uses
There are several community uses in the neighborhood, such as schools, religious facilities, medical facilities, parks, and recreational and cultural facilities. The most prominent recreational facility in the neighborhood is Mahany Park, a regional park at the southwest quadrant of Woodcreek Oaks Boulevard and Pleasant Grove Boulevard. This facility offers a softball complex and the neighboring Roseville Aquatics Complex and Roseville Sports Center. There are several golf courses in the neighborhood, including the public Woodcreek Oaks Golf Club and Diamond Oaks Municipal Golf Course, as well as the private Sierra View Country Club and 27 holes in the Sun City Roseville development.

Woodcreek High School is located on the west line of Woodcreek Oaks Boulevard, south of Pleasant Grove Boulevard. The Placer County Fairgrounds is located at the intersection of Junction Boulevard and Washington Boulevard. There are two main hospitals in Roseville, both of which are located in east Roseville, just south of Interstate 80 – Kaiser Permanente, located at the northeast corner of Rocky Ridge Drive and Douglas Boulevard, and Sutter Roseville Medical Center on Roseville Parkway.

Kaiser completed a 750,000‐square foot expansion at its Roseville site in early 2009. This expansion added a new women’s and children’s health center, enhanced emergency department, parking garages and other medical buildings.

Conclusion
In conclusion, the subject is located in an expanding suburban area that should continue to experience adequate demand for various urban property uses. Overall, the neighborhood offers a balanced mix of land uses. The area has good access to neighborhood thoroughfares. Households in the area have above‐average income levels, and the community appeal is good. The characteristics of the neighborhood relative to other parts of the Sacramento region are desirable, though the COVID‐19 pandemic may adversely affect property values in the near term.

Surrounding Area Analysis 17
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Surrounding Area Map

Residential Market Analysis 18
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Residential Market Analysis
Given prevailing land use patterns and the subject’s zoning, a likely use of the property is for residential development. In the following paragraphs, we examine supply and demand indicators for residential development in the subject’s area.

Single‐Family Building Permits
Single‐family building permits for the city of Roseville as well as Placer County totals are shown in the following table.

New Home Pricing and Sales
The Gregory Group surveys active new home projects in California and Nevada. On the following page we present a table containing indicators for active single‐family residential projects the subject’s County for the past four years. The data include both attached and detached projects, but the vast majority of units are detached homes.

Building Permits
Year City of Roseville Placer County
2007 1,050 2,188
2008 676 1,393
2009 602 1,130
2010 635 1,087
2011 411 812
2012 663 1,189
2013 535 1,268
2014 645 1,636
2015 967 1,996
2016 862 2,107
2017 1,191 2,500
2018 808 1,884
2019 998 2,035
2020 (Feb.) 156 319
Source: SOCDS Building Permits Database
Residential Market Analysis 19
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In terms of the number of home sales in Placer County, over the last 12 months, the average was 2.54 sales per month per project, which was slightly down from the average for the prior 12‐month period of 2.57 sales per month per project.

New Home Sales History
Time
Period Average price
% Change
Average Price
Average Home
Size (SF)
Average
Price/Avg
SF
% Change
Price/SF
Quarter
Sold
Number of
Projects
Sold Per Proj.

Per Month
1Q 2016 $490,226 ‐ 2,675 $183.26 ‐ 428 49 2.91
2Q 2016 $500,866 2.2% 2,700 $185.51 1.2% 462 53 2.91
3Q 2016 $512,573 2.3% 2,735 $187.41 1.0% 352 53 2.21
4Q 2016 $519,126 1.3% 2,737 $189.67 1.2% 401 55 2.43
1Q 2017 $520,325 0.2% 2,698 $192.86 1.7% 493 59 2.79
2Q 2017 $526,062 1.1% 2,688 $195.71 1.5% 700 61 3.83
3Q 2017 $513,858 ‐2.3% 2,610 $196.88 0.6% 341 55 2.07
4Q 2017 $519,636 1.1% 2,606 $199.40 1.3% 332 56 1.98
1Q 2018 $517,797 ‐0.4% 2,538 $204.02 2.3% 520 60 2.89
2Q 2018 $533,097 3.0% 2,566 $207.75 1.8% 535 57 3.13
3Q 2018 $546,323 2.5% 2,568 $212.74 2.4% 373 50 2.49
4Q 2018 $552,195 1.1% 2,570 $214.86 1.0% 248 47 1.76
1Q 2019 $558,717 1.2% 2,587 $215.97 0.5% 399 47 2.83
2Q 2019 $562,415 2.9% 2,559 $219.78 3.3% 433 55 2.62
3Q 2019 $561,823 1.7% 2,533 $221.80 3.2% 388 54 2.40
4Q 2019 $551,303 ‐1.3% 2,477 $222.57 3.1% 372 54 2.30
Residential Market Analysis 20
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Active Projects
Project Master Plan Community Developer
Average
Price
Avg.

Home
Average
Price/SF
Typical
Lot Size
Units
Planne
Units
Offered
Units
Sold
Units
Unsold
Blume Solaire Roseville Taylor Morrison Homes $483,657 2,314 $209 5,000 73 73 73 0 Cadence WestPark Roseville KB Home $472,500 2,119 $223 4,050 88 66 65 1 Catalina Fiddyment Farm Roseville Taylor Morrison Homes $487,990 2,314 $211 5,250 45 16 5 11 Corvara Fiddyment Farm Roseville Lennar Homes $534,990 2,469 $217 4,000 134 65 60 5 Eclipse Heritage Solaire Roseville Lennar Homes $584,657 2,627 $223 6,000 156 97 88 9 Farms at Riolo Mariposa No Roseville Homes by Towne $486,765 2,271 $214 7,000 107 51 34 17 Fieldstone Fiddyment Farm Roseville Richmond American Homes $477,700 2,172 $220 6,500 60 5 2 3 Larissa Heritage Solaire Roseville Lennar Homes $514,990 2,111 $244 5,000 91 91 82 9 Liberty Village No Roseville Taylor Morrison Homes $410,990 1,775 $232 2,200 53 45 32 13 Meridian Heritage Solaire Roseville Lennar Homes $435,240 1,546 $282 4,500 175 104 96 8 Monarch Fiddyment Farm Roseville Taylor Morrison Homes $520,323 2,468 $211 5,775 94 16 8 8 Monterosa Fiddyment Farm Roseville Lennar Homes $553,990 2,569 $216 5,500 68 68 64 4 Monument Village Sierra Vista Roseville JMC Homes $489,990 2,100 $233 4,500 92 68 68 0 Morgan Ranch No Roseville Homes by Towne $602,917 3,024 $199 10,000 61 36 28 8 Northwood ll Fiddyment Farm Roseville JMC Homes $445,990 1,455 $307 5,775 116 116 116 0 Palisade Village Sierra Vista Roseville JMC Homes $439,490 1,631 $269 3,600 88 42 41 1 Pinnacle Village Sierra Vista Roseville JMC Homes $612,990 2,657 $231 7,150 82 51 50 1 Ravenna No Roseville JMC Homes $503,323 1,961 $257 5,775 92 14 3 11 Summerwood Fiddyment Farm Roseville JMC Homes $497,490 1,826 $272 6,050 125 125 125 0 The Hills at Paradiso Solaire Roseville Woodside Homes $478,990 1,971 $243 4,500 58 39 35 4 The Ridge at Paradiso Solaire Roseville Woodside Homes $515,657 2,175 $237 5,500 42 28 23 5 The Summit WestPark Roseville Meritage Homes $547,450 2,648 $207 6,600 152 100 87 13 Treo Solaire Roseville Taylor Morrison Homes $533,740 2,695 $198 6,000 72 72 72 0 Valleybrook Fiddyment Farm Roseville JMC Homes $754,990 3,572 $211 8,500 70 62 58 4 Veranda Stone Ridge Roseville Elliott Homes $414,200 1,652 $251 3,000 149 120 120 0 Wildwood Fiddyment Farm Roseville JMC Homes $602,190 2,716 $222 6,600 169 115 108 7 Woodbridge Fiddyment Farm Roseville Signature Homes $590,687 2,648 $223 5,500 116 65 62 3 Minimum $410,990 1,455 $198.05 2,200
Maximum $754,990 3,572 $306.52 10,000
Average $518,292 2,277 $231.86 5,549
Residential Market Analysis 21
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Conclusions
We have summarized some of the key points from this section as follows:
 Building permit activity for single‐family residences in Roseville reached a peak about nine years ago, then fell precipitously during the recessionary period, but has been increasing in more recent years and has recently set a new high point in building permit activity in 2017.  New home pricing in Placer County has been in a general increasing pattern over the last four years, the average price and average price per square foot per home has steadily increased and reached its highest point in the most recent quarter.
 New home pricing per square foot of living area in Roseville has been generally increasing over the last three to four years.
 There are currently 27 active new home projects in Roseville with lot sizes of 10,000 square feet and under. This is among the highest levels of active projects observed since the past expansionary period.
 Absorption rates within new home projects in Roseville have ranged from 0.7 to 6.8 sales per month over the past year, with an average of 3.2 sales per month. Note a majority of the newer projects have a lower average per month because they have recently started selling homes.

Aborption
Project Builder
Avg. Home
Price
Avg.

3.2 Average Monthly Pro‐Rata
Residential Market Analysis 22
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 Prior to the COVID‐19 pandemic, we heard of some markets across the nation cooling somewhat and concerns related to the potential of a recession in the next year or two. It appears the COVID‐ 19 pandemic has accelerated the timeline for recession, and it is believed to occur in the near term with many market participants uncertain about today’s market. Overall, demand for new homes in the subject’s market area remains stable, despite the concerns with COVID‐19.

COVID‐19 Impact on Current Valuations 23
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COVID‐19 Impact on Current Valuations
The best measure of any impact on values due to COVID‐19 would be in direct transaction indicators that are objectively verified and clearly show data points, current pricing discovery, and the ability to measure movement in values from a prior baseline; and to understand direction in overall values. This would include sales transactions, leasing activity, vacancy rates and/or cap rates that have visibly moved off of early Q1 levels (baseline), or form a conclusive basis for new pricing. However, given the unique nature and recency of this event, minimal activity is evident from which to draw benchmark comparisons based on transactional data.

Based on discussions and interviews with a wide range of market participants, a variety of factors and concerns are prevalent in the market that will likely have a negative impact broadly on CRE values, depending on property type and region. Essential Service Providers will be less impacted (distribution COVID‐19 Impact on Current Valuations 24
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facilities, medical facilities, grocery service) as the performance of these sectors is expected to continue.

However, the broader market will experience myriad issues based on survey respondents including:

COVID‐19 Impact on Current Valuations 25
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Integra Current Valuation Framework (April 1 – present) The preceding property market analysis focuses on recent historic trends before the physical and social impacts of the COVID‐19 pandemic were revealed in the U.S. in early March 2020. The property market analysis was current through Q1‐2020 with trends and indications for solid growth by most all market indicators. Many current market participants believe the commercial real estate (CRE) markets will return to trend – the lingering question, “How long will it take?” remains uncertain.

Everything forward beyond those three known factors remains subject to considerable risk/uncertainty.

Our current surveys of market participants (March 11 – March 30, 2020) indicates a focus in the following areas impacting value:
 Impacts could (should) vary by property type, class, and location  Cost of capital (both debt and equity) is increasing, but at different rates for different asset classes
 Declines in property operations/forecasts (NOI) vary in duration based on property type, class; location; and tenant durability under potential recessionary pressures  Increases in cap rates (and normalized yields) will vary by property type, class and location as will the underlying assumptions on stabilized or periodic cash flow  Marketing times for most assets will increase, but the next 45 days will be uncertain on outright marketability regardless of price. This so far has not yet occurred, although deals and listings have slowed dramatically in these first few weeks. To a large extent, deal flow has COVID‐19 Impact on Current Valuations 26
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halted based on the sheer physical constraints imposed on property showings/due diligence, etc. under current distancing restrictions.
 Market sentiment in the coming 14 ‐ 30 days regarding healthcare performance/business performance/employment security/physical security will affect market investment expectations, yields, and the temperament for risk.

There are fewer options in the market and those options are more expensive today than 30 days ago.

COVID‐19 Impact on Current Valuations 27
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Equity is less clear at the moment. While large pools of capital were being raised through 2019 and into Q1‐2020, the strategy has suddenly shifted. Equity is available, and deals are finalizing that were contracted pre‐COVID‐19, on the strength of the equity sponsor, but deal flow will likely pause for 15‐ 30 days as equity repricing occurs. This will coincide (hopefully) with an abatement (or clarity) in the world’s critical health status by May 1, 2020.

There is an expectation in the market that, for many retail centers, tenants will not be paying rent.

Without customers, particularly in states with stay‐at‐home orders, there simply is no revenue available. Tenants and owners alike are reviewing force majeure clauses in their leases.

Rent projections are being held flat in modeling cash flows going forward with the length of time dependent on the asset type.

Clearly, the cost of capital (debt and equity) has increased. Valuation theory suggests via band of investment analysis that as interest rates and cash on cash equity rates increase, capitalization rates increase. A 100 basis point upward movement in interest rates for example, combined with a modest rise in equity returns, can move capitalization rates up over 100 basis points. We temper this analysis however with the understanding that it is difficult to settle on the inputs given the wide range of data in the market. In addition, care must be taken not to “double hit” the analysis by modeling COVID‐19 Impact on Current Valuations 28
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significantly lower net income via lower performance projections and at the same time raising the return requirements.

As the transaction market solidifies, the impact on investment rates and relationship of assumption risk to market risk will become clearer.

COVID‐19 Impact on Current Valuations 29
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Most humans are sequestered in their homes with limited social contact, with reasoned concerns for the health and safety of our families and friends, all the while consuming worldwide coverage and analysis of atypical death rates from an infectious virus not seen in over 100 years.

Market sentiment more than likely gets worse in the coming weeks before it gets better absent the announcement of a miracle cure / treatment during that time.

Risk Analysis
Property Type Sensitivity to Risk Low – The subject is vacant residential land.

Land Description and Analysis 30
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Property Analysis
Land Description and Analysis
Land Description
Land Area 0.55 acres; 23,958 SF
Source of Land Area Public Records
Primary Street Frontage Pleasant Grove Boulevard
Shape Rectangular
Corner No
Topography Gently sloping and at street grade
Drainage No problems reported or observed
Environmental Hazards None reported or observed
Ground Stability No problems reported or observed
Flood Area Panel Number 06061C‐0939H
Date November 2, 2018
Zone X
Description Outside of 500‐year floodplain
Insurance Required? No
Zoning; Other Regulations
Zoning Jurisdiction City of Roseville Planning Department Zoning Designation PR
Description Park and Recreation
Legally Conforming? Appears to be legally conforming
Zoning Change Likely? No
Permitted Uses The park and recreation district may be applied to both public and private recreation facilities. It is intended to be applied to larger parks especially community wide facilities, but may also be applied to smaller neighborhood facilities when it is important, due to the planned facilities or natural features, to designate the site for park and recreation uses.

Other Land Use Regulations None noted
Utilities
Service Provider
Water City of Roseville
Sewer City of Roseville
Electricity Roseville Electric
Natural Gas PG&E
Local Phone Various
The subject is currently zoned PR, Parks and Recreation, and is currently used for a public use as a park. As previously noted, this report considers the value of the subject property based on its highest Land Description and Analysis 31
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and best economic use, which is residential development. It is a hypothetical condition of this report that the subject is zoned R1, similar to adjacent development. As of the date of value, the property is gently sloping from west to east, and all offsite improvements are in place. While the property is gently sloping, it appears to the costs to finish grade the parcel would be nominal above the overall costs to prepare the lot for vertical improvements. We are not experts in the interpretation of zoning ordinances. An appropriately qualified land use attorney should be engaged if a determination of compliance with zoning is required.

The permitted uses for land within the R1, Single Family Residential, intended for detached, single‐ family homes inclusive of half‐plexes. The minimum lot area for interior and corner lots are 6,000 and 7,500 square feet, respectively. Density under the general plan for the adjacent residential subdivisions is approximately three units per acre. The subject cannot be subdivided into multiple lots because it would exceed the maximum allowable density required by zoning.

As discussed in the report, the subject is an improved site (currently part of a larger parcel) with presumed access via a yet to be created curb cut along the northwestern line of Pleasant Grove Boulevard. The City plans to use this point of access for their intended well site use. It is an extraordinary assumption of this report that if developed to its highest and best “economic” use (residential lot), access would be provided via an access point from the northwestern line of Pleasant Grove Boulevard. Furthermore, it appears from the information provided that the subject land area is not impacted by wetlands areas, it does appear that the adjacent land to the east does have wetlands areas. It is an extraordinary assumption of this report that the subject is not impacted by wetlands areas that might be undevelopable.

Land Description and Analysis 32
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Looking north across the subject property Looking northwest across the subject property Looking northeast across the subject property Looking west across the subject property Looking east along Pleasant Grove Boulevard Looking west along Pleasant Grove Boulevard Land Description and Analysis 33
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Site Plan

Land Description and Analysis 34
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Parcel Map
*Boundaries are approximate
Real Estate Taxes 35
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Real Estate Taxes
The property tax system in California was amended in 1978 by Article XIII to the State Constitution, commonly referred to as Proposition 13. It provides for a limitation on property taxes and for a procedure to establish the current taxable value of real property by reference to a base year value, which is then modified annually to reflect inflation (if any). Annual increases cannot exceed 2% per year.

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

The subject property is not currently a legal parcel, and tax information is not available for the larger parcel. The subject property has a tax exemption associated with ad valorem taxes, as the current entity occupying the property is a government entity and is tax exempt from ad valorem taxes. Note that if the tenant/user were to change to a private entity, ad valorem taxes would apply. In examining property tax records for an adjacent property, the subject is located in a tax rate area with an ad valorem rate of 1.134741%. Further, the adjacent property similar to other surrounding projects is encumbered by direct charges, one of which represents bond debt for City of Roseville NW CFD #1, which expires in the year 2021. No present value calculation is necessary since there is only one year remaining on the term. The bond debt is less than $0.01 per square feet of land area; therefore, it is not considered in this analysis.

Highest and Best Use 36
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Highest and Best Use
Process
Before a property can be valued, an opinion of highest and best use must be developed for the subject site, both as vacant, and as improved. By definition, the highest and best use must be:
 Physically possible.
 Legally permissible under the zoning regulations and other restrictions that apply to the site.  Financially feasible.
 Maximally productive, i.e., capable of producing the highest value from among the permissible, possible, and financially feasible uses.

As Vacant
Legally Permissible
The subject is currently zoned PR and designated for a parks and recreation use. As previously noted, this report considers the value of the subject property based on its highest and best economic use, which is single family residential development. The highest economic use of the site is based on R1 zoning, Single Family Residential, similar to the adjacent parcels. Permitted uses within the R1 zoning includes detached, single‐family homes inclusive of half‐plexes. Under the R1 zoning, the maximum allowable density of three units per acre, the subject site could be developed with only one residential unit. To our knowledge, there are no legal restrictions such as easements or deed restrictions that would effectively limit the use of the property. Based upon a hypothetical condition, the subject is zoned for single family residential development. Given prevailing land use patterns in the area, only single family residential use is given further consideration in determining highest and best use of the site, as though vacant.

Based on the physical characteristics of the subject property, single family residential development is considered physically possible and most appropriate.

Highest and Best Use 37
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Again, the subject is an improved site (currently part of a larger parcel) with presumed access via a yet to be created curb cut along the northwestern line of Pleasant Grove Boulevard. The City plans to use this point of access for their intended well site use. It is an extraordinary assumption of this report that if developed to its highest and best “economic” use (residential lot), access would be provided via an access point from the northwestern line of Pleasant Grove Boulevard. Furthermore, it appears from the information provided that the subject land area is not impacted by wetlands areas, it does appear that the adjacent land to the east does have wetlands areas. It is an extraordinary assumption of this report that the subject is not impacted by wetlands areas that might be undevelopable.

Financially Feasible
Financial feasibility depends on supply and demand influences. With respect to financial feasibility of single‐family residential development, in recent months merchant builders have acquired unimproved lots for near term construction, and there are multiple active projects in the area that demonstrate demand for new homes. In addition to bulk lot transactions, there have been a number of single remnant lot sales within the past several quarters. Finished lots are transferring for prices that exceed the sum of unimproved lots and site development costs, which reflects completion of site development is financially feasible. Due to the COVID‐19 pandemic and stay at home orders in place, it is deemed financially feasible to construct a new residential dwelling on the subject, after a short term (three months) interim hold.

Maximally Productive
Legal, physical and market conditions have been analyzed to evaluate the highest and best use of the subject property as vacant. The analysis is presented to evaluate the type of use(s) that will generate the greatest level of future benefits possible to the property. Based on the factors previously discussed, the maximally productive use of the subject (as vacant) is for near term single‐family residential development (within 12 months). Specifically, construction of a home consistent with the design and quality of homes in the vicinity. As cited above, a short (three months) interim hold due to COVID‐19 may be warranted.

Most Probable Buyer
Taking into account the functional utility of the site and area development trends, the probable buyer is either a speculative homebuilder or an individual home buyer.

Valuation Methodology 38
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Valuation
Valuation Methodology
Appraisers usually consider three approaches to estimating the market value of real property. These are the cost approach, sales comparison approach and the income capitalization approach.

The methodology employed in this assignment is summarized as follows:

Approaches to Value
Approach Applicability to Subject Use in Assignment
Cost Approach Not Applicable Not Utilized
Sales Comparison Approach Applicable Utilized
Income Capitalization Approach Not Applicable Not Utilized Sales Comparison Approach 39
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Sales Comparison Approach
To develop an opinion of the subject’s land value, as if vacant and available to be developed to its highest and best use, we utilize the sales comparison approach. This approach develops an indication of value by researching, verifying, and analyzing sales of similar properties.

Therefore, a listing was not included. However, Comparable #1 represents a current pending sale. As previously stated, there is a scarcity of sales data that is considered similar to the subject property due to the subject’s characteristics. Again, the subject is an improved site (currently part of a larger parcel) with presumed access via a yet to be created curb cut along the northwestern line of Pleasant Grove Boulevard. The City plans to use this point of access for their intended well site use. It is an extraordinary assumption of this report that if developed to its highest and best “economic” use (residential lot), access would be provided via an access point from the northwestern line of Pleasant Grove Boulevard. Furthermore, it appears from the information provided that the subject land area is not impacted by wetlands areas, it does appear that the adjacent land to the east does have wetlands areas. It is an extraordinary assumption of this report that the subject is not impacted by wetlands areas that might be undevelopable. The most relevant sales are summarized in the following table.

Sales Comparison Approach 40
Misty Wood Drive
Summary of Comparable Land Sales
No. Name/Address
Sale
Date;
Status Sale Price
SF;
Acres Zoning
1 4765 Racetrack Road Jan‐20 $145,000 12,188
4765 Racetrack Rd. In‐Contract 0.28
Rocklin
Placer County
CA
2 509 Oak Ravine Court Oct‐19 $280,000 16,805
509 Oak Ravine Ct. Closed 0.39
Roseville
Placer County
CA
3 450 Diamond Oaks Road Dec‐18 $120,000 8,337
450 Diamond Oaks Rd. Closed 0.19
Roseville
Placer County
CA
4 506 Church Street Oct‐18 $83,000 7,427
506 Church St. Closed 0.17
Roseville
Placer County
CA
Subject 23,958
Misty Wood Drive 0.55
Roseville, CA
Residential
General
Commercial
Single Family
Residential
Single Family
Residential
Park and
Recreation
Comments: 1.This comparable represents the pending sale of the residenƟal lot at 4765 Racetrack Road, Rocklin. On‐site work is underway at the comparable, as well as a few adjacent lots. It appears the lot is pending while the seller completes grading on‐site, extension of wet and dry utilities and presumable offsites (Racetrack).

The offsites are underimproved, just Racetrack Road (not curbs, gutters sidewalk and street lights). This particularly area is characterized with offsite only being the street.

This lot is located in a very desirable area of east Roseville and offers a discernably superior location when compared to the subject.

Comments: This is a sale of a residential lot with all offsite improvements in place. The property is sloped and will require grading prior to developing.

While either use may be viable, greater profitability likely liens the way of residential use.

Sales Comparison Approach 41
Misty Wood Drive
Comparable Land Sales Map
Sales Comparison Approach 42
Misty Wood Drive
Sale 1
4765 Racetrack Road
Sale 2
509 Oak Ravine Court
Sale 3
450 Diamond Oaks Road
Sale 4
506 Church Street
Sales Comparison Approach 43
Misty Wood Drive
Analysis and Adjustment of Sales
The comparable transactions are adjusted based on the profile of the subject property with regard to categories that affect market value. Adjustments may be categorized as either superior or inferior, with percentage adjustments applied accordingly. If a comparable has an attribute considered superior to that of the subject, it is adjusted downward to negate the effect the item has on the price of the comparable. The opposite is true of categories considered inferior to the subject. The adjustments are made in consideration of paired sales, the appraiser’s experience and knowledge and interviews with market participants. Adjustments are considered for the following factors, in the sequence shown below.

Adjustment Factor Accounts For Comments
Effective Sale Price Atypical economics of a transaction, such as demolition cost or
expenditures by buyer at time of
purchase.

No adjustments required.

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

All the comparables represent fee
simple estate transactions.

Therefore, adjustments for property
rights are not necessary.

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

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

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

Sale 1 is a pending transaction and
is adjusted downward to account
for typical buyer/seller negotiations.

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

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

Sale 1 is located in a mature
neighborhood of Rocklin which is
considered to be inferior and is
adjusted upward. Sale 2 is located in
the Stoneridge area of Roseville
which is considered to be
significantly superior and is adjusted
Sales Comparison Approach 44
Misty Wood Drive
Adjustment Factor Accounts For Comments
downward. Sale 3 is located in a
slightly inferior location and
requires an upward adjustment.

Sale 4 is located in Downtown
Roseville adjacent to the railroad
tracks; therefore, it is adjusted
upward.

Access/Exposure Convenience to transportation
facilities; ease of site access;
visibility; traffic counts.

The subject has superior
accessibility from Pleasant Grove
Boulevard; therefore, all of the
comparables are adjusted
downward.

Size Inverse relationship that often
exists between parcel size and unit
value.

All of the comparables are smaller
than the subject and require
upward adjustments.

Shape and
Topography
Primary physical factors that affect
the utility of a site for its highest
and best use.

Sale 3 has sloped topography that
will require grading prior to
development of the property;
therefore, it is adjusted upward. No
further adjustments are required for
shape and topography.

Zoning Government regulations that affect
the types and intensities of uses
allowable on a site.

Sale 4 is zoned general commercial
but, the property had a residence
previously built on the property.

Further, the property is surrounded
by residential development.

However, it appears that it requires
a condition use permit to construct
a residential use. Therefore, it is
adjusted upward.

Entitlements The specific level of governmental
approvals attained pertaining to
development of a site.

No adjustments required.

Off Site
Improvements
Gutters; streets; sidewalks;
streetlights; public utilities
Sale 1 does not have any off site
improvements; however, they are
not required for development of the
property. Therefore, no
adjustments for off site
improvements are required.

The following table summarizes the adjustments we make to each sale.

Sales Comparison Approach 45
Misty Wood Drive
Land Sales Adjustment Grid
Subject Comparable 1 Comparable 2 Comparable 3 Comparable 4 Address Misty Wood 4765 Racetrack Rd. 509 Oak Ravine Ct. 450 Diamond Oaks Rd.
506 Church St.

Ci ty Roseville Rocklin Roseville Roseville Roseville
Sale Date Jan‐20 Oct‐19 Dec‐18 Oct‐18
Sale Status In‐Contract Closed Closed Closed
Sale Price $145,000 $280,000 $120,000 $83,000
Square Feet 23,958 12,188 16,805 8,337 7,427
$145,000 $280,000 $120,000 $83,000
Fee Simple Fee Simple Fee Simple Fee Simple
====
Cash to seller Cash to seller Cash to seller Cash to seller ====
Pending Market Market Market
‐‐ = = =
Market Conditions 4/30/2020 Jan‐20 Oct‐19 Dec‐18 Oct‐18 Adj us tment = = = =
++ ‐ + ++++
‐‐‐‐
++ + +++ +++
==+=
===+
====
====
Overall Adjustment + ‐ ++++ +++++++
Indicated Value $160,000
Zoning
Entitlements
Access/Exposure
Size
Sale Price
Property Rights
Financing Terms
Conditions of Sale
Adjustment
Adjustment
Adjustment
Location
Shape and Topography
Off Site Improvements
Sales Comparison Approach 46
Misty Wood Drive
Land Value Conclusion
The market data set consists of various sales that are considered reasonable indicators of market value for the fee simple interest of the subject property. Prior to adjustment, the sales reflect a range of $83,000 ‐ $280,000 per lot. The wide disparity in the unadjusted range is largely attributable to the size of the lot, location, and shape and topography. Based upon the analysis presented, a ranking analysis of the subject and comparable sales is presented in the table below:

Bulk Lot Ranking Summary
Property Sale Date
$/ Loaded Lot
(Unadjusted) Net Adjustment
Comparable 2 Oct‐19 $280,000 ‐
Subject Property ‐‐ $160,000
Comparable 1 Jan‐20 $145,000 +
Comparable 3 Dec‐18 $120,000 ++++
Comparable 4 Oct‐18 $83,000 +++++++
As shown, the price per lot value indicator for the subject property is estimated to be lower than Sale 2 and higher than Sales 1, 3, and 4. An estimate of market value of $160,000 is estimated for the subject property via the sales comparison approach.

Land Value Conclusion
Indicated Value $160,000
Reconciliation and Conclusion of Value 47
Misty Wood Drive
Reconciliation and Conclusion of Value
As discussed previously, we use only the sales comparison approach in developing an opinion of value for the subject. The cost and income approaches are not applicable, and are not used.

Based on the preceding valuation analysis and subject to the definitions, assumptions, and limiting conditions expressed in the report, our value opinion follows:

Value Conclusion
Appraisal Premise Interest Appraised Date of Value Value Conclusion Market Value Fee Simple April 30, 2020 $160,000
Extraordinary Assumptions and Hypothetical Conditions

1. 1. As discussed in the report, the subject is an improved site (currently part of a larger parcel ) with presumed access via a yet to be created curb cut along the northwestern line of Pleasant Grove Boulevard. The City plans to use this point of access for their intended well site use. It is an extraordinary assumption of this report that i f developed to its highest and best “economic” use (residential lot), access would be provided via an access point from the northwestern line of Pleasant Grove Boulevard.

2. The appraised property is currently a portion of a larger parcel and is not itsel f a legally trans ferable parcel.

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

The value conclusions are based on the following hypothetical conditions. A hypothetical condition is a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis.

The value conclusions are subject to the following extraordinary assumptions. An extraordinary assumption is an assignment‐speci fic assumption as of the effective date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser’s opinions or conclusions.

IMPORTANT MARKET CONDITIONS WARNING: Market Uncertainty from Novel Coronavirus (COVID‐ 19)
Reconciliation and Conclusion of Value 48
Misty Wood Drive
The outbreak of the Novel Coronavirus (COVID‐19), declared an outbreak by the World Health Organization (WHO) on January 30, 2020 and subsequently reclassified as a worldwide pandemic on March 11, 2020, has created substantial uncertainty in the worldwide financial markets. Concerns about the ongoing spread of the COVID‐19 (Corona) Virus have resulted in cancellations of a substantial number of business meetings, conferences, and sporting and entertainment events in the coming 3‐6 months; the implementation of personal quarantine procedures; a 30‐day lock‐out for travel from most of Europe to the U.S.; and substantial reductions (and restrictions) in other travel by air, rail, bus, and ship.

Certification 49
Misty Wood Drive
Certification
We certify that, to the best of our knowledge and belief: