The Natomas sub-market has shown annualized sales between 479 and 1,018 sales per annum since 2016.
Data for 2015 is based on two quarters and reflects the time pe riod when building commenced in the region after several years of no activity. Sales for 2021 show 894 total sales, which dropped in 2022 to 479 sales. Information thorough 2024 shows 134 sales. However, th is is primarily due to the sales of most homes in Northlake Phase 1. This portion of the project genera lly north of the subject is nearing build Quarterly Quarterly Capture Quarterly Capture
Quarter Sold (Natomas) Sold (Sacramento County) % Sold (Sacramento Region) % 3Q 2015 30 349 8.6% 805 3.7%
4Q 2015 98 494 19.8% 1,049 9.3%
TOTALS 128 843 15.2% 1,854 6.9%
1Q 2016 123 638 19.3% 1,352 9.1%
2Q 2016 107 555 19.3% 1,329 8.1%
3Q 2016 123 576 21.4% 1,207 10.2%
4Q 2016 156 558 28.0% 1,199 13.0%
TOTALS 509 2,327 21.9% 5,087 10.0%
1Q 2017 211 667 31.6% 1,541 13.7%
2Q 2017 344 896 38.4% 1,966 17.5%
3Q 2017 249 492 50.6% 1,053 23.6%
4Q 2017 214 485 44.1% 113 189.4%
TOTALS 1,018 2,540 40.1% 4,673 21.8%
1Q 2018 252 697 36.2% 1,448 17.4%
2Q 2018 227 693 32.8% 1,514 15.0%
3Q 2018 236 764 30.9% 1,290 18.3%
4Q 2018 162 520 31.2% 982 16.5%
TOTALS 877 2,674 32.8% 5,234 16.8%
1Q 2019 229 770 29.7% 1,457 15.7%
2Q 2019 282 960 29.4% 1,698 16.6%
3Q 2019 245 755 32.5% 1,428 17.2%
4Q 2019 161 735 21.9% 1,413 11.4%
TOTALS 917 3,220 28.5% 5,996 15.3%
1Q 2020 260 944 27.5% 1,846 14.1%
2Q 2020 170 634 26.8% 1,333 12.8%
3Q 2020 226 1,068 21.2% 2,243 10.1%
4Q 2020 179 1,239 14.4% 2,368 7.6%
TOTALS 835 3,885 21.5% 7,790 10.7%
1Q 2021 281 1,173 24.0% 2,676 10.5%
2Q 2021 237 1,015 23.3% 2,143 11.1%
3Q 2021 195 747 26.1% 1,473 13.2%
4Q 2021 181 924 19.6% 1,807 10.0%
TOTALS 894 3,859 23.2% 8,099 11.0%
1Q 2022 222 1,164 19.1% 2,356 9.4%
2Q 2022 138 744 18.5% 1,580 8.7%
3Q 2022 64 296 21.6% 792 8.1%
4Q 2022 55 366 15.0% 823 6.7%
TOTALS 479 2,570 18.6% 5,551 8.6%
1Q 2023 173 745 23.2% 1,782 9.7%
2Q 2023 159 945 16.8% 1,910 8.3%
3Q 2023 109 867 12.6% 1,929 5.7%
4Q 2023 100 794 12.6% 1,398 7.2%
TOTALS 541 3,351 16.1% 7,019 7.7%
1Q 2024 71 1,220 5.8% 2,355 3.0%
2Q 2024 63 999 6.3% 2,008 3.1%
Smith & Associates, Inc.
out, as well as the entire Natomas sub-market with the exception of Panhandle. It is noted that the master developer renamed the entire community Northlake, whereas final map references still identify the project as Greenbriar.
Construction has commenced in Northlake Phase 2 (Subject Proper t y ) . T h i s i s s y n o n y m o u s w i t h t h e subject property identified as Greenbriar Phase 2. Model homes are completed for 17 units and vertical improvements are under construction for the 208 lots now owned by Lennar Homes of California, LLC.
Sales in the Northlake project are following suit. Initial homes for Northlake (Greenbriar Improvement Area 1) which include 1,137 homes commenced offering sales in January 2021. Through 2Q 2024, 1,098 homes sold in the project, which equates to an average absorpti on of 3.2 sales per month, per project (8 total). The following table summarizes sales activity in this community. Current pricing is reported as of the effective date of valuation.
Overall pricing of homes in this project ranges from $516,000 to $842,990. All of these projects are well received, which bodes well for the subject lots as they will reflect a continuation of these existing projects.
Concession levels identified for this project are based on standing inventory homes.
Another amenity in the region is the current construction of Northlake TK-8 school located in the Phase 2 project area. This facility at 3651 Oyster Point Way opened in August 2024. The school is slated to open one class per grade level, depending on community response, for the inaugural 2024-2025 school year.
As housing progresses, additional classrooms will be opened each year thereafter.
TOTAL TOTAL
PROJECT LOT SIZE (SF) PLAN SIZE (SF) BASE PRICE PLANNED SOLD INVENTO RY AVERAGE Alta 3,403 SF 2,632-3,940 Sold Out 116 116 0 5.5/Mo.
Bleau 5,000 SF 2,150-3,460 $647,990 - $842,990 348 191 157 4.1/Mo.
Crestvue 4,675 SF 1,797-3,178 $598,990 - $745,990 235 99 136 2.2/Mo.
Drifton 5,500 SF 2,282-3,425 $681,990 - $806,990 236 131 105 3.0/Mo.
Lakelet 3,690 SF 2,114-2,360 $603,990 - $627,990 307 138 169 3.1/Mo.
Shor 2,788 SF 1,774-2,190 $540,990 - $598,990 337 143 194 3.2/Mo.
Watersyde 4,000 SF 2,307-2,968 $635,990 - $719,990 276 129 147 2.9/Mo.
Wavmor 4,500 SF 2,134-2,786 $640,990 - $690,990 320 148 172 3.3/Mo.
V14/20 3,690 SF 1,454-1,907 $516,000 - $566,000 139 3 136 N.A TOTALS 2,314 1,098 1,216
Smith & Associates, Inc.
Conclusion
Overall, the immediate area is carefully planned to facilitate long term growth. The development of Metro Air Park, as well as other proposed projects provide demand generators for housing. Future development with Innovation Park and continued residential development in Northlake and future development in the “panhandle” provide a positive outlook for the region.
SUBJECT
Smith & Associates, Inc.
SITE DESCRIPTION
Location
The subject properties reflect the parcels identified within th e Greenbriar Community Facilities District No 2018-3, Improvement Area #2. It is generally located along the northwest quadrant of Interstate 5 and State Highway 99. The overall boundary map is identified as follows.
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APN/Legal Description
The subject properties are identified by the Sacramento County Assessor as numerous parcels. The overall descriptions are based on those identified from the Ass essor’s office, as well as review of the Preliminary Title Report prepared by First American Title Company, dated June 14, 2024. The total parcels identified in this project area are summarized as follows.
The current assessor’s parcel maps are noted as follows.
VILLAGE APN LEGAL
Village 1 201-1540-001..011 Lots 38..48
201-1540-026..061 Lots 1..6, 22..50
201-1600-001..017 Lots 7..21, 51..53
201-1510-045 Lot 3 Remainder
Village 2 201-1540-012..025 Lots 49..62
201-1510-033 Lot 4 Remainder
Village 3 201-1520-001..011 Lots 1..11
Village 4 201-1510-044 Lot 5 Remainder
Village 5 201-1550-001..003 Lots 63..65
201-1590-001..058 Lots 1..58
Village 6 201-1550-016..019 Lots 78..81
201-1640-001..050 Lots 1..50
Village 7 201-1530-001..026 Lots 12..37
Village 8 201-1550-010..015 Lots 72..77
201-1510-037 Lot 9 Remainder
Village 9 201-1550-004..009 Lots 66..71
201-1510-046 Lot 10 Remainder
Village 10 201-1550-020..035 Lots 26..41
201-1630-001..042, 044 Lots 1..25, 42..58, 11A
Village 11 201-1520-012..014 Lots 82..84
201-1510-040 Lot 12 Remainder
Village 12 201-1510-041 Lot 13 Remainder
Village 13 201-1510-014 Lot 14
Village 14 201-1510-016 Lot 16
Village 15 201-1510-042 Lot 18
Village 16 201-1510-017 Lot 17
Village 17 201-1570-001..046 Lots 1..46
Village 18 201-1580-001..059 Lots 1..59
Village 19 201-1510-043 Lot 21
Village 14/20 201-0300-179 Lots 1..80
(Portion) Lot X 8.785 AC 59 Lots
9.18 AC 49 Lots
11.2 AC
Recorded 10-14-2022, Book 443, Page 1Greenbriar Phase 2, Village 18
4.59 AC
5.4 AC 41 Lots
31 Lots
(Includes 2 lots in Village 15)
8.95 AC
5.05 AC
Greenbriar Phase 2, Village 17 Recorded 10-14-2022, Book 442, Pa ge 16 Recorded 3-1-2024, Book 454, Page 3
50 Lots
54 Lots
34 Lots
8.93 AC
Greenbriar Phase 2, Village South Recorded 8-1-2022, Book 440, P age 1
7.67 AC 47 Lots
Greenbriar Phase 2, Village 1
0 60 Lots
Greenbriar Phase 2, Village South Recorded 8-1-2022, Book 440, P age 1 Greenbriar Phase 2, Village 10 Recorded 3-1-2024, Book 454, Page 3
12.23 AC
75 Lots
Greenbriar Phase 2, Village South Recorded 8-1-2022, Book 440, P age 1 68 Lots
Greenbriar Phase 2, Village 6
Recorded 8-1-2022, Book 440, Page 1
Recorded 3-15-2024, Book 454, Page 4
Greenbriar Phase 2, Village South
82 Lots
Greenbriar Phase 2, Village South Recorded 8-1-2022, Book 440, P age 1 Greenbriar Phase 2, Village 5 Recorded 8-1-2022, Book 440, Page 2 Greenbriar Phase 2, Village South Recorded 8-1-2022, Book 440, P age 1 Greenbriar Phase 2, Village South Recorded 8-1-2022, Book 440, P age 1 Greenbriar Phase 1, Village 14A Recorded 5-6-2024, Book 455, Pag e 2
FINAL MAP
Greenbriar Phase 2, Village South
Greenbriar Phase 2, Village 1A
REFERENCE
Recorded 8-1-2022, Book 440, Page 1
Recorded 10-14-2022, Book 442, Page 15
Greenbriar Phase 2, Village 1A Recorded 10-14-2022, Book 442, Pa ge 15
4.39 AC 40 Lots
Greenbriar Phase 2, Village South Recorded 8-1-2022, Book 440, P age 1
9.73 AC
8.8 AC
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It is noted that this map is the most recent available from the Sacramento County Assessor’s Office.
Parcel numbers are identified for the projects with final maps, although not depicted on the map above, as well as remainder parcels for each village. The final maps are identified in the individual descriptions for each village.
Smith & Associates, Inc.
This description includes all of the parcels within the boundar ies of the Greenbriar Community Facilities District No 2018-03, Improvement Area #2, as depicted on the prior page. Residential Components of this project include the following.
Phase 1
Village 14 is the only village from the Phase 1 portion of this project identified as part of Greenbriar Community Facilities District No 2018-03, Improvement Area #2
Phase 2
The table noted above excludes information for Village 14.20 which is depicted on the prior table.
Smith & Associates, Inc.
MINIMUM LAKE FRONT % OF
PROJECT DIMENSIONS LOT SIZE (SF) VILLAGE # LOTS LOTS TOTAL SHOR 41' x 68' 2,788 1 104 0 0%
41' x 68' 2,788 2 89 0 0%
TOTALS - SHOR - 2,788 SF (41' x 68') 193 0 0%
LAKELET 41' x 90' 3,690 4 68 0 0%
41' x 90' 3,690 5 61 0 0%
41' x 90' 3,690 11 44 0 0%
TOTALS - LAKELET - 3,690 SF (41' x 90') 173 0 0%
WATERSYDE 50' x 80' 4,000 3 11 7 64%
50' x 80' 4,000 6 54 14 26%
50' x 80' 4,000 8 88 7 8%
TOTALS - WATERSYDE - 4,000 (50' x 80') 153 28 18.3%
WAVMOR 45' x 100' 4,500 14 54 16 30%
45' x 100' 4,500 15 31 0 0%
45' x 100' 4,500 16 34 0 0%
45' x 100' 4,500 17 44 3 7%
TOTALS - WAVMORE - 4,500 SF (45' x 100') 163 19 11.7%
CRESTVUE 55' x 85' 4,675 7 26 0 0%
55' x 85' 4,675 9 53 5 9%
55' x 85' 4,675 10 59 10 17%
TOTALS - CRESTVUE - 4,675 SF (55' x 85') 138 15 10.9%
BLEAU 50' x 100' 5,000 12 60 14 23%
50' x 100' 5,000 13 50 26 52%
TOTALS - BLEAU - 5,000 SF (50' x 100') 110 40 36.4%
DRIFTON 55' x 100' 5,500 18 59 13 22%
55' x 100' 5,500 19 49 0 0%
TOTALS - DRIFTON - 5,500 SF (55' x 100') 108 13 12.0%
V14/20 PRODUCT LINE 41' x 90' 3,690 14/20 139 0 0%
TOTALS - V14/20 - 3,360 SF (41' x 90') 139 0 0.0%
PROJECT TOTALS 1,177 115 9.8%
Smith & Associates, Inc.
The following table shows the remaining land uses identified within the boundaries of this district.
VILLAGE/LOT # LAND AREA (Net) CURRENT APN USE
2 5.2 AC 201-1510-002 187-Unit Multi-Family Site
15 4.0 AC 201-1510-015 144-Unit Multi-Family Site
B 2.4 AC 201-1510-023 Neighborhood Park
A 1.89 AC 201-1510-022 Neighborhood Park
C 2.2 AC 201-1510-024 Neighborhood Park
I 16.78 AC 201-1510-030 Elementary School Site
F 7.7 AC 201-1510-027 Man-Made Lake
G 11.83 AC 201-1510-028 Man-Made Lake
H 1.8 AC 201-1510-029 Man-Made Lake
J-N 5.9 AC Portion of Small Lot Final Maps Light Rail Corridor O 1.5 AC Por. of 201-1510-001 Community Commercial
P 1.8 AC Por. of 201-1510-001 Park and Ride Lot
Q 0.4 AC 201-0300-197 Sewer Lift Station
R 0.1 AC Por. of 201-1510-026 Proposed Well Site
S 6.1 AC Por. of 201-0300-183 Open Space/Habitat Buffer T 9.0 AC Por. of 201-0300-183 Open Space/Habitat Buffer U 17.5 AC Por. of 201-1510-025 Open Space/Habitat Buffer V-CC 0.7 AC Portion of S mall Lot Final Maps Paseo
DD-GG 0.2 AC Portion of Small Lot Final Maps Landscape Corridor HH 0.7 AC Portion of Small Lot Final Maps Park/Paseo
D/Phase 1 7.5 Por. Of 201-1490-037 Shopping Center
While they are identified within the boundaries of this distric t, they are not revenue generating lots and not part of the subject collateral. All of the properties note d in the prior table are located in the Phase 2 portion of this project.
An overall map illustrating these components is as follows.
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Lot Size (AC)
The total acreage for the district is identified at approximate ly 296.00 gross acres. This includes 127.1 net acres identified for the development of 1,177 residential l o t s , 9 . 2 n e t a c r e s f o r t h e m u l t i - f a m i l y components (beyond scope), 88.1 acres for the non-revenue gener ating parcels, and 58.8 acres for roadways and local residential streets.
This project is identified for the development of twenty (20) residential villages which comprise the 1,177 residential lots.
Proposed Development
T h e land u ses for t h is p roje c t are allocat e d b ase d on t h e m inimu m lot size . T h is p roje ct is u lt im ate ly identified for development of 1,177 residential lots allocated among the parcels described in prior sections. This section of the report identifies the individual villages.
Smith & Associates, Inc.
Village 1: The most current Sacramento County Assessor’s Parcel Map shows Village 1 as parcels 201- 1510-045, 201-1540-026..061, and 201-1600-001…017. It is illustrated as follows.
Since the initial recordation of this master parcel map, the de veloper of this project has recorded small lot final maps including both Greenbriar Phase 2, Village South, as well as Greenbriar Phase 2, Village 1A.
Based upon review of these maps, the overall legal description for Village 1, as of the effective date of valuation is identified as follows.
APN LEGAL DESCRIPTION USE
201-1540-001..011 Lots 38..48 of Greenbriar Phase 2,
Village South, recorded 8-1-2022
In Book 440 of Maps, Page 1
11 Final Map Lots
201-1600-001..017
201-1540-026..061
Lots 1..53 of Greenbriar Phase 2,
Village 1A, recorded 10-14-2022
In Book 442 of Maps, Page 15.
53 Final Map Lots
201-1510-045 Lot 3 Remainder 4.39 AC for 40 Lots
The allocation of Village 1 includes 64 lots with final map app roval and 40 lots with large-lot, tentative map approval as of the effective date of valuation.
Smith & Associates, Inc.
Village 1 comprises 104 lots identified for development of the SHOR product line. It is comprised of a net land area of 7.4 AC, showing a density of 14.1 du/ac. Lots rep resent a typical size of 2,788 SF (41’ x 68’).
There are no lots with lake frontage for this product line.
Smith & Associates, Inc.
Village 2: The most current Sacramento County Assessor’s Parcel Map shows Village 2 as parcels 201- 1510-033, and 201-1540-012..025. It is illustrated as follows.
Since the initial recordation of this master parcel map, the de veloper of this project has recorded small lot final maps including both Greenbriar Phase 2, Village South . Based upon review of these maps, the overall legal description for Village 2, as of the effective date of valuation is identified as follows.
APN LEGAL DESCRIPTION USE
201-1540-012..025 Lots 49..62 of Greenbriar Phase 2,
Village South, recorded 8-1-2022
In Book 440 of Maps, Page 1
14 Final Map Lots
201-1510-033 Lot 4 Remainder 8.8 AC for 75 Lots
The allocation of Village 2 includes 14 lots with final map app roval and 75 lots with large-lot, tentative map approval as of the effective date of valuation.
Smith & Associates, Inc.
Village 2 comprises 89 lots identified for development of the SHOR product line. It is comprised of a net land area of 7.0 AC, showing a density of 12.7 du/ac. Lots rep resent a typical size of 2,788 SF (41’ x 68’).
There are no lots with lake frontage for this product line.
Smith & Associates, Inc.
Village 3: The most current Sacramento County Assessor’s Parcel Map shows Village 3 as parcels 201- 1520-001..011. It is illustrated as follows.
Smith & Associates, Inc.
Based upon review of these maps, the overall legal description for Village 3, as of the effective date of valuation is identified as follows.
APN LEGAL DESCRIPTION USE
201-1520-001..011 Lots 1..11 of Greenbriar Phase 2,
Village South, recorded 8-1-2022
In Book 440 of Maps, Page 1
11 Final Map Lots
The allocation of Village 3 includes 11 lots with final map approval as of the effective date of valuation.
Village 3 comprises 11 lots identified for development of the WATERSYDE product line. It is comprised of a net land area of 1.4 AC, showing a density of 7.9 du/ac. Lot s represent a typical size of 4,000 SF (50’ x 80’). There are 7 lots with lake frontage for this product line.
Smith & Associates, Inc.
Village 4: The most current Sacramento Co unty Assessor’s Parcel Map shows Village 4 as parcel 201- 1510-044. It is illustrated as follows.
Since the initial recordation of this master parcel map, the de veloper of this project has recorded small lot final maps including both Greenbriar Phase 2, Village South. The recordation of this map changed the overall parcel number for this project to 201-1510-044. As such, this project is identified as follows.
APN LEGAL DESCRIPTION USE
201-1510-044 Lot 5 Remainder 9.73 AC for 68 Lots
The allocation of Village 4 includes 68 lots with final map approval as of the effective date of valuation.
Village 4 comprises 68 lots identified for development of the L AKELET product line. It is comprised of a net land area of 6.8 AC, showing a density of 10.0 du/ac. Lots represent a typical size of 3,690 SF (41’ x 90’). There are no lots with lake frontage for this product line. It is noted that this larger land area includes
0.7 AC of land for a Paseo Park.
Smith & Associates, Inc.
Village 5: The most current Sacramento County Assessor’s Parcel Map shows Village 5 as parcels 201- 1550-001..003 and 201-1590-001..058. It is illustrated as follows.
Smith & Associates, Inc.
Based upon review of these maps, the overall legal description for Village 5, as of the effective date of valuation is identified as follows.
APN LEGAL DESCRIPTION USE
201-1550-001..003 Lots 63..65 of Greenbriar Phase 2,
Village South, recorded 8-1-2022
In Book 440 of Maps, Page 1
3 Final Map Lots
201-1590-001..058 Lots 1..58 of Greenbriar Phase 2,
Village 5, recorded 8-1-2022
In Book 440 of Maps, Page 2
58 Final Map Lots
The allocation of Village 5 includes 61 lots with final map approval as of the effective date of valuation.
Village 5 comprises 61 lots identified for development of the L AKELET product line. It is comprised of a net land area of 6.2 AC, showing a density of 9.8 du/ac. Lots represent a typical size of 3,690 SF (41’ x 90’). There are no lots with lake frontage for this product line.
Smith & Associates, Inc.
Village 6: The most current Sacramento County Assessor’s Parcel Map shows Village 5 as parcels 201- 1550-016..019, and 201-1640-001..050. It is illustrated as follows.
Smith & Associates, Inc.
Based upon review of these maps, the overall legal description for Village 6, as of the effective date of valuation is identified as follows.
APN LEGAL DESCRIPTION USE
201-1550-016..019 Lots 78..81 of Greenbriar Phase 2,
Village South, recorded 8-1-2022
In Book 440 of Maps, Page 1
4 Final Map Lots
201-1640-001..050 Lots 1..50 of Greenbriar Phase 2,
Village 6, recoded 3-15-2024
In Book 454 of Maps, Page 4
50 Final Map Lots
The allocation of Village 6 includes 54 lots with final map approval as of the effective date of valuation.
Village 6 comprises 54 lots identified for development of the WATERSYDE product line. It is comprised of a net land area of 5.7 AC, showing a density of 9.5 du/ac. Lot s represent a typical size of 4,000 SF (50’ x 80’). There are 14 lots with lake frontage for this product line.
Smith & Associates, Inc.
Village 7: The most current Sacramento County Assessor’s Parcel Map shows Village 7 as parcels 201- 1530-001..026. It is illustrated as follows.
Smith & Associates, Inc.
Based upon review of these maps, the overall legal description for Village 7, as of the effective date of valuation is identified as follows.
APN LEGAL DESCRIPTION USE
201-1530-001..026 Lots 12..37 of Greenbriar Phase 2,
Village South, recorded 8-1-2022
In Book 440 of Maps, Page 1
26 Final Map Lots
The allocation of Village 7 includes 26 lots with final map approval as of the effective date of valuation.
Village 7 comprises 26 lots identified for development of the CRESTVUE product line. It is comprised of a net land area of 3.3 AC, showing a density of 7.9 du/ac. Lots represent a typical size of 4,675 SF (55’ x 85’). There are no lots with lake frontage for this product line.
Smith & Associates, Inc.
Village 8: The most current Sacramento County Assessor’s Parcel Map shows Village 8 as parcels 201- 1510-037, and 201-1550-010..015. It is illustrated as follows.
Smith & Associates, Inc.
Based upon review of these maps, the overall legal description for Village 8, as of the effective date of valuation is identified as follows.
APN LEGAL DESCRIPTION USE
201-1550-010..015 Lots 72..77 of Greenbriar Phase 2,
Village South, recorded 8-1-2022
In Book 440 of Maps, Page 1
6 Final Map Lots
201-1510-037 Lot 9 Remainder 11.2 AC for 82 Lots
The allocation of Village 8 includes 6 lots with final map approval and 82 lots with large-lot, tentative map approval as of the effective date of valuation.
Village 8 comprises 88 lots identified for development of the WATERSYDE product line. It is comprised of a net land area of 8.8 AC, showing a density of 10.0 du/ac. Lo ts represent a typical size of 4,000 SF (50’ x 80’). There are 7 lots with lake frontage for this product line.
Smith & Associates, Inc.
Village 9: The most current Sacramento County Assessor’s Parcel Map shows Village 9 as parcels 201- 1510-046, and 201-1550-004..009. It is illustrated as follows.
Smith & Associates, Inc.
Based upon review of these maps, the overall legal description for Village 9, as of the effective date of valuation is identified as follows.
APN LEGAL DESCRIPTION USE
201-1550-004..009 Lots 66..71 of Greenbriar Phase 2,
Village South, recorded 8-1-2022
In Book 440 of Maps, Page 1
6 Final Map Lots
201-1510-038 Lot 10 Remainder 7.67 AC for 47 Lots
The allocation of Village 9 includes 6 lots with final map approval and 47 lots with large-lot, tentative map approval as of the effective date of valuation.
Village 9 comprises 53 lots identified for development of the CRESTVUE product line. It is comprised of a net land area of 6.3 AC, showing a density of 8.4 du/ac. Lots represent a typical size of 4,675 SF (55’ x 85’). There are 5 lots with lake frontage for this product line.
Smith & Associates, Inc.
Village 10: The most current Sacramento County Assessor’s Parcel Map shows Village 10 as parcel 201- 1510-039. It is illustrated as follows.
Smith & Associates, Inc.
Based upon review of these maps, the overall legal description for Village 10, as of the effective date of valuation is identified as follows.
APN LEGAL DESCRIPTION USE
201-1550-020..035 Lots 26..41 of Greenbriar Phase 2,
Village 10, recorded 3-1-2024
In Book 454 of Maps, Page 3
16 Final Map Lots
201-1630-001..042, 044 Lots 1..25, 42..58, 11A of Greenbriar Phase 2, Village 10, recorded 3-1-2024
In Book 454 of Maps, Page 3
43 Final Map Lots
The allocation of Village 10 includes 59 lots with final map approval as of the effective date of valuation.
Village 10 comprises 59 lots identified for development of the CRESTVUE product line. It is comprised of a net land area of 7.0 AC, showing a density of 8.4 du/ac. Lot s represent a typical size of 4,675 SF (55’ x 85’). There are 10 lots with lake frontage for this product li ne. It is noted that this includes APN 201- 1630-044, which was recorded as a portion of Lot 11. It is identified as Lot 11A.
Smith & Associates, Inc.
Village 11: The most current Sacramento County Assessor’s Parcel Map shows Village 11 as parcel 201- 1510-040, and 201-1520-012..014. It is illustrated as follows.
Smith & Associates, Inc.
Based upon review of these maps, the overall legal description for Village 11, as of the effective date of valuation is identified as follows.
APN LEGAL DESCRIPTION USE
201-1520-012..014 Lots 82..84 of Greenbriar Phase 2,
Village South, recorded 8-1-2022
In Book 440 of Maps, Page 1
3 Final Map Lots
201-1510-040 Lot 12 Remainder 5.4 AC for 41 Lots
The allocation of Village 11 includes 3 lots with final map app roval, and 41 lots with large-lot tentative map approval as of the effective date of valuation.
Village 11 comprises 44 lots identified for development of the LAKELET product line. It is comprised of a net land area of 4.6 AC, showing a density of 9.6 du/ac. Lots represent a typical size of 3,690 SF (41’ x 90’). There are no lots with lake frontage for this product line.
Smith & Associates, Inc.
Village 12: The most current Sacramento County Assessor’s Parcel Map shows Village 12 as parcel 201- 1510-041. It is illustrated as follows.
Based upon review of these maps, the overall legal description for Village 12, as of the effective date of valuation is identified as follows.
APN LEGAL DESCRIPTION USE
201-1510-041 Lot 13 Remainder 12.23 AC for 60 Lots
The allocation of Village 12 includes 60 lots with large-lot, tentative map approval as of the effective date of valuation.
It is noted that the remainder land area includes areas for the light rail right-of-way along the northern side of this parcel. Village 12 comprises 60 lots identified f or development of the BLEAU product line. It is comprised of a net land area of 7.3 AC, showing a density of 8.2 du/ac. Lots represent a typical size of 5,000 SF (50’ x 100’). There are 14 lots with lake frontage for this product line.
Smith & Associates, Inc.
Village 13: The most current Sacramento County Assessor’s Parcel Map shows Village 13 as parcel 201- 1510-014. It is illustrated as follows.
Based upon review of these maps, the overall legal description for Village 13, as of the effective date of valuation is identified as follows.
APN LEGAL DESCRIPTION USE
201-1510-014 Lot 14 8.93 AC for 50 Lots
The allocation of Village 13 includes 50 lots with large-lot, tentative map approval as of the effective date of valuation.
Village 13 comprises 50 lots identified for development of the BLEAU product line. It is comprised of a net land area of 6.1 AC, showing a density of 8.2 du/ac. Lots repr esent a typical size of 5,000 SF (50’ x 100’).
There are 26 lots with lake frontage for this product line.
Smith & Associates, Inc.
Village 14: The most current Sacramento County Assessor’s Parcel Map shows Village 14 as parcel 201- 1510-016. It is illustrated as follows.
Based upon review of these maps, the overall legal description for Village 14, as of the effective date of valuation is identified as follows.
APN LEGAL DESCRIPTION USE
201-1510-016 Lot 16 8.95 AC for 54 Lots
The allocation of Village 14 includes 54 lots with large-lot, tentative map approval as of the effective date of valuation.
Village 14 comprises 54 lots identified for development of the WAVMOR product line. It is comprised of a net land area of 6.2 AC, showing a density of 8.7 du/ac. Lot s represent a typical size of 4,500 SF (45’ x 100’). There are 16 lots with lake frontage for this product line.
Smith & Associates, Inc.
Village 15: The most current Sacramento County Assessor’s Parcel Map shows Village 15 as parcel 201- 1510-042. It is illustrated as follows.
Based upon review of these maps, the overall legal description for Village 15, as of the effective date of valuation is identified as follows.
APN LEGAL DESCRIPTION USE
201-1510-042 Lot 18 4.59 AC for 31 Lots
The allocation of Village 15 includes 31 lots with large-lot, tentative map approval as of the effective date of valuation. Technically, 2 of these lots were recorded with village 17.
Village 15 comprises 31 lots identified for development of the WAVMOR product line. It is comprised of a net land area of 3.7 AC, showing a density of 8.4 du/ac. Lot s represent a typical size of 4,500 SF (45’ x 100’). There are no lots with lake frontage for this product line.
Smith & Associates, Inc.
Village 16: The most current Sacramento County Assessor’s Parcel Map shows Village 16 as parcel 201- 1510-017. It is illustrated as follows.
Based upon review of these maps, the overall legal description for Village 16, as of the effective date of valuation is identified as follows.
APN LEGAL DESCRIPTION USE
201-1510-017 Lot 17 5.05 AC for 34 Lots
The allocation of Village 16 includes 34 lots with large-lot, tentative map approval as of the effective date of valuation.
Village 16 comprises 34 lots identified for development of the WAVMOR product line. It is comprised of a net land area of 3.7 AC, showing a density of 9.2 du/ac. Lot s represent a typical size of 4,500 SF (45’ x 100’). There are no lots with lake frontage for this product line.
Smith & Associates, Inc.
Village 17: The most current Sacramento County Assessor’s Parcel Map shows Village 17 as parcel 201- 1570-001..046. It is illustrated as follows.
Note: Lots 32 & 33 are part of Village 15. They are shaded blue.
Smith & Associates, Inc.
Based upon review of these maps, the overall legal description for Village 17, as of the effective date of valuation is identified as follows.
APN LEGAL DESCRIPTION USE
201-1570-001..046 Lots 1..46 of Greenbriar Phase 2,
Village 17, recorded 10-14-2022
In Book 442 of Maps, Page 16
44 Final Map Lots
The allocation of Village 17 includes 44 lots with large-lot, tentative map approval as of the effective date of valuation. It is noted that the final map shown on the prior page reflects 46 lots. This includes 2 lots identified for Village 15 (Lots 32 & 33).
Village 17 comprises 44 lots identified for development of the WAVMOR product line. It is comprised of a net land area of 5.6 AC, showing a density of 7.9 du/ac. Lot s represent a typical size of 4,500 SF (45’ x 100’). There are 3 lots with lake frontage for this product line.
Smith & Associates, Inc.
Village 18: The most current Sacramento County Assessor’s Parcel Map shows Village 18 as parcel 201- 1580-001…059. It is illustrated as follows.
Smith & Associates, Inc.
Based upon review of these maps, the overall legal description for Village 18, as of the effective date of valuation is identified as follows.
APN LEGAL DESCRIPTION USE
201-1580-001..059 Lots 1..59 of Greenbriar Phase 2,
Village 18, recorded 10-14-2022
In Book 441 of Maps, Page 1
59 Final Map Lots
The allocation of Village 18 includes 59 lots with final map approval as of the effective date of valuation.
Village 18 comprises 59 lots identified for development of the DRIFTON product line. It is comprised of a net land area of 8.7 AC, showing a density of 6.8 du/ac. Lots represent a typical size of 5,500 SF (55’ x 100’). There are 13 lots with lake frontage for this product line.
Smith & Associates, Inc.
Village 19: The most current Sacramento County Assessor’s Parcel Map shows Village 19 as parcel 201- 1510-043. It is illustrated as follows.
Based upon review of these maps, the overall legal description for Village 19, as of the effective date of valuation is identified as follows.
APN LEGAL DESCRIPTION USE
201-1510-043 Lot 21 9.18 AC for 49 Lots
The allocation of Village 19 includes 49 lots with large-lot, tentative map approval as of the effective date of valuation.
Village 19 comprises 49 lots identified for development of the DRIFTON product line. It is comprised of a net land area of 6.6 AC, showing a density of 7.4 du/ac. Lots represent a typical size of 5,500 SF (55’ x 100’). There are no lots with lake frontage for this product line.
Smith & Associates, Inc.
Village 14/20: This village area is noted in the Phase 1 portion of this pro ject. It was recently rezoned to accommodate residential units and for purposes of this analy sis and identified by the developer, references to this specific project note it as Village 14/20). This is to differentiate this project from Village 14 previously discussed. The most current Sacramento County Assessor’s Parcel Map shows Village 14/20 as parcel 201-0300-179. It is illustrated as follows.
Based upon review of these maps, the overall legal description for Village 14/20, as of the effective date of valuation is identified as follows.
APN LEGAL DESCRIPTION USE
201-0300-179
(Portion)
Lots 1..80, X, of Greenbriar Phase 1,
Village 14A, recorded 5-6-2024, in
Book 455 of Maps, at Page 2
80 Final Map Lots
& 8.785 AC Site
For 59 Lots
The allocation of Village 14/20 in cludes 80 lots with final map approval, and 59 lots with large-lot, tentative map approval as of the effective date of valuation.
Village 14/20 comprises 139 lots identified for development of the V14/20 product line. It is comprised of a net land area of 14.7 AC, showing a density of 9.5 du/ac. Lots represent a typical size of 3,690 SF (41’ x 90’). There are no lots with lake frontage for this product line. A depiction of these lots is noted as follows.
Smith & Associates, Inc.
Smith & Associates, Inc.
Overall: The 1,177 residential lots for this project are delineated as follows.
The table above shows the overall calculation of the allocation of lots within this project. As noted, 115 lots or approximately 9.8% of the total lots in this project ha ve frontage directly adjacent to the man- made lake. This total also represents 11.1% of the lots identified in the Phase 2 portion of this project.
Utilities and Municipal Providers/Site Development Costs
Site development was underway as of the effective date of valua tion. This project is served by public utilities including the following providers.
Park District: City of Sacramento
Fire Protection: City of Sacramento
School District: Twin Rivers Unified School District
S e w e r : S a c r a m e n t o R e g i o n a l S a n i t a t i o n D i s t r i c t Storm Drain: City of Sacramento
W a t e r : C i t y o f S a c r a m e n t o
E l e c t r i c i t y : S M U D
G a s : P G & E
These improvements are currently under construction at the subject property. The current ownership of this project is in the process of delivering finished lots. A ccording to the purchase and sale agreement for this project, finished lots are defined as follows.
“Finished lots” means rough graded residential building lots wh ich have been completed in accordance w i t h t h e s u b d i v i s i o n i m p r o v e m e n t p l a n s a p p r o v e d b y t h e C i t y a n d other applicable agencies and authorities (collectively, the “Applicable Authorities”), the subdivision improvement plans relating thereto, and all civil and soils engineering costs related thereto have been fully paid.
Without limiting the foregoing, “Finished Lot” shall refer to a lot:
1. which is graded substantially in accordance with the grading plans approved by the City, with the pad elevations +/- 0.1 feet certified by Seller’s civi l engineer and compaction certification by Seller’s geotechnical engineer in accordance w ith recommendations of Seller’s geotechnical engineer;
L AKE FRONT % OF
PROJECT DIMENSIONS LOT SIZE (SF) # LOTS LOTS TOTAL
SHOR 41' x 68' 2,788 193 0 0%
LAKELET 41' x 90' 3,690 173 0 0%
WATERSYDE 50' x 80' 4,000 153 28 18.3%
WAVMOR 45' x 100' 4,500 163 19 11.7%
CRESTVUE 55' x 85' 4,675 138 15 10.9%
BLEAU 50' x 100' 5,000 110 40 36.4%
DRIFTON 55' x 110' 5,500 108 13 12.0%
V14/20 41' x 90' 3,690 139 0 0.0%
PROJECT 1,177 115 9.8%
Smith & Associates, Inc.
2. that has water service installed and stubbed into the Lot fr om the property line or back of sidewalk with curb markings to indicate the location of the water lateral, with a water meter box and lid set to grade; that includes a curb stop and a sleeve under the sidewalk, marked with a protective barrier and capable of being energized for immediate service upon completion of a single-family residence on the Lot;
3. that has sewer service installed and stubbed into the Lot fr om the property line or back of sidewalk with curb markings to indicate the location of the sewer lateral and sewer clean-outs set to grade, marked with a protective barrier and capable of being energized for immediate service upon completion of a single-family residence on the Lot;
4. that has all gas, electricity, telephone, and cable television conduits installed and stubbed i n t o t h e L o t f r o m t h e p r o p e r t y l i n e o r b a c k o f s i d e w a l k a n d c a pable of being energized/pressurized/connected for immediate service upon comp letion of the single family residence on such Lot;
5. that has all public storm drain systems, public water system s, sanitary sewer systems, curb, gutter, sidewalk, driveway approaches, joint gas/electric /phone/CATV utilities, including all required utility boxes, and street pavement for public access and Lot frontage improvements constructed and installed;
6. that includes PVC conduit sleeving under sidewalks for futur e irrigation water lines and private lot drainage, on both sides of each lot (two per Lot). Buyer shall be required to install full front yard landscaping and irrigation water lines, including the landscape strip between the back of the curb and sidewalk, for the entire street frontage of each Lot and b o t h st r e e t fr o n t a g e s o n c o r n e r L o t s . T h i s l o t i r r i g at i o n s y s t em will include a separate exterior lockable controller and be serviced by each individual domestic water meter except where specifically designated by Seller as common area s ubject to maintenance by the City;
7. that has all property corners staked or pinned by the projec t engineer and property lines identified on sidewalks, all retaining walls installed around u tility boxes and/or property lines(s) as may be required by plans and/or specifications;
8. where streetlights are in place and energized;
9. where all offsite improvements have been constructed, fully paid for, and energized/pressurized/connected for immediate service or bonded for such that building permits and occupancies can be obtained; and
10. where all required masonry walls and entry and roadway land scaping has been constructed and installed or bonded for such that building perm its and occupancies can be obtained.
Smith & Associates, Inc.
The buyer of this project is responsible for any work related to the vertical constru ction of the homes on the lots, but not limited to the following:
• engineering survey work to locate home foundations;
• lot finish grading required for home foundations and landscap e drainage, front, and rear yard drainage;
• on-lot SWPPP best management practices following Seller’s ini tial installation; • front yard landscaping and irrigation;
• privacy fencing;
• i n s t a l l a t i o n , a t i t s s o l e c o s t a n d e x p e n s e , o f s t r e e t t r e e s , m o w s t r i p s a n d a l l o t h e r improvements not included in this definition of a Finished Lot; and • side yard and rear yard retaining walls that are not required under the subdivision improvement plans or grading plans approved by Applicable Authorities.
T h e d e v e l o p e r o f t h i s p ro j e c t p r o v i d e d t h e o v e r a l l c o s t s f o r s i t e d e v e l o p m e n t o f t h i s p ro j e c t . T h i s is allocated among Backbone Costs, Amenities, and Intract Costs. Certain additional costs for this project include entitlement costs and costs for the Shore Vista overcrossing. These costs are as of September 25, 2024 and include the following:
These costs are considered in the overall valuation of this property.
ENTITLEMENT COSTS
The total entitlement costs for this project are identified at $4,663,939. Based on the schedule of costs provided by the developer, $3,883,163 have been incurred with remaining costs identified at $780,776.
BACKBONE COSTS
The total backbone costs for this project were identified at $9 2,658,798 including applicable contingencies, bonds, and soft costs. This cost reflects the co sts to extend improvements to each individual village identified for this analysis, as well as drainage improvements and roadway costs for this project. These costs are allocated as follows.
Smith & Associates, Inc.
The total backbone costs for this project are identified at $92,658,798. These costs include contingencies at $6,133,340 or approximately 7.1% of total hard costs. Development has commenced as of the effective date of valuation, as the developer has completed $76,894,393 in costs, or approximately 83.0% of the total hard costs (including contingencies). The remaining costs are identified at $15,764,405.
SHORE VISTA OVERCROSSING
The development of this project includes allocation of the over crossing at Shore Vista Way. Total costs are identified at $22,101,730. These costs are consistent with the engineers costs prepared by Wood Rodgers, dated November 7, 2023 as provided for review in preparation of this assignment.
It was identified that these improvements may start in the Summ er of 2025. With rising costs caused by i n f l a t i o n , t h e s e c o s t s a r e l i k e l y a l o w i n d i c a t o r t o t h e a c t u a l costs, especially based on the proposed completion date. As such, these costs are escalated at 8% due this element and total costs are projected at $23,869,868. This escalation is consistent with the rising costs. Original estimates in 2016 were noted at $11,805,277. The 2023 costs prepared by Wood Rodgers were identified at $22,006,078. The difference between the 2016 costs and the 2023 costs are noted at 86.4%, which equates to 8.1% per annum.
In addition, while not included in these costs, based upon revi ew of the Third Amendment to the Development Agreement for Gree nbriar (P11-093), performance bon ds are included in the costs and established at 2.5% of the total project cost, or $596,747. A s such, total costs for the Shore Vista Overcrossing are identified at $24,466,615. As part of the Third Amendment, the City of Sacramento will reimburse costs identified at $6,112,239. Based on the allocation of costs, net costs to the developer are identified at $18,354,376. Lastly, the developer has completed $885,946 in costs for this component, and remaining costs are identified at $17,468,430.
ITEM TOTAL COSTS COSTS INCURRED REMAINING COSTS % INCURRED GRADING AND EARTHWORK $9,932,446 $9,690,000 $242,446 97.6% SEWER $4,694,743 $4,667,786 $26,957 99.4%
DRAINAGE $12,024,770 $11,993,625 $31,145 99.7%
WATER $10,252,345 $8,320,123 $1,932,222 81.2%
CONCRETE/ROADWAY $9,986,512 $8,696,375 $1,290,137 87.1% LANDSCAPING $3,344,746 $342,452 $3,002,294 10.2%
WALLS AND FENCING $2,031,067 $1,206,737 $824,330 59.4%
DRY UTILITIES $6,755,523 $6,316,502 $439,021 93.5%
DEVELOPMENT (SOFT COSTS) $3,652,513 $3,070,503 $582,010 84.1% DEVELOPMENT FEES $1,651,139 $1,202,903 $448,236 72.9%
BUILDERS FEES $16,614,317 $16,583,817 $30,500 99.8%
PROJECT (SOFT COSTS) $4,484,000 $3,407,974 $1,076,026 76.0% PERFORMANCE BONDS $1,101,337 $1,395,596 -$294,259 126.7% SUB-TOTAL $86,525,458 $76,894,393 $9,631,065 88.9%
Hard Cost Contingency $6,133,340 $0 $6,133,340 0.0%
TOTAL BACKBONE COSTS $92,658,798 $76,894,393 $15,764,405 83.0%
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AMENITIES
In addition, this project includes public amenities which are being constructed concurrent with backbone improvements. They include costs for the neighborhood and community parks. These costs are allocated as follows.
The total remaining costs for project amenities are identified at $4,033,037.
INTRACT IMPROVEMENTS
Intract improvements reflect the overall costs to complete the interior subdivision improvements for each village. Budgets were provided for these costs and the followi ng table summarizes the total costs allocated to intract improvements. These budgets are as follows.
Overall, the total remaining site development costs for this project are identified as follows.
ITEM TOTAL COSTS COSTS INCURRED REMAINING COSTS % INCURRED NEIGHBORHOOD PARK $1,152,612 $176,732 $975,880 15.3%
COMMUNITY PARK $883,209 $159,165 $724,044 18.0%
COMMUNITY PARK $2,502,770 $169,657 $2,333,113 6.8%
SUB-TOTAL $4,538,591 $505,554 $4,033,037 11.1%
MINIMUM TOTAL COSTS % REMAINING
VILLAGE # OF LOTS LOT SIZE (SF) TOTAL COSTS COSTS/LOT INCURRED INCURR ED COSTS Village 1 (Shor) 104 41' x 68' (2,788 SF) $6,068,141 $58,348 $3,126, 682 51.5% $2,941,459 Village 2 (Shor) 89 41' x 68' (2,788 SF) $3,625,063 $40,731 $155,664 4.3% $3,469,399 Village 3 (Watersyde) 11 50' x 80' (4,000 SF) $76,725 $6,975 $32,881 42.9% $43,844 Village 4 (Lakelet) 68 41' x 90' (3,690 SF) $3,458,418 $50,859 $706, 507 20.4% $2,751,911 Village 5 (Lakelet) 61 41' x 90' (3,690 SF) $3,588,864 $58,834 $3,52 5,637 98.2% $63,227 Village 6 (Watersyde) 54 50' x 80' (4,000 SF) $3,297,402 $61,063 $3, 171,823 96.2% $125,579 Village 7 (Crestvue) 26 55' x 85' (4,675 SF) $173,970 $6,691 $69,292 39.8% $104,678 Village 8 (Watersyde) 88 50' x 80' (4,000 SF) $3,267,986 $37,136 $46 3,300 14.2% $2,804,686 Village 9 (Crestvue) 53 55' x 85' (4,675 SF) $2,454,795 $46,317 $259 ,614 10.6% $2,195,181 Village 10 (Crestvue) 59 55' x 85' (4,675 SF) $3,134,860 $53,133 $3, 004,083 95.8% $130,777 Village 11 (Lakelet) 44 41' x 90' (3,690 SF) $4,637,875 $105,406 $14 1,585 3.1% $4,496,290 Village 12 (Bleau) 60 50' x 100' (5,000 SF) $3,381,924 $56,365 $2,35 4,290 69.6% $1,027,634 Village 13 (Bleau) 50 50' x 100' (5,000 SF) $2,056,957 $41,139 $228, 827 11.1% $1,828,130 Village 14 (Wavmor) 54 45' x 100' (4,500 SF) $2,519,053 $46,649 $267 ,871 10.6% $2,251,182 Village 15 (Wavmor) 31 45' x 100' (4,500 SF) $1,502,557 $48,470 $73, 159 4.9% $1,429,398 Village 16 (Wavmor) 34 45' x 100' (4,500 SF) $1,584,091 $46,591 $75, 639 4.8% $1,508,452 Village 17 (Wavmor) 44 45' x 100' (4,500 SF) $4,263,019 $96,887 $3,1 85,236 74.7% $1,077,783 Village 18 (Drifton) 59 55' x 100' (5,500 SF) $5,555,720 $94,165 $4, 098,410 73.8% $1,457,310 Village 19 (Drifton) 49 55' x 100' (5,500 SF) $2,299,999 $46,939 $27 5,224 12.0% $2,024,775 Village 14/20 (14/20) 139 41' x 90' (3,690 SF) $9,774,012 $70,317 $5 ,413,332 0.0% $4,360,680 Intract Contingency $240,757 0.0% $240,757
SUB-TOTAL 1,177 $66,962,188 $30,629,056 45.7% $36,333,132
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T h e r e m a in i n g s i t e d e v e l op m e n t c o s t s f o r t h i s p r o j e c t , a s o f t he effective date of valuation equate to $74,379,780.
PERMITS AND FEES
The developer of this project provided an overall allocation of permits and fees for this project. While these fees reflect those payable after the completion of all site improvements, or finished lots, they are meaningful in deriving potential value for this project though direct comparison with comparable sales, as well as from a residual methodology. These fees are summarized below as provided by the developer dated February 29, 2024. It is clearly noted that these fees reflect the net permits and fees after credits and are the most recent fees and permits provided for review in preparation of this assignment.
The average permits and fees project are $29,209 per unit. The re are no school fees for the lots in the Phase 2 portion of this project as they have been paid by the d eveloper. Village 14/20 was identified for development prior to the commitment with the school district fo r fees and include additional fees at $18,916 per unit. These fees are lower than that of other new home communities throughout the region which shows permits and fees in excess of $65,000 per unit. As noted, these fees are net of credits ranging from $11,053 to $12,370 per unit. These credits are comprised as follows.
ITEM TOTAL CREDIT
Water Fee Credit ($3,501)
Park Fee Credit ($3,893) to ($4,580)
SRCSD Fee Credit ($1,296)
Community Center Fee Credit ($676)
Transit Fee Credit ($832)
Overwidth Fee Credit ($855) to ($1,485)
TOTAL CREDITS ($11,053) to ($12,370)
ITEM TOTAL COSTS COSTS INCURRED REMAINING COSTS % INCURRED Entitlement Costs $4,663,939 $3,883,163 $780,776 83.3% Backbone Costs $92,658,798 $76,894,393 $15,764,405 83.0% Shore Vista Overcrossing $18,354,376 $885,946 $17,468,430 4.8% Amenities $4,538,591 $505,554 $4,033,037 11.1%
In-Tract Costs $66,962,188 $30,629,056 $36,333,132 45.7% TOTALS $187,177,892 $112,798,112 $74,379,780 60.3%
PROJECT Shor Lakelet Watersyde Wavmor Crestvue Bleau Drifton V14/20 DIMENSIONS 41' x 68' 41' x 90' 50' x 80' 45' x 100' 55' x 85' 50' x 100' 55' x 100' 41' x 90' MIN. LOT SIZE (SF) 2,788 SF 3,690 SF 4,000 SF 4,500 SF 4,675 SF 5,000 SF 5,500 SF 3,690 SF # LOTS 193 173 153 163 138 110 108 139
City Impact Fees/Lot $19,136 $19,851 $21,038 $20,565 $20,776 $21,397 $22,123 $17,298 Greenbriar Fees $3,800 $3,800 $3,800 $3,800 $3,800 $3,800 $3,800 $3,800 Agency Fees $13,510 $14,494 $15,526 $15,431 $15,675 $16,297 $17,085 $13,374 School Fees $0 $0 $0 $0 $0 $0 $0 $18,916
Total Fees $36,446 $38,145 $40,364 $39,796 $40,251 $41,494 $43,008 $53,388 Less Credits ($11,874) ($11,992) ($12,190) ($12,111) ($12,146) ($12,249) ($12,370) ($11,053) Total Fees Per Lot $24,572 $26,153 $28,174 $27,685 $28,105 $29,245 $30,638 $42,335
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Soil Conditions
There was no soils report provided for review in preparation of this assignment. The subject property is located in an area formerly utilized for farm/grazing land. The opinions of value presented for the subject p r o p e r t y a s s u m e t h a t t h e s o i l s a r e c a p a b l e o f s u p p o r t i n g t h e e xisting improvements and proposed i m p r o v e m e n t s f o r t h e s u b j e c t p r o p e r t y . P l e a s e r e f e r t o t h e a s sumptions and limiting conditions for further documentation.
Nuisances and Hazards
There was no Environmental Site Assessment provided for review i n p r e p a r a t i o n o f t h i s a s s i g n m e n t .
Inspection of this site did not reveal any potential contaminants. In the absence of any environmental site assessments, the opinions of value for the subject property assume that there are no surface or sub- surface contaminants impacting the subject property. It is noted that the appraiser is not a recognized expert in this field. Please refer to the assumptions and limiting conditions for further documentation.
In addition, potential noise contours were identified based on the overall proximity to the Sacramento International Airport. The Sacra mento County Airport System has established noise abatement procedures designed to minimize aircraft noise exposure in the community. A primary emphasis of these procedures is to minimize aircraft noise during the nighttime h ours (9:45 PM to 7:45 AM) when people a r e m o r e s e n s i t i v e t o a i r c r a f t e x p o s u r e . T h e S a c r a m e n t o C o u n t y A i r p o r t S y s t e m a l s o h a s l e t t e r s o f agreement with several units of the United States military designed to limit repetitive training activity to the daytime hours and up to one hour per aircraft.
The subject property does not include any significant added noi se based on the proximity to the airport as these areas are closer in proximity to the runways. These elements are noted as follows.
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Easements, Encroachments & Adverse Conditions
A preliminary title report prepared by First American Title Company dated June 14, 2024 was provided for review in preparation of this assignment. This document reveal ed 39 exceptions to title, none of which have an adverse impact on the subject property. The following table summarizes these exceptions.
SUBJECT
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EXCEPTION ITEM COMMENTS
1 & 1A Intentionally Deleted No Impact
2 Assessment Liens Disclosure of liens for SAFCA CAP Asmt #2 & SAFCA Natomas Basin. Payments in Taxes
2A Special Tax Lien Notice of Special Taxes for proposed community facilities district IA-2
3 Special Tax Lien Notice of Special Tax Lien for Sacramento Services Community Facilities District
No. 2018-5. See Property Taxes Section
4 Special Tax Lien Notice of Special Tax Lien for Greenbriar Community Facilities District No. 2018-3.
Improvement Area No. 1. This was established prior to
Separation of Improvement Area 1 and the
Subject Property. No Impact.
5 Special Tax Lien Notice of Special Tax Lien for Greenbriar Community Facilities District No. 2018-3.
Improvement Area No. 2. This document was
Amended December 17, 2021.
6 Taxes and Assessments Taxes for RD#1000
7 Lien of Supplemental Taxes General Disclosure
8 Unpaid Utilities General Disclosure
9 Deleted No Impact.
10 Easement for Public Highway or
Roads to Sacramento County
Identified on TM to be abandoned and
Re-Dedicated
11 Easement for irriga tion and/or drainage
and incidental purposes
Older exception in favor of RD#1000. No Impact.
12 Relinquishment of Abutters Rights
for ingress and egress to or from
street, highway, or freeway
Parcel D (Open Space) No Impact.
13 Relinquishment of Abutters Rights
for ingress and egress to or from
street, highway, or freeway
Parcels D and E (Open Space). No Impact.
14 Easement for public u tility facilities and
incidental purposes to the
State of California
Impacts Parcels 4, 5, and E. Easement was
Quitclaimed to RD#1000 in 1983. No Impact.
15 Relinquishment of Abutters Rights
for ingress and egress to or from
street, highway, or freeway
Parcels 4, 5, and E (Open Space). No Impact.
16 Deleted No Impact.
17 Easements for irrigation facilities
and incidental purposes
Impacts Parcels D and E.
No Impact.
18 Relinquishment of Abutters Rights
for ingress and egress to or from
street, highway, or freeway
Parcels D and E (Open Space). No Impact.
19 Relinquishment of Abutters Rights
for ingress and egress to or from
street, highway, or freeway
Parcels D and E (Open Space). No Impact.
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EXCEPTION ITEM COMMENTS
20 Memorandum of Agreement
For Schools
Most Recent Recorded August 31,
2021
First Document in 2006 showing
Recorded funding agreement through
Mutual Benefit Agreement to Rio Linda Union
School District. Rights assigned to North Natomas
Sac Region LLC in 2009. Restated in 2020 to show Twin
Rivers Unified School District.
21 Development Agreement Recorded in August 2017, modified January 2018, May 2018. Provides framework and approvals
of project entitlements. This agreement limits the
CITY’s
Right to revoke, terminate, change, or amend the
Project
Entitlements, or to require the LANDOWNER to comply
With any subsequent rules that conflict with or
Impede Development of the property for the Project,
Except as provided in this agreement. Document
Restated on August 31, 2021 to reflect current owner.
22 Intentionally Deleted N/A
23 Intentionally Deleted N/A
24 Easement for Facility
and Incidental Purposes
To RD#1000
Affects Parcels D and E (Open Space).
No impact.
25 Intentionally Deleted N/A
26 Grant of Water Well, Water
Conveyance Facilities and
Access Easements
Affects Parcel E (Open Space).
No Impact.
27 Intentionally Deleted N/A
28 Easement for overhead facilities
and incidental purposes to SMUD
Affects Parcels D and E (Open Space).
No Impact.
29 Easement for Sanitary Sewer and
Incidental purposes
Easement and will remain per TM.
Typical Utility Easement
30 Easement for water line and
Incidental purposes
Easement and will remain per TM.
Typical Utility Easement
31 Agreement to construct and
maintain private recreational
facilities with the
City of Sacramento
Agreement to construct private improvements
to satisfy park requirement.
32 Avigation Easement Recorded
January 28, 2020
No Impact. Easement granted for airspace
And noise above 100 feet
33 Memorandum of Agreement with
Natomas Central Mutual Water
Company
Ties to Item 26. No Impact.
34 Agreement for construction of
Drainage Improvements with
the City of Sacramento
No Impact.
35 Easement for utility,
ingress and egress to SMUD
Typical Utility Easement.
No Impact.
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EXCEPTION ITEM COMMENTS
35a Easement for public utility
and incidental purposes
As Recorded on Final Map.
35b Easement for Road Irrevocable
Offer of Dedication and
Incidental purposes
Affects Parcels 14, 16 through 21 and H
as recorded on Final Map.
35c Regional Transit Irrevocable
Offer of Dedication and
Incidental purposes
Affects Parcels 14, 20, 21, E, F, and H
as recorded on Final Map.
35d Easement for Drainage and
Incidental Purposes
Affects Parcels 3, 8, 9, 11, 12, 13, 14, 16,
18, 19 and D as recorded on Final Map.
35e Easement for Sanitary Sewer and
Incidental Purposes
Affects Parcels 3, 8, 9, 11, 12, 14, 16,
18, and 21 as recorded on Final Map.
35f Intentionally Deleted No Impact.
35g Disclosures of Filed or Recorded
Map
-Parcels A, B, and C granted IOD in Fee Title to
the City of Sacramento for Park Purposes.
-Parcels D and E granted IOD in Fee Title to the
City of Sacramento for Open Space Parcels.
-Parcels F, G, and H granted IOD to the City of Sacramento As Detention and Water Quality Basins/Lakes.
-Parcel I is reserved and is to be granted by
separate document to the local school district
as a community school.
35h Intentionally Deleted No Impact.
35I-PP Ties to Recordation’s of Final Maps No Impact.
36 Rights of the public in and to that
portion of land lying within any road,
street, alley, or highway.
General Disclosure.
37 Water Rights General Disclosure
38 Rights of Parties in Possession General Disclosure
39 Relates to Greenbriar Phase 2, LLC
General Disclosure
U p o n r e v i e w o f t h i s d o c u m e n t a n d t h e v a r i o u s e x c e p t i o n s , t h e p roject is subject to typical utility easements. The project includes a recorded development agreement as of the effective date of valuation.
In addition, the third amendment to the Development Agreement was approved after the effective date of this preliminary title report. This is discussed later in t his report. There were no adverse easements, encroachments, or adverse conditions in connection with the subject property.
Flood Zone
A c c o r d i n g t o t h e F e d e r a l E m e r g e n c y M a n a g e m e n t A g e n c y F l o o d I n s urance Rate Maps (FIRM), Community-Panel Numbers 06067C-0045J, with an effective date of June 16, 2015, the subject property is identified in Zone A99. In this zone, the base flood elevati on is the water-surface elevation of the 1% annual chance flood. The 1% annual chance flood (100-year flo od), also known as the base flood, is the flood that has a 1% chance of being equaled or exceeded in any given year. A copy of this map is identified as follows.
Smith & Associates, Inc.
Currently, the subject property lies within Zone A99, which requires flood insurance. Efforts are currently underway through various levee projects to provide Natomas (including the subject property) at least 200- year level of flood protection.
In addition, on June 21, 2016, the Sacramento City Council passed a resolution accepting the Sacramento Area Flood Control Agency’s (SAFCA) Urban Level of Flood Protec tion (ULOP) Plan, prepared pursuant to Senate Bill 5 (SB 5) and related legislation. The ULOP Plan identifies flood improvement projects, cost estimates, anticipated funding sources, and a schedule to compl ete them by 2025, which would result in 200-year flood protection for the city.
The purpose of the ULOP annual report it to provide an addition al piece of the substantial evidence necessary to support the “adequate progress finding” in the approval of new development within a flood hazard zone. When considering development within a flood hazard zone, the City has relied on the 2016 ULOP Plan and the subsequent 2017 through 2023 ULOP annual reports as substantial pieces of evidence that SAFCA has made annual progress on the construction of a 200-year flood protection system.
The 2024 annual report was subsequently approved, but after the effective date of valuation. In order for the City of continue to rely on making the “adequate progre ss finding”, the California Government Code 65007(a)(5) further requires the city of annually report to the Central Valley Flood Protection Board on its efforts in working towards completion of the 200-year flood protection system. Accordingly, SAFCA staff and consultants prepared the 2024 ULOP: Adequate Progress Annual Report for the City to fulfill Government code requirements which document the following.
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The total project scope, schedul e, and cost of the floor protec tion system have been developed to meet 200-year flood protection.
T h a t 9 0 % o f t h e r e q u i r e d r e v e n u e s s c h e d u l e d t o b e r e c e i v e d b y that year have been appropriated and is being expended;
Critical features of the Floor Protection System are under cons truction and progressing based upon the actual expenditures of the construction budget; and The City has not been responsible for a significant delay in the completion of the system.
A s o f t h e d a t e o f t h i s r e p o r t , a l l p r o j e c t s a r e c u r r e n t . A s t he December 31, 2025 deadline for ULOP attainment draws near, it is evident that new delays to the rem aining construction activities could constrain attainment for affected portions. It appears that con struction is on track to be complete or substantially complete by end of Dec. 31, 2025 (the deadline) w ith the exception of 3 projects. These include the following.
Reaches F&G Sankey Rd to NEMDC Pumping Station. Construction underway by 2025. Magpie Creek. Construction will begin after 2025
Up to 1.7 Foot Levee and Floodwall Raise, Seepage berm and Pump S t a t i o n Improvements. Complete with 5 years.
Further, some projects have not received full funding yet. Since they will not be 100% complete, and full funding is laid out as an assumption in the ULOP, the City may have to ask for an extension from CVFPB. There is a chance City Council would not seek an exten sion given the potential financial liability from flood damage. Should such a delay arise, the affected jur isdiction or jurisdictions would need to choose whether to temporarily suspend development approvals as required by ULOP legislation, or to seek a legislative extension that may entail the assumption of some liability for future flood damage to any developments approved without ULOP.
As such, the appraisal report is prepared in conjunction with the following extraordinary assumptions.
This appraisal assumes completion of the remaining flood protection projects, as stated i n t h e U L O P r e p o r t ( i n c l u d e d i n t h e a d d e n d a o f t h i s r e p o r t ) , w ithin the timelines stipulated within the ULOP report and that no suspension of dev elopment approvals will be necessary. Alternatively, if deadlines are not met, th e City will seek and be granted legislative extensions b y the Central Valley Flood Prot ection Board and development will continue for the subject project.
As of the effective date of valuation, this element is not slow ing development in the immediate or extended market area of the subject property.
Seismic Hazard
The subject is not located within the Fault-Rupture Hazard Zone (formerly referred to as an Alquist-Priolo Special Study Zone) as defined by Special Publication 42 of the California Department of Conservation, Division of Mines and Geology. The subject is not within a special study area.
Fire Hazard
The subject is not located within a Medium, High, or Very High Fire Hazard Severity Zone. High severity zones within Sacramento County are identified in the following map.
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Zoning/Entitlements
The subject property is currently vested for development of the proposed uses identified in this report.
This project identified as P11-083 was approved by the City of Sacramento in 2017 including the following:
1) Certification of the Environmental Impact Report including adop tion of the mitigation monitoring and reporting program;
2) Approval of the Development Agreement;
3) Adoption of the 2017 Greenbriar Financing plan;
4) Resolution Authorizing Building Permits and Multi-Unit Dwellings pursuant to Sacramento City Code Floodplain Management Regulations;
5) Directing the Greenbriar Development Impact Fees to be allocated to the North Natomas Regional Park;
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6) Amending the General Plan Land Use and Urban Form Diagram to ch ange land use designations for various parcels consistent with the development project; 7) Amending the zoning of the project;
8) Amending the Planned Unit Development Guidelines;
9) Approving the Mixed-Income Housing Strategy;
10) Approving the tentative map and project design with conditions of approval.
This project is fully vested for development from both a planni ng and environmental viewpoint. The environmental process for Greenbriar began in 2006 and involved t h e p r e p a r a t i o n o f t h e f o l l o w i n g documents that are relevant to the proposed amendments being considered for the project:
Draft EIR (DEIR) for the Greenbriar Development Project (Volumes I-III), July 2006 Recirculated Draft EIR (RDEIR) for the Greenbriar Development Project (Air Quality; Hydrology, Drainage and Water Quality), November 2006
Second Recirculated Draft EIR (SRDEIR) for the Greenbriar Development Project (Transportation and Circulation), April 2007
Final EIR (FEIR) for the Greenbriar Development Project, August 2007
On September 19, 2007, the Sacramento Local Agency Formation Commission (LAFCo) certified the Final EIR and approved the Sphere of Influence Amendment for the proj ect. In January 2008, the City of Sacramento certified the EIR and approved the Greenbriar Develo pment Project (City of Sacramento 2008). After the City’s approval of the project, LAFCo approved annexation of the proposed project to the City of Sacramento service area boundary in June 2008 (LAFCo 2008).
Applicable Agency Permits secured for this project include the following:
1) California Department of Fish & Wildlife Final Streambed Alt eration Agreement No. 1600- 2013-0224-R2
2) Central Valley Regional Water Control Board Clean Water Act Section 401 permit (WDID #5A35CR00587)
3) Department of the Army Se ction 404 Permit # SPK-2005-00572 4) United States Department of the Interior Fish & Wildlife Ser vice Biological Opinion 5) CDFW Incidental T ake Permit. 2081-2013-059-02
According to Cheryle Hodge with the City of Sacramento Planning D e p a r t m e n t , t h e s u b j e c t p r o j e c t i s conforming with all applicable environmental mitigation. Furthermore, the subject property is a stand- alone project and not subject to the Natomas Basin HCP Fees.
Currently, this project includes a large-lot, final map recorded identified as follows.
Smith & Associates, Inc.
Zoning for this project is generally identified in the following classifications, R-1 (PUD), R-1A (PUD) and A- OS (PUD) as they pertain to the subject properties. The zoning map for this project shows other zoning districts but are not applicable for the subject. Applicable districts for this project are defined as follows.
R-1: The purpose of the R-1 zone is to accommodate low-density residential uses composed of single-unit detached residences and duplex dwellings on corner lots. This zone may also include recreational, religious, and educational facilities as the basic elements of a balanced neighborhood. These areas should be clearly defined and without encroachment by uses not perform ing a neighborhood function.
Applicable setbacks and requirements for this district is noted as follows.
ITEM TOTAL
Height 35 Feet
Coverage 40% of Site Area (Max)
Lot Size (SF) 5,200 SF (Min)
Width 52 Feet (Min)
Depth 100-160 Feet
Based on review of the zoning map as well as the overall project map, the R-1 zoning is only applicable for Villages 18 and 19 with minimum lot sizes at 5,500 SF.
R-1A: The purpose of the R-1A zone is to permit single-unit or duplex dwellings, whether attached or detached, at a higher density than is permitted in the R-1 zone. Dwellings that have no interior side yards, such as townhouses and rowhouses, are allowed. Applicable setbacks and requirements for this district is noted as follows.
Smith & Associates, Inc.
ITEM TOTAL
Height 35 Feet
Coverage 50% of Site Area (Max)
Lot Size (SF) 2,900 SF (Min)
Width 25 Feet (Min)
Depth 80-160 Feet
Based on review of the zoning map as well as the overall project map, the R-1A is applicable for Villages 1-17 with minimum lot sizes fro m 2,788 to 5,000 square feet. The Shor project identified in Villages 1 and 2 is below the minimum lot size threshold but approved consistent with the PUD identification of this project.
A-OS: The purpose of the A-OS zone is to ensure the long-term preserv ation of agricultural and open space land. This zone is intended to prevent the premature deve lop m e nt of lan d t o u rb an u se s. Th is district is assigned to the Neighborhood Park Sites (Parcels C, D, E), man-made lake (Parcels G, H, I), and to the open space / habitat buffer (Parcels S, T, U).
The General Plan identifies the residential components for Subu rban Neighborhood Medium Density (7- 17 du/ac), Waterways, and Parks and Recreation. Similar to th e overall zoning, the General Plan also identifies additional land uses are beyond the boundaries of th e d ist ric t , and /or are e x em p t from the facilities.
In addition, small-lot final maps have been recorded and summarized as follows.
The proposed development of this project is consistent with the overall zoning and General Plan. This project includes an affordable housing component identified as the Mixed-Income Housing Strategy.
Accordingly, the total project is proposed for 2,425 market rate housing units and 339 market rate rental units. The Greenbriar Mixed-Income Housing Strategy provides f or the development of 189 affordable units for seniors (APN 201-0300-180). With the development of this project, designated for residents whose income does not exceed 80% of the AMI for Sacramento County, no further affordable housing is required. The developer of this project receives a fee credit for the construction of this project relative to the 2,425 market rate units identified for the project. The only caveat is that the developer obtains a building permit for this project prior to issuance of 65% of the building permits for the 2,425 market rate units. This equates to 1,576 permits. H o w e v e r , s i n c e t h e b u i l d i n g p e r m i t h a s b e e n i s s u e d f o r t h i s component, no restrictions are applicable to the subject property.
Greenbriar Phase 2, Village 10 Recorded 3-11-2024, Book 454, Pag e 3 Greenbriar Phase 1, Village 14A Recorded 5-6-2024, Book 455, Pag e 2 Greenbriar Phase 2, Village 18 Recorded 10-14-2022, Book 443, Pa ge 1
REFERENCEFINAL MAP
Greenbriar Phase 2, Village 5 Recorded 8-1-2022, Book 440, Page 2 Greenbriar Phase 2, Village 17 Recorded 10-14-2022, Book 442, Pa ge 16 Greenbriar Phase 2, Village 1A Recorded 10-14-2022, Book 442, Pa ge 15 Recorded 8-1-2022, Book 440, Page 1Greenbriar Phase 2, Village South Greenbriar Phase 2, Village 6 Recorded 3-15-2024, Book 454, Page 4
Smith & Associates, Inc.
On September 24, 2024, a Third Amendment to the Development Agr eement for Greenbriar (P-11-93) was established between the project owner and the City of Sacra mento. This was established as part of the “special condition” which requires that the landowner const r u c t t h e M e i s t e r W a y o v e r p a s s , n o w known as the “Shore Vista” overpass. The project owner and the city agreed to the following.
Transportation Development Impact Fees: The Transportation Development Impact Fees (TDIF) apply to new development with the City of Sacramento, including the project, and are used to support funding for transportation improvements benefitting new development in the C i t y . T h e S h o r e V i s t a O v e r p a s s (including the connection to East Commerce Way) (“SVO”) is iden tified in the City’s TDIF program. As part of this agreement, the Project will be constructing the SV O and related improvements. When the Project has completed the construction of the SVO and the approved Phase 1 and 2 tentative Subdivision Maps, the City will consider that the project has satisfied its TDIF obligation in-kind.
Amendment to the Agreement: Meister Way Overpass and Meister Way/East Commerce Way Intersection improvements is amended to read in its entirety as follows:
Smith & Associates, Inc.
Smith & Associates, Inc.
The overall costs for this facility are included in the total site development costs for this project. This includes an additional allowance for a performance bond with to tal reimbursement from the City of Sacramento at completion of the project.
Smith & Associates, Inc.
Greenbriar Community Facilities District No. 2018-03 Improvement Area #2
The total eligible facilities for this project are identified at $49,178,561. These facilities are summarized as follows.
Development of the proposed land uses described in this report reflect a legal, permissible use under the current zoning, general plan, and all entitlements are secured for development.
Taxes and Assessments
The subject properties fall wi thin Tax rate area 03-350. Base tax rates for this district (2024-2025) as provided from the Sacramento County Tax Collectors office are allocated as follows.
ITEM TOTALS
Ad Valorem Taxes 1.0%
Grant Jt. High GOB 0.011%
Los Rios College GO Bond 0.02%
Twin Rivers Unif. GOB 0.0438%
Twin Rivers Elem. SFID 0.0338%
Twin Rivers Elem. GOB 0.0352%
TOTAL TAX RATE 1.1438%
Smith & Associates, Inc.
The base tax rate is 1.1438%. As noted, the subject property is located within several districts. These include the following direct levies (per lot) as identified from the current property taxes:
--(0168) Sacramento Area F lood Control Agency - This special benefit assessment finances the Sacramento Area Flood Control Agency's regional fl ood control planning efforts to address the serious flood risk facing this community. Funds are used to conduct studies in coordination with the Federal and State government l eading to constructing flood control projects to reduc e the flood risk. Assessments ar e levied on properties within the Agency's jurisdictional boundaries that benefit from improved flood protection on the American and Sacramento Rivers, and their tributaries. Assessments are based on relative land value, area of parcel, and relative benefit derived from flood control. Current charges are identified at $10.90 per annum.
--(0169) Natomas Basin Local Assessment District - This levy is a Sacramento Area Flood Control Agency Act (Cal. Water Code App., Chapter 130) assessment and is subject to accelerated judicial foreclosure. This special capital assessme nt provides additional local funding to cover cost increases in the ongoing Natomas Levee Im provement Project (Project), initiated following creation of the Consolidated Cap ital Assessment District.
Changes in urban levee design standards have required significa nt modifications to the project and increased the estima ted total project cost. Assessm ents are based on property related benefits relative to depth of flooding, and da mage to structures and land. Current charges are identified at $1.50 per annum.
--(0198) SAFCA Consolidated Capital Assessment #2 - The Sacramento Area Flood Control Agency (SAFCA) formed this district in 2016 as authorized by th e SAFCA Act, Water Code Appendix Section 130-1 et seq. and following a Proposition 218 protest procedure election and is subject to accelerated judicial foreclosure. This Special Capital Assessment finances repayment of bonds issued to construct a series of levee and other flood control improvements in the original Consolidated Capital Assessment Di strict as well as a series of projects necessary to provide 100-year flood protection for developed areas in Sacramento's major floodplains as quickly as possible. In addit ion, annual assessments fund the local share of flood risk reduction projects on the lo wer American River and S a c r a m e n t o R i v e r a n d t h e i r t r i b u t a r i e s . A s s e s s m e n t s a r e b a s e d on property-related benefits related to depth of flooding, and damage to structures and land. Current charges are identified at $2.00 per annum.
--(0659) Sacramento Addition al Library Service Tax - Revenue generated by this assessment provides for increased City Library services which w ill keep libraries open more hours, restore book and library material budgets and updat e technology in neighborhood, community, and regional libraries. Current charges are fixed at $1.82 per parcel, per annum. It is not applicable to public use parcels.
--(1111) Sac Service CFD 2018-05 Zone #1 – This district was formed under the Mello- Roos Community Facilities Act of 1982. This district provides funding for the maintenance of landscaping, drainage, and park facilities within the Northlake Development. Current charges are identified at 278.04 per parcel, per annum.
Smith & Associates, Inc.
--(0673) N. Natomas TMA CFD - North Natomas Transportation Management Association Community Facilities District establishes an annual assessment, to finance transportation and air quality mitigation services used to reduce travel emiss ions. Current charges are based on land use designated by the Sacramento County Assessor. Annual payments are $88.66 per parcel.
--(0738) Reclamation District No. 1000 - Reclamation District No. 1000 has asked Sacramento County to place the district’s benefit assessment on the secured tax bills of the landowners in the district. The assessment charges are for the annual operation and maintenance of the levees and drainage system. Current charges are based on land use designated by the Sacramento County Assessor. Annual payments are $10.00 per parcel.
--(0739) RD 1000 Stormwater Service Fee – Reclamation District 1000 assessment finances the Sacramento Area Flood Control Agency's regional fl ood control planning efforts to address the serious flood risk facing this community. Funds the maintenance of perimeter levees systems; an interior canal system to collect t he stormwater runoff and agricultural drainage from within the Natomas Basin; and operat ing pump stations to safely discharge interior stormwater and agricultural drainage out of the Natomas Basin Assessments are levied on propert ies within the Agency's jurisd ictional boundaries that benefit from improved flood protection on the American and Sacr amento Rivers, and their tributaries. Assessments are based on relative land valu e , a r e a o f p a r c e l , a n d relative benefit derived from flood control. Current charges ar e identified at $3.75, per annum.
Overall, anticipated Direct Levies are noted as follows.
Direct levies for the finished lots are identified at $396.67, per annum, per parcel.
DIRECT LEVIES TOTALS
0168/Sac Area Flood Control $10.90
0169/Natomas Basin $1.50
0198/SAFCA $2.00
0659/Sac. Additional Library $1.82
1111/Sac. Service Zone #1 $278.04
0673/N. Natomas TMA CFD $88.66
0738/RD #1000 $10.00
0739/RD #1000 Stormwater $3.75
TOTALS $396.67
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Overlapping Debt
In addition, the outstanding debt was provided for all of the p roperties in this analysis as compiled from California Municipal Statistics, Inc. This was provided for all of the properties including General Obligation B o n d s w h i c h a r e p a r t o f t h e B a s e T a x R a t e n o t e d a b o v e . T h e s e elements, excluding the General Obligation Bonds, which are paid as part of the base tax rate are identified as follows.
The total outstanding debt on these properties is identified at #1,270,609. This total debt is nominal relative to the overall value for the property.
The subject property is proposed for an additional district, which is the subject of this report.
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CFD-2018-03: Greenbriar Community Facilities District No 2018-03, Improvement Area #2
This district comprises the subject property. The maximum annual payments are identified as follows.
These charges are subject to a 2% annual increase in payments. In addition, they are based on FY 2021- 2022. Payments for the 2024-2025 tax year are identified as follows. It is noted that these payments are trended upward at 2% per annum.
T h e s e p a y m e n t s a r e c u r re n t f o r t h e s u b j e c t p r o p e rt y a n d r e f l e c t 2% per annum increases from those identified for FY 2021-2022. The CFD Payments range from $1,792.38 to $3,550.80 per annum.
HOA
The 1,038 lots identified on Phase 2 of this project include HO A dues at $90 per month. HOA dues for V14/20 are projected at $83.50 per month.
PROJECT SHOR LAKELET WATERSYDE WAVMORE CRESTVIEW BLEAU DRIFTON V14/20 LOT SIZE 2,768 SF 3,690 SF 4,250 SF 4,500 SF 4,675 SF 5,000 SF 5,500 S F 3,690 SF CFD 2018-03 - 1A#2 $2,264.62 $2,578.74 $2,936.36 $2,828.12 $3,204.85 $3,256.85 $3,550.80 $1,792.38 Villages 1 & 2 4, 5 & 11 3, 6 & 8 14-17 7, 9 & 10 12 & 13 18 & 19 V14/2 0
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IMPROVEMENT DESCRIPTION
The subject project is proposed for the development of eight villages.
Current pricing for these projects, as of the effective date of valuation, is summarized as follows.
MINIMUM LAKE FRONT % OF
PROJECT DIMENSIONS LOT SIZE (SF) VILLAGE # LOTS LOTS TOTAL SHOR 41' x 68' 2,788 1 104 0 0%
41' x 68' 2,788 2 89 0 0%
TOTALS - SHOR - 2,788 SF (41' x 68') 193 0 0%
LAKELET 41' x 90' 3,690 4 68 0 0%
41' x 90' 3,690 5 61 0 0%
41' x 90' 3,690 11 44 0 0%
TOTALS - LAKELET - 3,690 SF (41' x 90') 173 0 0%
WATERSYDE 50' x 80' 4,000 3 11 7 64%
50' x 80' 4,000 6 54 14 26%
50' x 80' 4,000 8 88 7 8%
TOTALS - WATERSYDE - 4,000 (50' x 80') 153 28 18.3%
WAVMOR 45' x 100' 4,500 14 54 16 30%
45' x 100' 4,500 15 31 0 0%
45' x 100' 4,500 16 34 0 0%
45' x 100' 4,500 17 44 3 7%
TOTALS - WAVMORE - 4,500 SF (45' x 100') 163 19 11.7%
CRESTVUE 55' x 85' 4,675 7 26 0 0%
55' x 85' 4,675 9 53 5 9%
55' x 85' 4,675 10 59 10 17%
TOTALS - CRESTVUE - 4,675 SF (55' x 85') 138 15 10.9%
BLEAU 50' x 100' 5,000 12 60 14 23%
50' x 100' 5,000 13 50 26 52%
TOTALS - BLEAU - 5,000 SF (50' x 100') 110 40 36.4%
DRIFTON 55' x 100' 5,500 18 59 13 22%
55' x 100' 5,500 19 49 0 0%
TOTALS - DRIFTON - 5,500 SF (55' x 100') 108 13 12.0%
V14/20 PRODUCT LINE 41' x 90' 3,690 14/20 139 0 0%
TOTALS - V14/20 - 3,360 SF (41' x 90') 139 0 0.0%
PROJECT TOTALS 1,177 115 9.8%
MIN AVERAGE AVERAGE
PROJECT LOT SIZE (SF) BASE PRICE (NET) SIZE (SF) PRICE/SF Shor 2,768 SF $570,240 1,982 $288
Lakelet 3,690 SF $619,657 2,233 $277
Watersyde 4,000 SF $681,190 2,650 $257
Wavmor 4,500 SF $652,990 2,484 $263
Crestvue 4,675 SF $679,590 2,557 $266
Bleau 5,000 SF $751,823 2,923 $257
Drifton 5,500 SF $735,657 3,037 $242
V14/20 3,690 SF $528,740 1,640 $322
TOTALS 4,099 SF $643,455 2,387 $270
Smith & Associates, Inc.
As of the effective date of valuation, the developer has commenced construction of production homes.
Model homes are completed for the Shor, Crestvue, Lakelet, and Watersyde projects. The allocation of these model homes is as follows.
Lakelet – 3 Model Homes (APNs 201-1520-012..014)
Shor – 4 Model Homes (APNs 201-1520-001..004)
Watersyde – 5 Model Homes (APNs 201-1520-007..011)
Crestvue – 5 Model Homes (APNs 201-1530-001..005)
These lots were acquired in the first takedown of lots by Lennar Homes. In addition, 9 production homes have received their final inspection, whereas the remaining lot s i n t h e f i r s t t a k e d o w n , a s w e l l a s t h e second takedown have paid permits. Lastly, all but 12 lots in the third takedown have paid permits. The added value for the model homes, home with final permits, as well as the allocated permits and fees paid as of the effective date of valuation are considered in the Lennar Ownership section.
The next section of this report illustrates supply and demand characteristics for this property.
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PART 3 – MARKET ANALYSIS AND HIGHEST AND BEST USE
MARKET ANALYSIS
A market analysis is presented in conjunction with assignment. The depth of discussion is specific to the needs of the client and for the intended use. This element is provided for the regional and local housing market based on information provided from the California Associ at ion of R ealt ors, Me t rolist , an d T h e Gregory Group.
California Housing Market
According to the California Association of Realtors (C.A.R.), C alifornia home sales hit a seven-month low in August, as buyers held out despite interest rates that dippe d to the lowest level since spring. Closed escrow sales of existing, single-family detached homes in Calif ornia totaled a seasonally adjusted annualized rate of 262,050 in August, according to information collected by C.A.R. The statewide annualized sales figure represents what would be the total numb er of homes sold during 2024 if sales maintained the August pace throughout the year. It is adjusted t o a c c o u n t f o r s e a s o n a l f a c t o r s t h a t typically influence home sales.
August’s sales pace fell 6.3 percent from the 279,810 homes sol d in July and were up 2.8 percent from a year ago, when a revised 254,820 homes were sold on an annualiz ed basis. The sales pace has remained below the 300,000-threshold for 23 consecutive months, while ye ar-to-date home sales edged up 0.5 percent from the first eight months of 2023.
“Home price growth in California continued to moderate in Augus t as the market neared the end of the traditional home buying season,” said C.A.R. President Melanie Barker. “With the Federal Reserve signaling it will lower interest rates soon, mortgage rates are expected to ease well below their recent peaks. As such, housing affordability will improve in the fall, and buyers will benefit from lower costs of borrowing in the coming months.”
August’s statewide median price was essentially flat, inching u p 0.2 percent from $886,560 in July to $888,740 in August. California’s median home price was 3.4 perc ent higher than the revised $859,670 recorded in August 2023. The year-over-year gain was the 14th straight month of annual price increases, albeit the smallest since September 2023. Home prices could sof ten further in the coming months but should continue to register year-over-year growth for the rest of the year.
Sales in higher-priced market se gments continued to influence t he mix of sales, but the impact on the state-wide median price growth has been reduced in recent month s . W h i l e t h e s a l e s p a c e f o r t h e $ 1 million-and-higher price segment decelerated in August to 3.6 percent, sales in the sub-$500,000 market had a lackluster performance as well, dropping 9.0 percent belo w the year-ago level. Moderation in the median price growth could be observed in the coming months if the share of homes priced at or above $1 million continues to shrink in the fall.
“Despite a slightly better lending environment in recent weeks, closed home sales pulled back in August as buyers evaluated whether to wait for the Federal Reserve to cut rates before entering the market,” said C.A.R. Senior Vice President and Chief Economist Jordan Levine. “Pending sales, along with mortgage application trends, however, suggest that housing demand has be en slowly improving in the past few weeks. If mortgage rates remain at their current low or dip further in the coming weeks, home sales should rise steadily as we move toward the end of the year.”
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Other key points from C.A.R.’s August 2024 resale housing report include:
At the regional level, home sales in all major regions except for two were higher than their year-ago levels in August. Three out of the five regions in the state registered increases from a year ago, with the San Francisco Bay Area (4.8 percent) increasing the most. It was followed by the Central Coast (3.0 percent) and the Central Val ley (0.8 percent) regions.
The two regions in the state that fell behind last year’s sales level were the Far North (-
5.0 percent) and Southern California (-2.3 percent).
Twenty-six of the 53 counties tracked by C.A.R. recorded sales increased from a year ago, with 10 of them jumping more than 10 percent year-over-year. Yu ba (37.1 percent) posted the largest yearly sales gain, followed by Mendocino (25 .6 percent) and Glenn (25.0 percent). Twenty-seven cou nties experienced sales decreas es from last year, with 18 of them falling more than 10 percent year-over-year. Eight counties had sales drops of more than 20 percent, and three counties experienced sales decl ines of more than 30 percent. Trinity (-50.0 percent) recorded the biggest annual sales decline in August, followed by Mariposa (-45.0 percent) and Plumas (-34.8 percent).
At the regional level, all major regions except for one experie nced an increase in their median price from a year ago in August. The Central Coast posted the biggest price jump on a year-over-year basis, increasing 8.9 percent from last August. Far North (7.7 percent) was a close second, followed by Southern California (4.0 percent), and the Central Valley (3.1 percent). The San Francisco Bay Area (-1.6 percent) was the only region that recorded a price decline in August compared to a year ago, as six of the nine counties in that region experienced a price drop last month.
Home prices continued to grow on a year-over-year basis through out the state, with median sales price in 36 counties registering price increase fr om a year ago in August.
Trinity (36.6 percent) posted the biggest increase in price last month, followed by Plumas (32.9 percent) and Imperial (22. 0 percent). Sixteen counties re corded annual median price declines, with Santa Barbara dropping the most at 18.0 pe rcent, followed by Mariposa (-14.6 percent), and Amador (-12.0 percent).
The statewide unsold inventory index (UII), which measures the number of months needed to sell the supply of homes on the market at the current sales rate, increased both month-over-month and year-over-year. The index was 3.2 months in August, up from 2.9 months in July and up from 2.4 months in August 2023. Active li stings at the state level rose more than 39 percent from the year-ago level. It was the seventh straight month of annual gains in for-sale properties.
At the county level, the availability of homes for sale increas ed from the same month of last year in all but four counties in August. Alameda (124.4 percent) posted the biggest year-over-year jump, followed by Contra-Costa (96.9 percent) an d Stanislaus (63.9 percent). The only counties that recorded a decline from last y ear were Glenn (-27.9 percent), Kings (-25.5 percent), Trinity (-7.7 percent) and San Francisco (-6.1 percent).
New
active listings at the state level improved from a year ago for the eighth consecutive month, with seven of them recording double-digit increases. Des p i t e a d e c e l e r a t i n g growth rate in August, the increase in new listings at the tail end of the buying season is
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an encouraging sign that supply conditions in California will c ontinue to improve in the coming months. Thirty-eight of the 52 counties tracked by C.A.R. recorded an increase in new active listings from a year a go. Calaveras recorded the lar gest year-over-year increase at 91.8 percent, followed by Kern (48.8 percent) and D el Norte (42.1percent).
Thirteen counties marked declines in new active listings from a year ago, with Lassen (-
37.5 percent) dropping the most, followed by Siskiyou (-33.8 percent) and Amador (-25.5 percent).
The median number of days it took to sell a California single-f amily home was 22 days in August, up from a revised 17.5 days in August 2023.
C.A.R.’s statewide sales-price-to-list-price ratio was 100.0 pe rcent in August 2024 and 100.0 percent in August 2023.
The statewide median price per square foot for an existing single-family home was $427, up from $416 in August a year ago.
The 30-year, fixed-mortgage interest rate averaged 6.50 percent in August, down from
7.07 percent in August 2023, according to C.A.R.’s calculations based on Freddie Mac’s weekly mortgage survey data.
Affordability is an issue for most of California. According to C.A.R., higher prices combined with elevated mortgage rates that pushed borrowing costs to all-time highs pulled California’s housing affordability down to the lowest levels in nearly 17 years during the second quarter of 2024. Fourteen percent of the state’s homebuyers could afford to purchase a median-priced, existing single-family home in California in second-quarter 2024, down from 17 percent in the first quarter of 2024 and down from 16 percent in the second quarter of 2023, according to C.A.R.’s Traditional Housing Affordability Index (HAI).
The second-quarter 2024 figure is less than a third of the affo rdability index peak of 56 percent in the second quarter of 2012. Despite elevated mortgage rates in the second quarter, recent signs of weakness in macroeconomic reports have pushed rates down in the past few weeks. As the likelihood of the Fed c u t t i n g r a t e s a t t h e S e p t e m b e r m e e t i n g i n c r e a s e s , h o u s i n g a f f o rdability in California is expected to improve in the next quarter.
C.A.R.’s HAI measures the percentage of all households that can afford to purchase a median-priced, single-family home in California. C.A.R. also reports affordabi lity indices for regions and select counties within the state. The index is considered the most fundamental measure of housing well-being for home buyers in the state.
A minimum annual income of $236, 800 was needed to qualify for t he purchase of a $906,600 statewide median-priced, existing single-family home in the second quarte r of 2024. The monthly payment, including taxes and insurance (PITI) on a 30-year, fixed-rate loan, would be $5,920, assuming a 20 percent down payment and an effective composite interest rate of 7.10 percent. The effective composite interest rate was 6.68 percent in first-quarter 2024 and 6.61 percent in second-quarter 2024.
In the second quarter of 2024, the minimum annual income requir ed exceeded $200,000 for the sixth time in seven quarters, setting a new record high. The monthly PITI for a typical single-family home in California also hit a record high, rising by double digits from both the previous quarter and the same quarter last year.
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On a year-over-year basis, statewide home prices jumped 9.0 percent from second-quarter 2023, as competition and low inventory applied upward pressure on home p rices. As the market moves past the spring home-buying season and transitions to the off season, home prices will likely decline as market competition cools and housing inventory continues to improve. A consistent drop in mortgage rates expected in the coming months will lower borrowing costs and im prove affordability for the rest of the year.
The share of California households that could afford a typical condo/townhome in second-quarter 2024 fell to 22 percent, down from 24 percent recorded in the previous quarter and down from the 25 percent recorded in the second quarter of 2023. An annual income of $180,000 was required to make the monthly payment of $4,500 on the $690,000 median-priced condo/townhome in the second quarter of 2024.
Compared with California, about one-third of the nation’s households could afford to purchase a $422,100 median-priced home, which required a minimum annual income of $110,000 to make monthly payments of $2,750. Nationwide affordability was down from 36 percent a year ago.
In the second quarter of 2024, the nationwide mi nimum required annual income was half that of California's for the fifth consecutive quarter.
Key points from the second-quarter 2024 Housing Affordability report include:
When compared to Q124, housing affordability in Q224 declined i n 40 counties and remained unchanged in six. Seven counties showed quarter-to-qua rter improvement in affordability mainly due to price declines in those counties. W hen compared to a year ago, six counties registered an improvement in affordability, w hile 39 counties throughout the state posted a decline on a year-over-year basis , and eight remained unchanged.
Lassen (52 percent) remained the most affordable county in California, followed by Glenn (35 percent), Del Norte (34 percent), and Tehama (34 percent). Of all counties in California, Lassen continued to have the lowest minimum qualifying income ($65,200) to purchase a median-priced home in in second-quarter 2024.
Mono (5 percent), Monterey (8 percent), and Santa Barbara (9 pe rcent) were the least affordable counties in California, with each of the counties re quiring a minimum income of at least $267,600 to purchase a median-priced home in the re spective counties. San Mateo continued to require the highest minimum qualifying incom e ($574,800) to buy a median-priced home in the seco nd quarter of 2024 and, together with Santa Clara ($524,000), were the only two counties in California with a min imum qualifying income more than $500,000. Marin and San Francisco came in third and f ourth, requiring a minimum income of $469,200 and $444,000, respectively.
Housing affordability declined the most on a year-over-year bas is in Plumas, falling nine points from the previous year. Siskiyou recorded the second largest drop in affordability, moving seven percentage points below the same quarter of last year. Merced and Sutter had the third worst drop in affordability, decreasing six perce ntage points each from a year ago. Despite higher household income, higher home prices a nd elevated mortgage rates continue to keep housing affordability near its all-time lows across most counties.
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As noted, affordability is an issue in California with the home buyers’ ability to pay. In order to isolate this element, the first step is to identify the required annual hous ehold income based on typical mortgage parameters. Specifically, this includes a loan-to-value ratio at 80% (down payment of 20%), mortgage interest rate of 6.25%, 30-year amortization, and a 32% ratio for the house costs as a percent of monthly income (inclusive of principal, interest, taxes, and insurance). Property taxes are based on the base tax rate of 1.1438%, direct levies at $396.67 per annum, and CFD charges from $140.75 to $278.33 per month.
Revenues are based on current pricing as of the effective date of valuation. These calculations are shown in the Taxes and Special Assessments section of the Site Description of this report.
Based on these parameters, the following table shows the estimated annual household income required to afford homes for each specific project.
PROJECT SHOR LAKELET WATERSYDE WAVMOR CRESTVUE BLEAU DRIFTON V14/20 MIN LOT SIZE 2,788 SF 3,690 SF 4,000 SF 4,500 SF 4,675 SF 5,000 SF 5,500 SF 3,690 SF Average Home Size (SF) 1,982 SF 2,233 SF 2,650 SF 2,484 SF 2,557 SF 2,923 SF 3,037 SF 1,640 SF Average Price $570,240 $619,657 $681,190 $652,990 $679,590 $751,823 $735,657 $528,740 Loan % of Price (LTV) 80% 80% 80% 80% 80% 80% 80% 80%
Loan Amount $456,192 $495,726 $544,952 $522,392 $543,672 $601,458 $588,526 $422,992 Interest Rate 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% Monthly Mortgage Payment* $2,808.85 $3,052.27 $3,355.36 $3,216.46 $3,347.48 $3,703.28 $3,623.66 $2,604.43 Base Taxes (1.1438) - Monthly $543.53 $590.64 $649.29 $622.41 $647.76 $716.61 $701.20 $503.98 Direct Levies - Monthly $33.06 $33.06 $33.06 $33.06 $33.06 $33.06 $33.06 $33.06 HOA $90.00 $90.00 $90.00 $90.00 $90.00 $90.00 $90.00 $83.50 CFD Charges - Monthly $188.72 $214.90 $244.70 $235.68 $267.07 $271.40 $295.90 $149.37 Insurance** $125.00 $125.00 $125.00 $125.00 $125.00 $125.00 $125.00 $125.00 TOTAL PITI $3,789.16 $4,105.87 $4,497.41 $4,322.61 $4,510.37 $4,939.35 $4,868.82 $3,499.34 PITI as % of Income 32% 32% 32% 32% 32% 32% 32% 32%
Monthly Income $11,841.14 $12,830.83 $14,054.40 $13,508.15 $14,094.91 $15,435.48 $15,215.07 $10,935.43 Annual Income $142,094 $153,970 $168,653 $162,098 $169,139 $185,226 $182,581 $131,225 Rounded $142,000 $154,000 $169,000 $162,000 $169,000 $185,000 $183,000 $131,000 **Based on 30-Year Amtz. At 6.25%
***Based on annual premium of $1,500, includes flood insurance.
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According to these calculati ons, annual income between $131,000 and $185,000 is required to have the ability to afford homes in the subject neighborhood. The overa ll project average is noted at $160,000 with overall calculations shown below.
Income data as developed from Claritas (Demographic based websi te) for zip codes 95834 and 95835 (North Natomas) was obtained. This is representative of typica l buyers (based on income levels) for the subject property. The following map depicts these areas.
PROJECT PROJECT
MIN LOT SIZE 4,099 SF
Average Home Size (SF) 2,387 SF
Average Price $643,455
Loan % of Price (LTV) 80%
Loan Amount $514,764
Interest Rate 6.25%
Monthly Mortgage Payment* $3,169.49
Base Taxes (1.1438) - Monthly $613.32
Direct Levies - Monthly $33.06
HOA $89.23
CFD Charges - Monthly $228.45
Insurance** $125.00
TOTAL PITI $4,258.55
PITI as % of Income 32%
Monthly Income $13,307.97
Annual Income $159,696
Rounded $160,000
Subject
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Income brackets, as well as the percentage of households with t he ability to afford homes between $528,740 to $751,823, as well as the average indicators are sho wn below. Income is presented in terms of 2024 estimates as well as 2029 projections.
According to income schedules noted above, the affordability ratio is 38.0% for homes priced at $528,740 and is projected to increase to 44.3% as of 2029. This rate drops for homes priced at $751,823 identified at 26.1%, increasing to 32.0% in 2029. On an overall basis, the average price point is $643,455. Essentially, this is for income levels at $160,000 and above. The total schedule of affordab ility based on the entire project is as follows.
$528,740 HOME (Low)
(Min. Income $131,000) PERCENT PERCENT HOUSEHOLDS PERCENT PERCENT HOU SEHOLDS
HOUSEHOLD INCOME OF HOUSEHOLDS ABLE TO PAY ABLE TO PAY OF HOUSEHOLD S ABLE TO PAY ABLE TO PAY <$15,000 3.66% 0.0% 0.0% 3.26% 0.0% 0.0%
$15,000 - $24,999 4.81% 0.0% 0.0% 4.13% 0.0% 0.0%
$25,000 - $34,999 4.45% 0.0% 0.0% 4.23% 0.0% 0.0%
$35,000 - $49,999 7.77% 0.0% 0.0% 6.77% 0.0% 0.0%
$50,000 - $74,999 10.96% 0.0% 0.0% 10.50% 0.0% 0.0%
$75,000 - $99,999 13.39% 0.0% 0.0% 11.34% 0.0% 0.0%
$100,000 - $124,999 14.11% 0.0% 0.0% 12.50% 0.0% 0.0%
$125,000 - $149,999 11.60% 75.0% 8.7% 11.73% 75.0% 8.8% $150,000 - $199,999 12.41% 100.0% 12.4% 14.30% 100.0% 14.3% $200,000 - $249,999 6.76% 100.0% 6.8% 8.17% 100.0% 8.2% $250,000 - $499,999 7.05% 100.0% 7.1% 8.81% 100.0% 8.8% >$500,000 3.03% 100.0% 3.0% 4.26% 100.0% 4.3%
TOTALS 100.0% 38.0% 100.0% 44.3%
Median Household Income
Average Household Income
2029 ESTIMATES
$119,511
$149,564
2024 ESTIMATES
$108,672
$134,45
8 $751,823 HOME (High)
(Min. Income $185,000) PERCENT PERCENT HOUSEHOLDS PERCENT PERCENT HOU SEHOLDS
HOUSEHOLD INCOME OF HOUSEHOLDS ABLE TO PAY ABLE TO PAY OF HOUSEHOLD S ABLE TO PAY ABLE TO PAY <$15,000 3.66% 0.0% 0.0% 3.26% 0.0% 0.0%
$15,000 - $24,999 4.81% 0.0% 0.0% 4.13% 0.0% 0.0%
$25,000 - $34,999 4.45% 0.0% 0.0% 4.23% 0.0% 0.0%
$35,000 - $49,999 7.77% 0.0% 0.0% 6.77% 0.0% 0.0%
$50,000 - $74,999 10.96% 0.0% 0.0% 10.50% 0.0% 0.0%
$75,000 - $99,999 13.39% 0.0% 0.0% 11.34% 0.0% 0.0%
$100,000 - $124,999 14.11% 0.0% 0.0% 12.50% 0.0% 0.0%
$125,000 - $149,999 11.60% 0.0% 0.0% 11.73% 0.0% 0.0%
$150,000 - $199,999 12.41% 75.0% 9.3% 14.30% 75.0% 10.7% $200,000 - $249,999 6.76% 100.0% 6.8% 8.17% 100.0% 8.2% $250,000 - $499,999 7.05% 100.0% 7.1% 8.81% 100.0% 8.8% >$500,000 3.03% 100.0% 3.0% 4.26% 100.0% 4.3%
TOTALS 100.0% 26.1% 100.0% 32.0%
Median Household Income
Average Household Income
2024 ESTIMATES 2029 ESTIMATES
$108,672 $119,511
$134,45
8 $149,564
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The overall affordability ratio for this project generally falls between 26.1% to 38.0% of all households in zip codes 95834 and 95835. The average for the entire project is at 28.0%. This is lower than has been identified in the past few years due to rising interest rates, which could slow sales rates of new homes in this area. Home builders have r esponded with higher concessio n levels including financing concessions in order to alleviate some of the burden to homebuyers in response to rising rates.
Currently, economic conditions are stable after being influence d by the inflationary environment.
Inflation was at a 40-year high in 2022, and rising interest rates are the main vehicle used to combat rising inflation in all sectors. This impacted the housing market wit h slower levels of sales and pricing starting to reverse course after two years of high levels of appreciation. While new home sales are showing higher levels of pricing, the rising interest rates will compress affo rdability ratios and pricing will have to adjust to levels to stimulate sales. Recently, rates were lowered in September 2024.
According to the most recent m eeting September 18, 2024 by the Federal Reserve, recent indicators suggest that economic activity ha s continued to expand at a sol id pace. Job gains have slowed, and the unemployment rate has moved up but remains low. Inflation has made further progress toward the Committee’s 2 percent objective but remains somewhat elevated.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee has gained greater confidence that in flation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance.
The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
In light of the progress on inflation and the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/2 percentage point to 4-3 /4 to 5 percent. In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.
$643,455 HOME (Average)
(Min. Income $160,000) PERCENT PERCENT HOUSEHOLDS PERCENT PERCENT HOU SEHOLDS
HOUSEHOLD INCOME OF HOUSEHOLDS ABLE TO PAY ABLE TO PAY OF HOUSEHOLD S ABLE TO PAY ABLE TO PAY <$15,000 3.66% 0.0% 0.0% 3.26% 0.0% 0.0%
$15,000 - $24,999 4.81% 0.0% 0.0% 4.13% 0.0% 0.0%
$25,000 - $34,999 4.45% 0.0% 0.0% 4.23% 0.0% 0.0%
$35,000 - $49,999 7.77% 0.0% 0.0% 6.77% 0.0% 0.0%
$50,000 - $74,999 10.96% 0.0% 0.0% 10.50% 0.0% 0.0%
$75,000 - $99,999 13.39% 0.0% 0.0% 11.34% 0.0% 0.0%
$100,000 - $124,999 14.11% 0.0% 0.0% 12.50% 0.0% 0.0%
$125,000 - $149,999 11.60% 0.0% 0.0% 11.73% 0.0% 0.0%
$150,000 - $199,999 12.41% 90.0% 11.2% 14.30% 90.0% 12.9% $200,000 - $249,999 6.76% 100.0% 6.8% 8.17% 100.0% 8.2% $250,000 - $499,999 7.05% 100.0% 7.1% 8.81% 100.0% 8.8% >$500,000 3.03% 100.0% 3.0% 4.26% 100.0% 4.3%
TOTALS 100.0% 28.0% 100.0% 34.1%
Median Household Income
Average Household Income
$119,511
$149,564
2024 ESTIMATES
$108,672
$134,45
8 2029 ESTIMATES
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In assessing the appropriate stan c e o f m o n e t a r y p o l i c y , t h e C o m m i t t e e w i l l c o n t i n u e t o m o n i t o r t h e implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks em erge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
As relates to housing, higher interest rates increase the cost of housing by making the mortgage payment greater than at lower interest rates. The Federal Reserve has determined that it needs to act to stem the rise of inflation and has increased interest rates identified as follows.
Interest rates have remained stable in the past twelve months. In the recent September meeting, the Federal Funds Rate was lowered to reflect 4.75% to 5.00%. Currently, new homes are selling with builder incentives, in which the builder buys down the interest rate fo r the first few years, then the rate adjusts to market. Buyers are purchasing homes with these concessions in the anticipation of refinancing their mortgages when rates are lower. Still, recent reductions in the Federal Funds rate will likely flow to the housing market with lower interest rates and having positive impact on demand.
Affordability calculations were based on a pessimistic viewpoint with rates at elevated levels. There is potential for lower interest rat es in the foreseeable future (6 t o 1 2 m o n t h s ) , w h i c h w o u l d e s c a l a t e affordability ratios. As rates s tabilize, the affordability rate i s e x p e c t e d t o r i s e a s i n c o m e l e v e l s a r e projected to increase in the next 5 years.
Looking forward, C.A.R. released their 2025 California Housing Market Forecast on September 25, 2024.
C a l i f o r n i a h o m e s a l e s a n d p r i c e a r e p r o j e c t e d t o i n c r e a s e a s b u y e r s a n d s e l l e r s r e t u r n t o t h e m a r k e t , enticed by lower interest rates and better housing supply conditions.
Existing, single-family home sales are forecast to total 304,400 units in 2025, an increase of 10.5 percent from 2024’s projected pace of 275,400.
California’s median home price is forecast to climb 4.6 percent to $909,400 in 2025, following a projected 6.8 percent increase to $869,500 in 2024 from 2023’s $814,000.
Housing affordability is expected to remain stable at 16 percen t next year after slipping to a projected 16 percent in 2024 from 17 percent in 2023.
FEDERAL FUNDS
DATE EFFECTIVE RATE
January 1, 2022 0.08%
April 1, 2022 0.33%
July 1, 2022 1.68%
October 1, 2022 3.08%
January 1, 2023 4.33%
April 1, 2023 4.83%
July 1, 2023 5.12%
October 1, 2023 5.33%
January 1, 2024 5.33%
April 1, 2024 5.33%
July 1, 2024 5.33%
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A more favorable interest rate environment that will loosen up the “lock-in” effect and improve housing inventory will encourage buyers and sellers to return to the ma rket to boost both home sales and prices next year, according to a housing and economic forecast released by C.A.R.
The baseline scenario of C.A.R.’s “2025 California Housing Mark et Forecast” sees an increase in existing single-family home sales of 10.5 percent next year to reach 304 ,400 units, up from the projected 2024 sales figure of 275,400. The projected 2024 figure is 6.8 percent higher compared with the pace of 257,900 homes sold in 2023.
The California median home price is forecast to rise 4.6 percent to $909,400 in 2025, following a projected
6.8 percent increase to $869,500 in 2024 from $814,000 in 2023. A persistent housing shortage and a competitive housing market will continue to put upward pressure on home prices next year.
“An increase in homes for sale, along with lower borrowing cost s, is expected to entice more buyers and sellers to enter the market in 2025,” said C.A.R. President Melanie Barker. “Demand will grow as we start the year with the lowest interest rates in more than two years, particularly for first-time buyers.
Meanwhile, would-be home sellers, held back by the "lock-in eff ect," will have more flexibility to pursue a home that better suits their needs as mortgage rates continue to decline.”
C.A.R.’s 2025 forecast predicts the U.S. gross domestic product to slip to 1.1% in 2025, after a projected increase of 1.9% in 2024. With California’s 2025 nonfarm job growth rate at 1.1%, down from a projected
1.5% in 2024, the state’s unemplo yment rate will inch up to 5.6 % in 2025 from 2024’s projected rate of
5.4%.
Inflation will moderate further over the next 12 months, with t he CPI registering an annual average of
2.0% in 2025, down from 2.9% in 2024. As such, the average 30-y ear, fixed mortgage interest rate will decline from 6.6% in 2024 to 5.9% in 2025. While next year’s projected average for the 30-year fixed mortgage interest rate will be higher than the levels observed in the few years prior to the pandemic, it will still be lower than the long-run average of nearly 8% in the past 50 years.
Housing supply conditions will continue to improve next year, but a moderate increase rather than a surge in active listings should be expected in 2025. In the next 18 months, interest rates will decline, the lock-in effect will loosen up further, and more properties will be released onto the market. Homeowners who have delayed moving and investor s who have been waiting for a m arket bounce-back will put their properties up on the market as they see the rising trend in hom e prices as an opportunity to sell. While supply in 2025 will remain below the norm by historical standar ds, active listings will increase slightly above 10% as market conditions and lending environment continue to improve.
“Although inventory is expected to loosen as rates ease, demand will also increase with lower mortgage rates and limited housing supply, which will push home prices higher next year,” said C.A.R. Senior Vice President and Chief Economist Jo rdan Levine. “Price growth is e xpected to be slower, but the housing shortage will keep the market competitive outside of big econom ic shocks, so prices will still rise.
Assuming a healthy economy in 2025 that slows but does not shrink, home prices should rise modestly across California, with the state’s median price climbing 4.6 percent to reach $909,400 in 2025.”
Smith & Associates, Inc.
Regional Housing Trends
The Sacramento housing market is stabilizing after periods of a n inflationary environment and rising interest rates in the past two years. With interest rates rema ining flat in the past 9-12 months, home prices started to increase. With recent reductions in interest rates, pricing will likely increase. The table below shows the median home pricing for the four-county region according to the California Association of Realtors, including comparisons from the past two years.
AREA
ALL HOMES
MEDIAN PRICE
AUG 2022
MEDIAN PRICE
AUG 2023
MEDIAN PRICE
AUG 2024 %Δ 22-24
%Δ 23-24
Yolo $631,000 $622,500 $620,960 -1.6% -0.2%
El Dorado $627,000 $657,000 $650,000 3.7% -1.1%
Placer $649,000 $669,000 $675,000 4.0% 0.9%
Sacramento $535,000 $535,000 $559,000 4.5% 4.5%
CALIFORNIA $834,740 $859,670 $888,740 6.5% 3.4%
Home prices in the Sacramento Region have mostly improved since August 2022. Changes over the past 12 months reflect changes in pricing from (1.1%) to 4.5%. This information is showing increasing pricing at higher overall interest rates than compared to 2022 and into 2023.
Monthly changes in pricing over the past year for these countie s, as well as California on an overall basis as derived from the California Association of Realtors are note d below. Home prices are shown in terms of median price.
Pricing characteristics are note d above since August 2023 Over all pricing dropped in the latter half of 2023, but indicators for 2024 show increasing pricing.
MON-YR. CA EL DORADO PLACER SACRAMENTO YOLO
July-23 $832,340 $650,000 $660,000 $547,000 $625,000
August-23 $859,800 $657,000 $669,000 $535,000 $622,500
September-23 $843,340 $685,000 $665,000 $545,000 $608,640 October-23 $840,360 $660,000 $685,000 $550,000 $629,900 November-23 $822,200 $650,000 $659,000 $522,290 $620,000 December-23 $819,740 $660,000 $633,020 $535,000 $630,000 January-24 $788,940 $650,000 $620,000 $515,000 $600,360 February-24 $806,490 $647,500 $650,000 $530,000 $918,940 March-24 $854,490 $677,000 $659,000 $530,000 $635,830
April-24 $904,910 $757,000 $671,740 $548,580 $615,000
May-24 $908,040 $699,000 $675,000 $555,000 $653,980
June-24 $900,720 $709,000 $685,000 $560,000 $649,500
July-24 $886,560 $695,000 $670,000 $560,000 $610,000
August-24 $888,740 $650,000 $675,000 $559,000 $620,960
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Current levels of inventory are stable. The following table shows the total number of homes sold in each county according to Metrolist since 2018. Home prices are shown in terms of median price.
COUNTY 2018 2019 2020 2021 2022 2023 2024 ACTIVE*
Sacramento 19,112 18,410 18,155 19,344 15,142 11,317 8,729 2,143 Placer 6,174 6,213 6,805 7,006 5,615 4,618 3,661 1,032 El Dorado 2,815 2,616 3,381 3,329 2,502 1,893 1,446 670 Yolo 1,757 1,783 1,799 2,076 1,589 1,298 1,039 278
Totals 29,858 29,022 30,140 31,755 24,848 19,126 14,875 4,123 COUNTY 2018 2019 2020 2021 2022 2023 2024 ACTIVE
Sacramento $354,500 $366,975 $410,000 $480,304 $520,000 $510,000 $530,000 $575,000 Placer $470,000 $489,500 $520,000 $625,000 $669,447 $642,375 $65 0,000 $721,450 El Dorado $497,500 $495,000 $525,000 $621,000 $650,000 $630,000 $659,000 $732,500 Yolo $429,000 $449,000 $475,000 $550,000 $600,000 $599,000 $614,1 73 $649,500 MEDIAN SF 2018 2019 2020 2021 2022 2023 2024 ACTIVE
Sacramento 1,523 1,542 1,561 1,539 1,532 1,557 1,575 1,683 Placer 2,000 2,004 2,021 2,020 2,010 2,040 1,996 2,244 El Dorado 2,048 2,085 2,088 2,096 2,034 2,050 2,022 2,200 Yolo 1,590 1,640 1,685 1,607 1,633 1,726 1,710 1,902
MEDIAN $/SF 2018 2019 2020 2021 2022 2023 2024 ACTIVE
Sacramento $232.76 $237.99 $262.65 $312.09 $334.67 $327.55 $333.6 0 $332.25 Placer $235.00 $244.26 $257.30 $309.41 $342.72 $314.89 $342.98 $ 342.66 El Dorado $242.92 $237.41 $251.44 $296.28 $324.71 $307.32 $326.70 $333.99 Yolo $269.81 $273.78 $281.90 $342.25 $364.49 $347.05 $356.61 $363 .20 Source: Metrolist, *Active & 2024 information processed as of September 25, 2024
According to this information, pricing is trending upward. The following table shows changes for each individual county, as well as total inventory of homes.
COUNTY
2023 PRICING 2024 PRICING % CHANGE
ACTIVE
INVENTORY
SALES RATE/
TOTAL INVENTORY
Sacramento $510,000 $530,000 3.9% 2,143 998/Mo. – 2.1 Months Placer $642,375 $650,000 1.2% 1,032 418/Mo. – 2.5 Months El Dorado $630,000 $659,000 4.6% 670 156/Mo. – 4.1 Months Yolo $596,050 $614,173 1.6% 278 119/Mo. – 2.3 Months
Totals 4,123 1,700/Mo. – 2.4 Months
Source: Metrolist,*Active information processed as of September 25, 2024
The median home price is trending upward in most counties. Sac ramento County is 3.9% above the annualized average for 2023. Inventory levels in the resale market are stable with 4, 123 homes on the market as of September 25, 2024, representing approximately 2.4 months of inventory.
Smith & Associates, Inc.
The housing market in the local area is examined. The North Natomas region has re-emerged as an entry- level and first move-up housing market. Local sales trends are examined for this property with the use of Metrolist. Information on the table below is predicated on inf ormation for Zip Codes 95834 and 95835.
Sales trends are examined for this region since 2010 and noted on the following table.
YEAR
#
MEDIAN
PRICE
MEDIAN
SF
MEDIAN
$/SF
%
CHANGE
AVG.
PRICE
AVG.
SF
AVG.
$/SF
%
CHANGE
2010 1,324 $210,000 1,815 $115.70 -- $210,849 1,931 $109.19 -- 2011 1,424 $180,000 1,792 $100.45 -13.2% $187,872 1,901 $98.83 -9.5 % 2012 1,427 $200,000 1,871 $106.89 6.4% $202,946 1,981 $102.45 3.7% 2013 1,104 $250,500 1,796 $139.48 30.5% $258,082 1,937 $133.24 30.1 % 2014 1,041 $285,000 1,800 $158.33 13.5% $292,407 1,922 $152.14 14. 2% 2015 1,094 $304,750 1,796 $169.68 7.2% $309,738 1,908 $162.34 6.7% 2016 1,178 $325,000 1,769 $183.72 8.3% $336,130 1,919 $175.16 7.9% 2017 1,132 $355,000 1,800 $197.22 7.3% $362,919 1,885 $192.53 9.9% 2018 1,320 $381,000 1,869 $203.85 3.4% $386,525 1,939 $199.34 3.5% 2019 1,168 $385,000 1,802 $213.65 4.8% $396,317 1,901 $208.48 4.6% 2020 1,135 $420,000 1,849 $227.15 6.3% $429,104 1,915 $224.08 7.5% 2021 1,229 $519,000 1,811 $286.58 26.2% $522,302 1,904 $274.32 22.4 % 2022 923 $555,000 1,786 $310.75 8.4% $561,405 1,873 $299.74 9.3% 2023 622 $522,000 1,764 $291.12 -6.3% $536,346 1,855 $297.85 -0.6% 2024 462 $535,000 1,761 $300.42 3.2% $542,812 1,832 $306.09 2.8% Active 106 $532,450 1,715 $311.32 $554,242 1,854 $312.20 Source: Metrolist. YTD information as of September 25, 2024.
Residential values have escalated in the immediate area. This is measured through price per square foot characteristics. The main jump was from 2012 to 2013 as the me d ian p ric e in c re ase d 30.5% an d the average price increased 30.1%. Interest rates were trending downward at this time and the overall market gained momentum at this time. The median price increased from 3.4% to 13.5%, per annum since this time through the end of 2020. Average prices increased 3.5% t o 14.2% over the same time frame.
However, the market escalated again in 2021 with median pricing showing 26.2% year-over-year increases and average pricing showing 8.4% year-over-year increases.
Pricing dropped in 2022 with risin g interest rates. The median p r i c e p e r s q u a r e f o o t d r o p p e d 6 . 3 % , w h e r e a s t h e a v e r a g e p r i c e p e r s q u a r e f o o t d r o p p e d 0 . 6 % . Y e a r - to-date indicators for 2024 shows increased pricing in both sectors with both median and average pricing near 2022 levels.
Monthly sales totals for 2023 and 2024 for Zip Codes 95834 and 95835 are noted as follows. It is based on the past 12 months.
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MONTH
#
MEDIAN
PRICE
MEDIAN
SF
MEDIAN
$/SF
%
CHANGE
AVG.
PRICE
AVG.
SF
AVG.
$/SF
%
CHANGE
Oct. 23 56 $546,000 1,815 $291.84 -- $529,383 1,821 $299.43 -- Nov. 23 32 $520,000 1,817 $299.96 2.8% $547,118 1,831 $303.58 1.4% Dec. 23 36 $527,500 1,681 $293.31 -2.2% $511,339 1,809 $293.50 -3.3 % Jan. 24 40 $512,500 1,804 $282.97 -3.5% $506,136 1,824 $283.43 -3.4 % Feb. 24 43 $545,000 1,845 $299.11 5.7% $548,209 1,850 $306.01 8.0% Mar. 24 44 $544,000 1,740 $300.31 0.4% $535,475 1,807 $302.11 -1.3% Apr. 24 48 $529,750 1,722 $293.52 -2.3% $550,926 1,857 $308.87 2.2% May 24 63 $540,000 1,717 $304.00 3.6% $551,747 1,853 $307.46 -0.5% June 24 57 $545,000 1,823 $303.48 -0.2% $552,226 1,877 $302.30 -1.7% July 24 50 $525,000 1,676 $306.42 1.0% $523,804 1,715 $316.35 4.6% Aug. 24 68 $552,000 1,750 $310.26 1.3% $550,242 1,710 $314.26 -0.7% Sept.-24 47 $550,000 1,804 $298.19 -3.9% $561,636 1,925 $303.40 -3. 5% Active 106 $532,450 1,715 $311.32 $554,242 1,854 $312.20 Source: Metrolist. YTD information as of September 25, 2024.
September 2024 indicators tend to point to a price per square f oot of approximately $298 to $303. The current inventory of homes on the market is 106 homes, which reflects 2.0 months of existing supply (the pace of sales to liquidate current inventory) based on the 2024 rate of sales.
By way of comparison to the price points identified in the resa le market, the following table summarizes current pricing for the subject project.
Price per square foot references for the subject project show a n overall range from $242 to $322 per square foot. The overall project average is identified at $270 per square foot. While the average unit size is larger than noted for the resale market, the price per square foot references are consistent with current pricing showing indicators near $300 per square foot. The table on the following page shows current base prices as of the effective date of valuation.
MIN AVERAGE AVERAGE
PROJECT LOT SIZE (SF) BASE PRICE (NET) SIZE (SF) PRICE/SF Shor 2,768 SF $570,240 1,982 $288
Lakelet 3,690 SF $619,657 2,233 $277
Watersyde 4,000 SF $681,190 2,650 $257
Wavmor 4,500 SF $652,990 2,484 $263
Crestvue 4,675 SF $679,590 2,557 $266
Bleau 5,000 SF $751,823 2,923 $257
Drifton 5,500 SF $735,657 3,037 $242
V14/20 3,690 SF $528,740 1,640 $322
TOTALS 4,099 SF $643,455 2,387 $270
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NET
# Units BASE BASE
PROJECT Lot Size PRICE CONCESSIONS PRICE SF $/SF
SHOR 193 $549,990 ($10,000) $539,990 1,774 $304.39 2,788 SF $572,990 ($10,000) $562,990 1,945 $289.46 $593,990 ($10,000) $583,990 2,018 $289.39
$603,990 ($10,000) $593,990 2,190 $271.23
AVERAGE $580,240 ($10,000) $570,240 1,982 $288
LAKELET 173 $610,990 ($10,000) $600,990 2,114 $284.29 3,690 SF $626,990 ($10,000) $616,990 2,223 $277.55 $650,990 ($10,000) $640,990 2,362 $271.38
AVERAGE $629,657 ($10,000) $619,657 2,233 $277
WATERSYDE 153 $650,990 ($10,000) $640,990 2,307 $277.85 4,000 SF $661,990 ($10,000) $651,990 2,469 $264.07 $696,990 ($10,000) $686,990 2,704 $254.06
$716,990 ($10,000) $706,990 2,804 $252.14
$728,990 ($10,000) $718,990 2,968 $242.25
AVERAGE $691,190 ($10,000) $681,190 2,650 $257
WAVMOR 163 $640,990 ($10,000) $630,990 2,134 $295.68 4,500 SF $646,990 ($10,000) $636,990 2,394 $266.08 $672,990 ($10,000) $662,990 2,620 $253.05
$690,990 ($10,000) $680,990 2,786 $244.43
AVERAGE $662,990 ($10,000) $652,990 2,484 $263
CRESTVUE 138 $601,990 ($10,000) $591,990 1,789 $330.91 4,675 SF $664,990 ($10,000) $654,990 2,268 $288.80 $691,990 ($10,000) $681,990 2,679 $254.57
$729,990 ($10,000) $719,990 2,869 $250.96
$758,990 ($10,000) $748,990 3,178 $235.68
AVERAGE $689,590 ($10,000) $679,590 2,557 $266
BLEAU 110 $665,990 ($10,000) $655,990 2,150 $305.11 5,000 SF $707,990 ($10,000) $697,990 2,727 $255.96 $753,990 ($10,000) $743,990 2,977 $249.91
$777,990 ($10,000) $767,990 3,046 $252.13
$807,990 ($10,000) $797,990 3,180 $250.94
$856,990 ($10,000) $846,990 3,460 $244.79
AVERAGE $761,823 ($10,000) $751,823 2,923 $257
DRIFTON 108 $681,990 ($10,000) $671,990 2,282 $294.47 5,500 SF $711,990 ($10,000) $701,990 2,964 $236.84 $746,990 ($10,000) $736,990 3,104 $237.43
$738,990 ($10,000) $728,990 3,135 $232.53
$786,990 ($10,000) $776,990 3,312 $234.60
$806,990 ($10,000) $796,990 3,425 $232.70
AVERAGE $745,657 ($10,000) $735,657 3,037 $242
V14/20 139 $519,990 ($10,000) $509,990 1,454 $350.75 3,690 SF $529,990 ($10,000) $519,990 1,568 $331.63 $541,990 ($10,000) $531,990 1,631 $326.17
$562,990 ($10,000) $552,990 1,907 $289.98
AVERAGE $538,740 ($10,000) $528,740 1,640 $322
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New Home Characteristics
The average price of a new home ranges from $513,560 (Yuba County) to $930,555 (El Dorado County) in the Sacramento region. According to the Gregory Group (New Hous ing Trends), 2 nd Quarter 2024, the historic average pricing for the Sacramento region is identifie d on the following table. It is clearly noted that this level of pricing is based on gross pricing, prior to incentives.
COUNTY 2Q 2022 2Q 2023 2Q 2024 %Δ 22-24 %Δ 23-24
El Dorado County $925,316 $986,100 $930,555 0.6% -5.6%
Placer County $731,952 $755,823 $805,069 10.0% 6.5%
Sacramento County $734,765 $690,152 $686,964 -6.5% -0.5% Sutter County $462,262 $579,565 $606,209 31.1% 4.6%
Yolo County $671,035 $649,916 $675,377 0.6% 3.9%
Yuba County $516,926 $488,575 $513,560 -0.7% 5.1%
REGIONWIDE $725,889 $710,853 $724,717 -0.2% 2.0%
Pricing changes from 2022 to 2024 (2 nd Quarter), as well as changes over the past year are identified on the table above. This information shows that pricing has decreased in the entire region by 0.2% since the 2nd Quarter of 2022. Year-over-year regionwide changes increased by 2.0%. This shows pricing is nearing levels experienced in 2nd quarter 2022, when interest rates were lower.
There were between 7,790 and 8,099 sales identified in the regi on from 2020 to 2021. The new home market escalated during Covid-19 and low interest rates. These levels dropped in 2022 with rising inflation and increases in interest rates to 5,568 sales. Home buyers adjusted to these interest rates and 2023 produced 7,019 total sales. Sales for 2024 are identified at 4,363 sales based on total sales through the first half of 2024. These elements are identified as follows.
COUNTY 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 El Dorado County 183 351 559 637 328 259 417 358 228 271 161 Placer County 1,048 1,503 1,643 1,866 1,676 1,592 2,300 2,958 2,170 2,571 1,336 Sacramento County 1,258 1,793 2,327 2,540 2,674 3,220 3,885 3,859 2, 557 3,351 2,219 Sutter County 8 13 27 92 109 92 452 102 53 33 36
Yolo County 169 199 409 464 278 505 312 432 196 434 342 Yuba County 73 127 122 54 169 328 424 390 364 359 269
REGIONWIDE 2,739 3,986 5,087 5,653 5,234 5,996 7,790 8,099 5,568 7,019 4,363 Source: The Gregory Group, 2nd Quarter 2024
The subject property is located in the Sacramento County market area. New home sales dropped 33.7% in 2022 as compared to levels identified in 2021. Total sales in 2023 were 31.1% above levels in 2022 and in 2024, 2,219 new homes were sold in Sacramento County. This is approximately 66.2% of the total sales noted in 2023, however, 2024 information is based on the first two quarters. By way of comparison, 1,690 new homes were sold in the first half of 2023, and year-to-date sales are 31.3% higher in 2024.
Historically, the Natomas area has captured between 7.7% and 11 .0% of all new home sales in the Sacramento region between 2020 and 2023. This dropped in 2024 to 3.0% and 3.1% based on sales information through the 2
nd quarter of 2024. This is a function of available projects in this region as of the effective date of valuation as this community is nearing build-out.
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Natomas New Home Trends
The North Natomas area includes 10 new home developments. Acco rding to information compiled by The Gregory Group (2Q 2024), these projects demonstrate an average net price of $647,884 with the average square footage identified at 2,455 square feet. The fo llowing table shows historic information for North Natomas based on information compiled by The Gregory Group dating back to 3Q 2015. This time frame is most applicable due to the lack of building cause d by the flood zone elements discussed above.
$0.00
$50.00
$100.00
$150.00
$200.00
$250.00
$300.00
3Q 2015
4Q 2015
1Q 2016
2Q 2016
3Q 2026
4Q 2016
1Q 2017
2Q 2017
3Q 2017
4Q 2017
1Q 2018
2Q 2018
3Q 2018
4Q 2018
1Q 2019
2Q 2019
3Q 2019
4Q 2019
1Q 2020
2Q 2020
3Q 2020
4Q 2020
1Q 2021
2Q 2021
3Q 2021
4Q 2021
1Q 2022
2Q 2022
3Q 2022
4Q 2022
1Q 2023
2Q 2023
3Q 2023
4Q 2023
1Q 2024
2Q 2024
PRICE PER SF
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The Natomas submarket has re-emerged as a primary housing area of the Sacramento region. Net pricing dropped in 3Q 2022 as the result of average incentives at $21,172 per project, however pricing in 4Q 2023 increased to an average net price of $670,421. This dropped slightly in Q1 2024. In addition, inventory levels increased in the past quarter as the subject property (P hase 2 – Northlake) were included in the individual projects.
Total sales in this region, measured relative to Sacramento County, as well as the entire region are noted on the following table. This is based on information provided by the Gregory Group.
Number of Average Average Average Price Per Quarterly Unsold Unoffere dA b s . R a t e A b s . R a t e Quarter Projects Lot Size (SF) Home Size (SF) Net Price SF Sold Invent ory Inventory Quarterly 12-Month 3Q 2015 3 3,533 2,194 $334,120 $152.29 30 11 146 3.1/Mo. 7.7/Mo. 4Q 2015 10 3,597 1,997 $327,724 $164.11 98 72 781 3.0/Mo. 6.2/Mo. 1Q 2016 10 3,442 1,997 $335,853 $168.18 123 40 690 3.8/Mo. 4.5/Mo. 2Q 2016 10 3,597 1,934 $331,005 $171.15 107 48 682 3.3/Mo. 4.3/Mo. 3Q 2026 14 3,382 1,892 $339,602 $179.49 123 71 1103 2.7/Mo. 3.2/Mo. 4Q 2016 15 3,333 1,913 $340,802 $178.15 156 127 1174 3.2/Mo. 4.1/Mo. 1Q 2017 16 3,511 1,935 $348,587 $180.15 211 86 1084 4.0/Mo. 4.1/Mo. 2Q 2017 19 3,604 1,992 $363,310 $182.38 344 74 925 5.6/Mo. 4.5/Mo. 3Q 2017 21 3,857 2,019 $375,039 $185.75 249 185 733 3.6/Mo. 4.3/Mo. 4Q 2017 21 3,792 1,983 $378,995 $191.12 214 113 803 3.1/Mo. 3.9/Mo. 1Q 2018 22 3,757 1,972 $386,736 $196.11 252 102 852 3.5/Mo. 4.1/Mo. 2Q 2018 20 3,435 1,962 $391,823 $199.71 227 99 721 3.5/Mo. 4.2/Mo. 3Q 2018 20 3,356 1,964 $399,011 $203.16 236 104 585 3.6/Mo. 4.1/Mo. 4Q 2018 22 3,439 1,915 $396,024 $206.80 162 168 598 2.3/Mo. 3.8/Mo. 1Q 2019 23 3,421 1,921 $397,492 $206.92 229 186 435 3.1/Mo. 3.7/Mo. 2Q 2019 21 3,491 1,950 $396,855 $203.52 282 132 927 4.1/Mo. 4.1/Mo. 3Q 2019 21 3,071 2,018 $409,411 $202.88 245 144 716 3.6/Mo. 3.8/Mo. 4Q 2019 19 3,067 1,957 $402,341 $205.59 161 136 886 2.6/Mo. 3.4/Mo. 1Q 2020 20 3,154 1,950 $407,195 $208.82 260 147 1054 4.0/Mo. 3.4/Mo. 2Q 2020 18 3,038 1,898 $400,034 $210.77 170 132 1044 2.9/Mo. 3.3/Mo. 3Q 2020 17 3,096 1,866 $399,525 $214.11 260 55 955 4.1/Mo. 4.0/Mo. 4Q 2020 13 3,050 1,837 $404,813 $220.37 179 55 888 4.2/Mo. 4.1/Mo. 1Q 2021 20 3,825 2,184 $496,069 $227.14 281 45 1848 4.3/Mo. 4.7/Mo. 2Q 2021 19 3,927 2,231 $540,511 $242.27 237 33 1633 3.8/Mo. 4.1/Mo. 3Q 2021 18 3,983 2,252 $565,987 $251.33 195 22 1449 3.3/Mo. 3.8/Mo. 4Q 2021 17 4,065 2,300 $596,465 $259.33 90 26 1263 3.3/Mo. 3.7/Mo. 1Q 2022 16 4,065 2,365 $644,454 $272.50 222 49 1018 3.9/Mo. 4.3/Mo. 2Q 2022 16 4,065 2,365 $658,450 $278.41 138 65 831 3.7/Mo. 2.6/Mo. 3Q 2022 16 4,065 2,365 $629,226 $266.06 64 74 759 3.4/Mo. 1.2/Mo. 4Q 2022 16 4,065 2,365 $620,025 $262.17 55 90 690 2.9/Mo. 2.5/Mo. 1Q 2023 15 4,250 2,396 $619,787 $258.68 173 535 72 3.8/Mo. 2.4/Mo. 2Q 2023 14 4,250 2,433 $640,611 $263.30 159 378 55 3.8/Mo. 2.7/Mo. 3Q 2023 13 4,250 2,482 $659,527 $265.72 109 290 34 2.8/Mo. 3.1/Mo. 4Q 2023 12 4,250 2,519 $670,421 $266.15 100 282 29 2.8/Mo. 3.8/Mo. 1Q 2024 10 3,911 2,508 $636,019 $253.60 71 23 1,163 2.8/Mo. 2.2/Mo. 2Q 2024 9 3,921 2,455 $647,884 $263.90 63 26 1,236 3.1/Mo. 2.2/Mo.
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The Natomas sub-market has shown annualized sales between 479 and 1,018 sales per annum since 2016.
Data for 2015 is based on two quarters and reflects the time pe riod when building commenced in the region after several years of no activity. Sales for 2021 show 894 total sales, which dropped in 2022 to 479 sales. Information thorough 2024 shows 134 sales. However, th is is primarily due to the sales of most Quarterly Quarterly Capture Quarterly Capture
Quarter Sold (Natomas) Sold (Sacramento County) % Sold (Sacramento Region) % 3Q 2015 30 349 8.6% 805 3.7%
4Q 2015 98 494 19.8% 1,049 9.3%
TOTALS 128 843 15.2% 1,854 6.9%
1Q 2016 123 638 19.3% 1,352 9.1%
2Q 2016 107 555 19.3% 1,329 8.1%
3Q 2016 123 576 21.4% 1,207 10.2%
4Q 2016 156 558 28.0% 1,199 13.0%
TOTALS 509 2,327 21.9% 5,087 10.0%
1Q 2017 211 667 31.6% 1,541 13.7%
2Q 2017 344 896 38.4% 1,966 17.5%
3Q 2017 249 492 50.6% 1,053 23.6%
4Q 2017 214 485 44.1% 113 189.4%
TOTALS 1,018 2,540 40.1% 4,673 21.8%
1Q 2018 252 697 36.2% 1,448 17.4%
2Q 2018 227 693 32.8% 1,514 15.0%
3Q 2018 236 764 30.9% 1,290 18.3%
4Q 2018 162 520 31.2% 982 16.5%
TOTALS 877 2,674 32.8% 5,234 16.8%
1Q 2019 229 770 29.7% 1,457 15.7%
2Q 2019 282 960 29.4% 1,698 16.6%
3Q 2019 245 755 32.5% 1,428 17.2%
4Q 2019 161 735 21.9% 1,413 11.4%
TOTALS 917 3,220 28.5% 5,996 15.3%
1Q 2020 260 944 27.5% 1,846 14.1%
2Q 2020 170 634 26.8% 1,333 12.8%
3Q 2020 226 1,068 21.2% 2,243 10.1%
4Q 2020 179 1,239 14.4% 2,368 7.6%
TOTALS 835 3,885 21.5% 7,790 10.7%
1Q 2021 281 1,173 24.0% 2,676 10.5%
2Q 2021 237 1,015 23.3% 2,143 11.1%
3Q 2021 195 747 26.1% 1,473 13.2%
4Q 2021 181 924 19.6% 1,807 10.0%
TOTALS 894 3,859 23.2% 8,099 11.0%
1Q 2022 222 1,164 19.1% 2,356 9.4%
2Q 2022 138 744 18.5% 1,580 8.7%
3Q 2022 64 296 21.6% 792 8.1%
4Q 2022 55 366 15.0% 823 6.7%
TOTALS 479 2,570 18.6% 5,551 8.6%
1Q 2023 173 745 23.2% 1,782 9.7%
2Q 2023 159 945 16.8% 1,910 8.3%
3Q 2023 109 867 12.6% 1,929 5.7%
4Q 2023 100 794 12.6% 1,398 7.2%
TOTALS 541 3,351 16.1% 7,019 7.7%
1Q 2024 71 1,220 5.8% 2,355 3.0%
2Q 2024 63 999 6.3% 2,008 3.1%
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homes in Northlake Phase 1. Th is portion of the project gener ally north of the subject is nearing build out. While some homes are under construction in the subject ( Northlake – Phase 2), it will take a few months for model homes to be operational in this project area. Once completed, sales levels are expected to rise once again in this community, as well as Natomas on an overall basis.
Sales in the Northlake project are following suit. Initial homes for Northlake (Greenbriar Improvement Area 1) which include 1,137 homes commenced offering sales in January 2021. Through 2Q 2024, 1,095 homes sold in the project, which equates to an average absorpti on of 3.2 sales per month, per project (8 total). The following table summarizes sales activity in this community. Current pricing is reported as of the effective date of valuation.
Overall pricing of homes in this project ranges from $509,990 to $846,990. All of these projects are well received, which bodes well for the subject lots as they will reflect a continuation of these existing projects.
Concession levels identified for this project are based on stan ding inventory homes. It is noted that the pricing reported above is the net pricing, or the overall pricing net of $10,000 in concessions.
Total inventory levels noted above now reflect portions of the subject project. The total unit count for Phase 1 of this project is identified at 1,137 homes with 1,095 sold (excluding the 3 sales in V14/20) or remaining inventory of 42 lots. This correlates with the total number of lots for the project bringing the lot count for Northlake to 2,314 lots (1,137 Lots – Phase 1 + 1,177 Lots – Phase 2).
SUPPLY CONSTRAINTS
The development of the subject project, adjacent to Metro Air Park is one of the larger development sites in the region. As the recession and levee reconstruction slowed the pace of development, leftover existing home sites (finished lots that were unbuilt on as a result of the 2008 housing depression) were gradually reintroduced to the market and absorbed by homebuilders. The majority of these projects have sold out.
While there are several projects that will be selling homes con currently with the subject project, the Natomas sub-market has the ability to reach even greater sales.
The first potential element of supply is the remaining lots in existing projects. This is allocated among projects outside of Northlake, as well as the individual projects within the Northlake community based on information as of 2Q 2024.
NET TOTAL TOTAL
PROJECT LOT SIZE (SF) PLAN SIZE (SF) BASE PRICE PLANNED SOLD INVENTO RY AVERAGE Alta 3,403 SF 2,632-3,940 Sold Out 116 116 0 5.5/Mo.
Bleau 5,000 SF 2,150-3,460 $655,990 - $846,990 348 191 157 4.1/Mo.
Crestvue 4,675 SF 1,797-3,178 $591,990 - $748,990 235 99 136 2.2/Mo.
Drifton 5,500 SF 2,282-3,425 $671,990 - $796,990 236 131 105 3.0/Mo.
Lakelet 3,690 SF 2,114-2,360 $600,990 - $640,990 307 138 169 3.1/Mo.
Shor 2,788 SF 1,774-2,190 $539,990 - $593,990 337 143 194 3.2/Mo.
Watersyde 4,000 SF 2,307-2,968 $640,990 - $718,990 276 129 147 2.9/Mo.
Wavmor 4,500 SF 2,134-2,786 $630,990 - $680,990 320 148 172 3.3/Mo.
V14/20 3,690 SF 1,454-1,907 $509,990 - $552,990 139 3 136 N.A TOTALS 2,314 1,098 1,216
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Currently, total supply as of 2Q 2024 is comprised of 1,262 lots in existing projects. This includes 39 lots identified in Phase 1 of Northlake, as well as the 1,177 lots which comprise the subject of this report. The remaining 46 lots are in Northpoint Reserve, which just opened in April 2024.
Long-term, there are numerous lots identified for future develo pment in Natomas. They include the following:
PROJECT # LOTS
PROJECT # OF LOTS TOTAL SOLD INVENTORY TYPE LOT SIZE SHORT-TERM Northpoint Reserve 48 2 46 Detached 1,449 SF 46
TOTALS - NATOMAS PROJECTS 48 2 46 46
Alta 116 116 0 Detached 6,600 SF 0
Bleau 348 191 157 Detached 5,000 SF 157
Crestvue 235 99 136 Detached 4,675 SF 136
Drifton 236 131 105 Detached 5,500 SF 105
Lakelet 307 138 169 Detached 3,690 SF 169
Shor 337 143 194 Detached 2,788 SF 194
Watersyde 276 129 147 Detached 4,000 SF 147
Wavmor 320 148 172 Detached 4,500 SF 172
V14/20 139 3 136 Detached 3,690 SF 136
TOTALS - NORTHLAKE PROJECTS 2,314 1,098 1,216 1,216
OVERALL TOTALS 2,362 1,100 1,262 1,262
NATOMAS PROJECTS
NORTHLAKE PROJECTS
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PROJECT OWNER UNITS AC DENSITY COMMENTS
Upper
Westside
Upper
Westside
LLC
9,231 2,066 4.5 In planning stage, undergoing EIR and
Waiting for Specific Plan Approval. Long term
development located West of I-80 at
West El Camino
Sutter
Pointe
Various 17,500 7,528.2 2.3 Project has Specific Plan Approval.
Development is several years in the future
And will be over a 20-30 year buildout. Located
In southern Sutter County, west of Placer
County.
Panhandle Various 409 295.4 1.4 Project includes tentative map a nd could begin Construction in the next several years. Located
North of Del Paso Road, west of
Sorrento Road
Panhandle TPG 810 187.5 4.3 Project includes tentative map and could begin sales in the coming year. Project is located
north of Del Paso Road and west of
Sorrento Road.
Panhandle MLC Holdings 443 106.5 4.2 Project includes tentative map and could begin sales in the coming year. Project is located
North of Del Paso Road and west of
Sorrento Road.
Valley View Avdis 248 41.4 6.0 In t he planning stages located east of The Panhandle Project.
Innovation
District
Argent
Development
1,228 23.2 53.2 Project is in the planning stages and includes 39,000 SF of retail and 180,000 SF
of office space.
Life
District
Argent
Development
1,246 60.9 20.5 Project is in the planning stages and also includes 15,000 square feet of retail, 120,000
SF of office space and 120,000 SF of
hotel/commercial space.
Totals 31,115 10,309.1 3.0
The immediate area includes approximately 31,115 potential lots for future, long-term development.
The Upper Westside project is not close to development in the i mmediate future and could take several years prior to an initial phase brought to market. Still, over 50% of the units in this project are high density or very high density. Sutter Pointe is beyond the development horizon of the subject and not a competitor to this project. Both Innovation District and Life District are in the planning stages and a few years out for development activity. These projects offer a higher density lifestyle not highly competitive to the subject.
The most viable projects which could provide competition to the subject include the 1,662 units in Panhandle.
The Railyards development is future competition for the subject which is a 187.32-AC mixed use development project comprising 6,000 residential units, including 1,375 for sale units, as well as 895,360 square feet of retail space and more. This project is on the fringe of Downtown Sacramento and will cater to a differ buyer pool.
While future supply for the Natomas sub-market is abundant, the se projects are not highly competitive to the subject project. Most competition to the subject projec t is likely the lots from Panhandle. Still, this project lacks the exposure and location as the subject project as it is oriented approximately 2 miles east of State Highway 99, and accessed from either Del Paso Road or W. Elkhorn Boulevard. Furthermore, it is several miles east of the subject property and will likely be its own submarket.
Smith & Associates, Inc.
Overall, supply elements show long term potential growth for the Natomas sub-market. Supply elements appear in balance with demand generators as of the effective da t e o f v a l u a t i o n . W h i l e t h e r e a r e numerous lots in the immediate horizon, the subject has advantageous position of being the second phase of a very successful community.
EXISTING DEMAND
The competitive market area for the subject property is noted f rom current projects offering homes for sale in the Natomas sub-market. As noted earlier in this section, The Gregory Group identified 10 projects in this sub-market. This includes the Artisan and Edgeview Projects by Beazer Homes Both of these homes are sold out and not viewed as a competitive project. The remaining projects includes seven projects in Northlake Phase 1, as well as Nor thpointe Reserve, which opened for sale in April 2024. The overall proximity of these projects relative to the subject property is identified as follows.
Subject
Northpointe Reserve
Greenbriar
Phase 1
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COMPETING PROJECTS
Project 1 – Alta Project 2 - Bleau
Project 3 – Crestvue Project 4 – Drifton
Project 5 –Lakelet Project 6 – Shor
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Project 7 – Watersyde Project 8 – Wavmor
Project 9 – Northpointe Reserve
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PROJECT 1 – ALTA
This is a large lot project in the Northlake MPC by Lennar Home s. It opened for sale in January 2021.
Current pricing characteristics as provided from the Gregory Gr oup are noted as follows. It is noted that this information is as of 4Q 2023 as this project has sold out.
This project includes 116 lot s typically 6,600 square feet and reflects a traditional configuration.
A b s o r p t i o n b a s e d o n t h e t o t a l r a t e o f s a l e s i s 3 . 1 s a l e s p e r m onth, with lower absorption in the past quarter at 0.9 sales per month. The quarterly absorption rate is not reflective of sales in this project as there were only 3 units available in 4Q 23. Most recent pricin g is from $777,990 to $934,990, net of $5,000 in concessions. HOA dues are $90 per month. It is noted that this product line is not offered for sale within the subject project due to the lack of larger lots (6,600 SF). Also, the information above notes two sales periods for 1Q 2021.
Smith & Associates, Inc.
PROJECT 2 – BLEAU
This is a large lot project in the Northlake MPC by Lennar Home s. It opened for sale in January 2021.
Current pricing characteristics as p r o v i d e d f r o m t h e G r e g o r y G roup (2 nd Quarter 2024) are noted as follows.
This project includes 348 lots typically 5,000 square feet and reflects a traditional configuration. The total lot count includes those identified for this product line in Ph ase 2 of Northlake (subject property).
Absorption based on the total rate of sales is 4.3 sales per mo nth, with higher absorption in the past quarter at 8.6 sales per month. Most recent pricing is from $6 37,990 to $832,990, net of $10,000 in concessions. Pricing is higher in 2Q 2024 than the past quarte r as the developer lowered concession levels. Average net pricing is approaching levels identified in 2022 and 2023.
Smith & Associates, Inc.
PROJECT 3 – CRESTVUE
This is a large lot project in the Northlake MPC by Lennar Home s. It opened for sale in January 2021.
Current pricing characteristics as p r o v i d e d f r o m t h e G r e g o r y G roup (2 nd Quarter 2024) are noted as follows.
This project includes 235 lots typically 4,675 square feet and reflects a traditional configuration. The total lot count includes those identified for this product line in Ph ase 2 of Northlake (subject property).
Absorption based on the total rate of sales is 2.2 sales per mo nth. This is at the lower spectrum as this project sold the last unit in 3Q 2023 within Phase 1 of this project. The remainin g 136 units for this product line are in Phase 2.
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PROJECT 4 – DRIFTON
This is a large lot project in the Northlake MPC by Lennar Home s. It opened for sale in January 2021.
Current pricing characteristics as p r o v i d e d f r o m t h e G r e g o r y G roup (2 nd Quarter 2024) are noted as follows.
This project includes 236 lots typically 5,500 square feet and reflects a traditional configuration. The total lot count includes those identified for this product line in Ph ase 2 of Northlake (subject property).
A b s o r p t i o n b a s e d o n t h e t o t a l r a t e o f s a l e s i s 3 . 0 s a l e s p e r m onth, with lower absorption in the past quarter at 2.5 sales per month. Most recent pricing is from $67 1,990 to $796,990, net of $10,000 in concessions. HOA dues are $90 per month. Asking prices are slightly higher than noted in 2023.
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PROJECT 5 – LAKELET
This is a smaller lot project in the Northlake MPC by Lennar Homes. It opened for sale in January 2021.
Current pricing characteristics as p r o v i d e d f r o m t h e G r e g o r y G roup (2 nd Quarter 2024) are noted as follows.
This project includes 307 lots typically 3,690 square feet. The total lot count includes those identified for this product line in Phase 2 of Northlake (subject property). Absorption based on the total rate of sales is 3.1 sales per month, with lower absorption in the past quarter at 1.2 sales per month. This is influenced by the sell out of this project in Phase 1. Most recent pricing is from $593,990 to $617,990 net of $10,000 in concessions. HOA dues are $90 per month.
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PROJECT 6 – SHOR
This is a smaller lot project in the Northlake MPC by Lennar Homes. It opened for sale in January 2021.
Current pricing characteristics as p r o v i d e d f r o m t h e G r e g o r y G roup (2 nd Quarter 2024) are noted as follows.
This project includes 337 lots typically 2,788 square feet. The total lot count includes those identified for this product line in Phase 2 of Northlake (subject property). Absorption based on the total rate of sales is
3.2 sales per month, with lower absorption in the past quarter at 0.9 sales per month. This is influenced by the sell-out of this project in Phase 1. Most recent pricing is from $530,990 to $588,990, net of $10,000 in concessions. HOA dues are $90 per month.
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PROJECT 7 – WATERSYDE
This is a larger lot project in the Northlake MPC by Lennar Hom es. It opened for sale in January 2021.
Current pricing characteristics as p r o v i d e d f r o m t h e G r e g o r y G roup (2 nd Quarter 2024) are noted as follows.
This project includes 276 lots typically 4,000 square feet. The total lot count includes those identified for this product line in Phase 2 of Northlake (subject property). Absorption based on the total rate of sales is
2.9 sales per month, with higher absorption in the past quarter at 1.2 sales per month. Most recent pricing is from $625,990 to $709,990, net of $10,000 in concessions. HOA dues are $90 per month.
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PROJECT 8 – WAVMOR
This is a larger lot project in the Northlake MPC by Lennar Hom es. It opened for sale in January 2021.
Current pricing characteristics as provided from the Gregory Gr oup (2 nd quarter 2024) are noted as follows.
This project includes 320 lots typically 4,500 square feet. The total lot count includes those identified for this product line in Phase 2 of Northlake (subject property). Absorption based on the total rate of sales is
3.3 sales per month, with lower absorption in the past quarter at 2.8 sales per month. Most recent pricing is from $630,990 to $680,990 net of $10,000 in concessions. HOA dues are $90 per month.
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PROJECT 9 – NORTHPOINTE RESERVE
This is a small lot project in Natomas by Next Generation Capital. It opened for sale in April 2024. Current pricing characteristics as provided from the Gregory Group (2nd quarter 2024) are noted as follows.
This project includes 48 lots typically 1,449 square feet. It is a higher density, detached project with smaller homes. It is reflective of future competition for the subject , albeit to a secondar y degree based on the smaller lot size and location distant from Interstate 5. This project sold 2 units.
Conclusions
Potential absorption for the subject is best identified from th e same product lines in Phase 1 of this project. However, Phase 1 of this project is nearing completi on for most projects with homes starting construction in Phase 2 (subject project). With model complexes completed in Phase 2, sales are shifting toward this portion of the entire community. Furthermore, the floor plans are slightly different in that all of the homes are now electric with no natural gas.
Subject Positioning
Proposed price points for the subject property are based on pri cing established in the Absorption Study prepared by The Gregory Group dated May 2024. The following ta ble shows an overall summary of this pricing based on individual projects. It is noted that pricing i n t h i s r e p o r t w a s b a s e d o n 1 Q 2 0 2 4 information. This is identified for base pricing only.
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Absorption conclusions noted in these projects range from 2 to 4 sales per month, per project. Overall, they equate to 26 homes sold per month. It appears that absorption is a function of price. Average overall pricing noted by the Absorption Study is near $261 per square foot. Current asking prices for this project as of the effective date of valuation are slightly high er than illustrated in this absorption study ranging from $242 to $322 per square foot, with an overall aver age identified at $266 per square foot.
This is noted as follows.
As noted in this section, total sales identified in Q2 2024 in Natomas were identified at 61 sales. Still, Northlake has proven history noted by absorption references over the life of this project.
MIN AVERAGE AVERAGE ABS.
PROJECT LOT SIZE (SF) BASE PRICE (NET) SIZE (SF) PRICE/SF PROJ.
Shor 2,768 SF $542,500 1,982 $274 4/Mo.
Lakelet 3,690 SF $592,000 2,233 $265 4/Mo.
Watersyde 4,000 SF $645,400 2,650 $244 3/Mo.
Wavmor 4,500 SF $639,000 2,484 $257 3/Mo.
Crestvue 4,675 SF $651,600 2,557 $255 3/Mo.
Bleau 5,000 SF $699,000 2,923 $239 3/Mo.
Drifton 5,500 SF $723,833 3,037 $238 2/Mo.
V14/20 3,690 SF $526,750 1,640 $321 4/Mo.
TOTALS 4,099 SF $618,713 2,387 $259 26/Mo.
MIN AVERAGE AVERAGE ABS.
PROJECT LOT SIZE (SF) BASE PRICE (NET) SIZE (SF) PRICE/SF PROJ.
Shor 2,768 SF $570,240 1,982 $288 4/Mo.
Lakelet 3,690 SF $619,657 2,233 $277 4/Mo.
Watersyde 4,000 SF $681,190 2,650 $257 3/Mo.
Wavmor 4,500 SF $652,990 2,484 $263 3/Mo.
Crestvue 4,675 SF $679,590 2,557 $266 3/Mo.
Bleau 5,000 SF $751,823 2,923 $257 3/Mo.
Drifton 5,500 SF $735,657 3,037 $242 3/Mo.
V14/20 3,690 SF $528,740 1,640 $322 4/Mo.
TOTALS 4,099 SF $643,455 2,387 $270
2Q 24 1Q 24 4Q 23 3Q 23 2Q 23 1Q 23 4Q 22 3Q 22 2Q 22 1Q 22 4Q 21 3Q 21 2Q 21 1Q 21 Project Sold Sold Sold Sold Sold Sold Sold Sold Sold Sold Sold Sold Sold Sold Average Alta 0 0 3 4 17 8 1 7 16 12 16 12 11 9 116 3.1/Mo.
B l e a u 2 8 1 8 1 81 51 41 3 6 1 9 1 9 9 1 81 01 3 1 9 1 4 . 3 / M o .
C r e s t v u e 2 0 01 1 1 6684 1 7 1 5 9 1 2 8 9 9 2 . 2 / M o .
Drifton 8 6 7 8 16 11 10 0 11 19 11 9 10 5 131 3.0/Mo.
Lakelet 4 7 9 14 19 7 4 10 3 13 11 17 11 9 138 3.1/Mo.
Shor 3 9 4 7 21 14 5 5 9 18 10 15 14 9 143 3.2/Mo.
W a t e r s y d e 4 1 04 1 1 79948 1 3 2 1 8 1 4 7 1 2 9 2 . 9 / M o .
W a v m o r 9 1 69 1 0 1 2 8929 1 5 1 6 9 1 5 9 1 4 8 3 . 3 / M o .
V 1 4 / 2 0 3 0 0000000000003 N / A
TOTALS 61 66 54 70 117 76 50 37 69 126 109 97 97 69 1,098 3.1/Mo.
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On an annual basis, this equates as follows.
2021 – 372 Sales
2022 – 282 Sales
2023 – 317 Sales
2024 YTD – 127 Sales
Sales in this community were strong in 2021 amidst the Covid-19 era. This dropped in 2022, especially over the last 2 quarters due to rising interest rates. The developer adjusted pricing to market at this time and 2023 produced 317 sales. As noted, year-to-date sales are at 127 sales, but somewhat limited in the first half of 2024 with the number of projects available for sale. This data suggests demand, but primarily is historic information. While the projects are the same in Phase 2, V14/20 provides some diversity with a lower priced project. Still, it reflects the majority of future supply for Natomas.
In order to test potential absorption, region wide trends are e xamined. Individual communities are illustrated on the following table.
Absorption trends in these jurisdictions are examined. This includes Roseville, Folsom, Laguna, Elk Grove, and Rancho Cordova. The remaining locations are not parallel markets or primary markets in order for applicable comparison. This information is utilized to show potential absorption at similar price points.
With little projects in Natomas other than the subject property , it is used to test absorption potential in other markets. It is based on data gathered by the appraiser as of 2Q 2024.
ROSEVILLE
Roseville offers 40 new home projects with average pricing at $708,848. The average net price is noted at $700,662 after consideration of concessions at $8,186 per project. Lots average 6,233 square feet while the average home size is noted at 2,372 square feet. In Q2 2024, 435 homes were sold in Roseville, which e q u a t e s t o 3 . 4 s a l e s p e r m o n t h . L o o k i n g a t t h e s e p r o j e c t s i n terms of average price, the following conclusions were noted.
AVERAGE PRICE <$600,000 $600,000 to $700,000 <$700,000
Number of Projects 10 14 16
Average Lot Size 4,333 SF 4,718 SF 8,745 SF
Average Home Size 1,824 SF 2,224 SF 2,859 SF
Average Price $565,583 $634,986 $868,252
Concessions ($7,763) ($6,414) ($10,082)
Average Net Price $557,820 $628,571 $858,170
2Q Total Sales 117 170 148
Rate Per Month, Per Project 3.6/Mo. 4.7/Mo. 2.8/Mo
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Absorption rates in Roseville are slightly higher for the lower priced projects. Still with overall absorption at 3.4 sales per month, per project, with 40 new home projects is a good reflection of potential absorption.
FOLSOM
Folsom offers 21 new home projects with average pricing at $796 ,573. The average net price is noted at $786,134 after consideration of concessions at $10,439 per project. Lots average 4,722 square feet while the average home size is noted at 2,418 square feet. In Q2 2024, 196 homes were sold in Folsom, which e q u a t e s t o 2 . 9 s a l e s p e r m o n t h . L o o k i n g a t t h e s e p r o j e c t s i n terms of average price, the following conclusions were noted.
AVERAGE PRICE <$600,000 $600,000 to $700,000 <$700,000
Number of Projects 1 4 16
Average Lot Size Attached 2,821 SF 5,197 SF
Average Home Size 1,421 SF 1,863 SF 2,589 SF
Average Price $557,328 $662,339 $837,796
Concessions ($10,000) ($11,701) ($10,320)
Average Net Price $547,328 $651,268 $827,476
2Q Total Sales 0 37 159
Rate Per Month, Per Project 0.0/Mo. 2.8/Mo. 3.0/Mo
A b s o r p t i o n r a t e s i n F o l s o m a r e higher for the higher priced pro jects. At average overall pricing approaching $800,000 per home, it is superior to the Natomas Co mmunity. Still with overall absorption at 2.9 sales per month, per project, with 21 new home projects is a good reflection of potential absorption.
LAGUNA
Laguna offers 28 new home projects with average pricing at $682,748. The average net price is noted at $676,593 after consideration of concessions at $6,156 per proje ct. Lots average 4,337 square feet while the average home size is noted at 2,313 square feet. It is noted that this survey includes 4 projects offering homes in Delta Shores. This project area is identified by The Gregory Group as the C ity of Sacramento, however, based on the overall location it is part of the Laguna submarket. In Q2 2024, 220 homes were sold in Laguna, which equates to 2.4 sales per month. Looking at these projects in terms of average price, the following conclusions were noted.
AVERAGE PRICE <$600,000 $600,000 to $700,000 <$700,000
Number of Projects 5 10 13
Average Lot Size 3,018 SF 4,128 SF 5,235 SF
Average Home Size 1,861 SF 2,104 SF 2,658 SF
Average Price $571,178 $649,602 $765,398
Concessions ($5,000) ($6,292) ( $7,492)
Average Net Price $573,178 $643,310 $757,906
2Q Total Sales 51 72 97
Rate Per Month, Per Project 3.1/Mo. 2.2/Mo. 2.3/Mo
Absorption rates in Laguna are slightly higher for the lower pr iced projects. Still with overall absorption at 2.4 sales per month, per project, with 28 new home projects is a good reflection of potential absorption.
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ELK GROVE
Elk Grove offers 17 new home projects with average pricing at $648,978. The average net price is noted at $641,609 after consideration of concessions at $7,369 per project. Lots average 4,794 square feet while the average home size is noted at 2,243 square feet. In Q2 2024, 165 homes were sold in Elk Grove, which e q u a t e s t o 3 . 0 s a l e s p e r m o n t h . L o o k i n g a t t h e s e p r o j e c t s i n terms of average price, the following conclusions were noted.
AVERAGE PRICE <$600,000 $600,000 to $700,000 <$700,000
Number of Projects 7 4 5
Average Lot Size 4,150 SF 4,540 SF 5,950 SF
Average Home Size 1,843 SF 2,405 SF 2,695 SF
Average Price $564,478 $649,750 $781,545
Concessions ($7,360) ($5,000) ($10,000)
Average Net Price $557,118 $644,750 $771,545
2Q Total Sales 55 72 38
Rate Per Month, Per Project 2.4/Mo. 4.4/Mo. 2.3/Mo
Absorption rates in Elk Grove are slightly higher for the lower priced projects. Still with overall absorption at 3.0 sales per month, per project, with 17 new home projects is a good reflection of potential absorption.
RANCHO CORDOVA
Rancho Cordova offers 26 new home projects with average pricing at $656,509. The average net price is noted at $647,079 after consideration of concessions at $9,429 per project. Lots average 4,661 square feet while the average home size is noted at 2,367 square feet. In Q2 2024, 253 homes were sold in Rancho Cordova, which equates to 3.0 sales per month. Looking at these projects in terms of average price, the following conclusions were noted.
AVERAGE PRICE <$600,000 $600,000 to $700,000 <$700,000
Number of Projects 6 14 6
Average Lot Size 3,288 SF 4,604 SF 6,167 SF
Average Home Size 1,904 SF 2,344 SF 2,909 SF
Average Price $560,241 $652,053 $768,495
Concessions ($10,000) ($9,685) ($8,182)
Average Net Price $550,241 $642,367 $760,313
2Q Total Sales 52 171 30
Rate Per Month, Per Project 2.7/Mo. 3.8/Mo. 1.5/Mo
Absorption rates in Rancho Cordova are fairly consistent. New home projects in this region are somewhat distant from freeways, which is inferior as compared to the other regions.
COMPARISONS
The subject property includes three pricing delineations. Ther e are 3 smaller lot projects summarized as follows.
PROJECT SHOR LAKELET V14/20
Average Lot Size 2,768 SF 3,690 SF 3,690 SF
Average Home Size 1,982 SF 2,233 SF 1,640 SF
Average Net Price $563,740 $606,990 $526,750
Price Per Square Foot $284 $272 $321
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The three projects reflect an overall price per square foot ref erence from $272 to $321. The upper end of this range is for V14/20, which has the smallest home size. As compared to the other projects noted throughout the region with similar pricing, the following conclusions were developed.
AVERAGE PRICE ROSEVILLE FOLSOM LAGUNA ELK GROVE RANCHO
CORDOVA
Number of Projects 10 1 5 7 6
Average Lot Size 4,333 SF Attached 3,018 SF 4,540 SF 3,288 SF Average Home Size 1,824 SF 1,421 SF 1,861 SF 2,405 SF 1,904 SF Average Net Price $557,820 $547,328 $571,178 $644,750 $550,241 2Q Total Sales 117 0 51 72 52
Rate Per Month, Per Project 3.6/Mo. N/A 3.1/Mo. 4.4/Mo. 2.7/Mo.
Net Price Per Square Foot $305.82 $385.17 $306.92 $268.09 $288.99
Absorption of these projects at 4.0 sales per month is supporte d by these project areas. Folsom is an outlier based on the higher pricing structure, whereas Rancho C ordova is a lower indicator based on the location and distance from freeways. Roseville, Laguna, and El k Grove show 2Q 2024 absorption rates from 3.1 to 4.4 sales per month, per project.
The 3 projects on standard lots (4,000 sf to 4,675 sf) are identified as follows.
PROJECT WATERSYDE WAVMOR CRESTVIEW
Average Lot Size 4,000 SF 4,500 SF 4,675 SF
Average Home Size 2,650 SF 2,484 SF 2,557 SF
Average Net Price $662,390 $652,990 $670,790
Price Per Square Foot $250 $263 $262
These projects reflect an overall price per square foot reference from $250 to $263. As compared to the other projects noted throughout t he region with similar pricing , the following conclusions were developed.
AVERAGE PRICE ROSEVILLE FOLSOM LAGUNA ELK GROVE RANCHO
CORDOVA
Number of Projects 14 4 10 4 14
Average Lot Size 4,718 SF 2,821 SF 4,128 SF 4,540 SF 4,604 SF Average Home Size 2,224 SF 1,863 SF 2,104 SF 2,405 SF 2,344 SF Average Net Price $628,571 $651,268 $643,310 $644,750 $642,367 2Q Total Sales 170 37 72 72 171
Rate Per Month, Per Project 4.7/Mo. 2.8/Mo. 2.2/Mo 4.4/Mo. 3.8/Mo.
Net Price Per Square Foot $282.63 $349.58 $305.76 $268.09 $274.05
Absorption of these project at 3.0 sales per month is supported by these project areas. Folsom is an outlier based on the higher pricing structure, whereas Rancho C ordova is a lower indicator based on the location and distance from freeways. Roseville, Laguna, and El k Grove show 2Q 2024 absorption rates from 2.2 to 4.4 sales per month, per project.
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There are 2 projects with larger unit sizes. They are summarized as follows.
PROJECT BLEAU DRIFTON
Average Lot Size 5,000 SF 5,500 SF
Average Home Size 2,923 SF 3,037 SF
Average Net Price $735,157 $735,657
Price Per Square Foot $252 $242
These project shows an overall price per square foot range from $242 to $252. As compared to the other projects noted throughout the region with similar pricing, the following conclusions were developed.
AVERAGE PRICE ROSEVILLE FOLSOM LAGUNA ELK GROVE RANCHO
CORDOVA
Number of Projects 16 16 13 5 6
Average Lot Size 8,745 SF 5,197 SF 5,235 SF 5,950 SF 6,167 SF Average Home Size 2,859 SF 2,589 SF 2,658 SF 2,695 SF 2,909 SF Average Net Price $858,170 $827,476 $757,906 $771,545 $760,313 2Q Total Sales 148 159 97 38 30
Rate Per Month, Per Project 2.8/Mo 3.0/Mo 2.3/Mo 2.3/Mo 1.5/Mo Net Price Per Square Foot $300.16 $319.72 $285.14 $286.29 $261.37
Absorption of these project at 2.0 sales per month is lower than identified in these areas. However, price points for the subject projects is much lower than these compar able areas. Granted, home sizes are larger, but an advantage is no ted for pricing between $242 and $252 per square foot. Absorption is reconciled to 3 sales per month for these projects. This is at the upper end of this range, however, with recent reductions in interest rates, absorption levels could accelerate.
Interaction of Existing Supply and Demand
In deriving potential absorption for the subject, the following elements are considered:
Regional absorption trends trended downward in 2022 due to risi ng interest rates and inflationary environment. Sales trends escalated in 2023 slightly with recovery in pricing and fewer incentives.
Northlake sold 127 homes in 2024. This is toward the lower end of historic sales, but was influenced by the transition from Phase 1 (nearing completion with 39 units left) to Phase 2 (with recently completed model homes).
Subject lots are primary short term lots in Natomas which can c apture healthy market share. Panhandle has potential to compete with the subject, bu t is a secondary location in Natomas.
Pricing and absorption conclusions identified in the Market Study provided for review are consistent with other primary growth regions in Sacramento.
Resale home trends in Zip Code 95834 and 95835 show pricing fro m $294 to $309 per square foot.
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Absorption trends noted from the competing projects show potent ial absorption characteristics from a p p r o x i m a t e l y 2 t o 5 s a l e s p e r m o n t h . T h i s i s c o n s i s t e n t w i t h projections from the Absorption Study prepared by The Gregory Group as of May 2024 with absorption ra tes from 2 to 4 sales per month. On an overall basis, the following conclusions were developed in the Absorption Study.
This absorption schedule takes into consideration seven months of sales in 2024. It is noted that the absorption study provided for review is based on home sales. Absorption presented later in this report is based on lot sales to a builder. The main difference in the absorption schedules is that the appraiser’s calculations are based on consid eration of site development cos ts, as well as absorption considerations for the Phase 1 project offering the same product lines.
The overall absorption of homes identified in tables above equa tes to 26 sales per month. On an annualized basis, this equates to 312 sales per annum. As note d , D r i f t o n h a s b e e n i n c r e a s e d b y t h e appraiser to 3 sales per month, this escalating total sales to 27 sales per month, or 324 sales per annum.
Based on this rate of sales, potential absorption is noted as follows.
YEAR 1 2 3 4 TOTALS
Subject Lots Absorbed
Schedule of Takedowns
324 324 324 205 1,177
This absorption rate assumes no impact from Phase 1 sales. As noted in this section, there are 42 units remaining in Phase 1 as of the effective date of valuation. Th is is taken off of Year 1 absorption which shows the following parameters.
YEAR 1 2 3 4 TOTALS
Subject Lots Absorbed 282 324 324 247 1,177
The impact of 42 lots in Phase 1 are impacted in year 1.
In addition, the current takedown schedule of the subject lots, modified March 4, 2024 is noted as follows.
YEAR 1 2 3 4 5 TOTAL
Subject Lots Absorbed
Schedule of Takedowns
286 320 314 199 58 1,177
PRODUCT TYPE LOT SIZE # OF UNITS ABSORPTION 2024 2025 2026 2027 2028 Bleau 5,000 SF 110 3/Mo. 23 39 39 9 0
Crestvue 4,675 SF 138 3/Mo. 23 39 39 37 0
D r i f t o n 5 , 5 0 0 S F 1 0 8 2 / M o . 1 52 62 62 61 5 Lakelet 3,690 SF 173 4/Mo. 30 52 52 39 0
Shor 2,788 SF 193 4/Mo. 30 52 52 52 7
W a t e r s y d e 4 , 0 0 0 S F 1 5 3 3 / M o . 2 33 93 93 91 3 Wavmor 4,500 SF 163 3/Mo. 23 39 39 39 23
V14/20 3,690 SF 139 4/Mo. 30 52 52 5 0
TOTALS 1,177 197 338 338 246 58
Absorption Per Week
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The takedown schedule is fairly consistent with absorption note d a b o v e . A s n o t e d e a r l i e r , h i s t o r i c absorption is between 282 and 372 sales per annum. The schedu le by the developer is based on each individual project. However, remaining projects (based on thei r size) toward the end of this project include Shor (2,768 SF lot size), Lakelet (3,690 SF lot size), Wavmor (4,500 SF lot size). Given that these projects offer pricing toward the lower end of the projections, absorption near the end of the project will likely accelerate.
As noted earlier in this report, Lennar has already acquired 20 8 lots which is considered in this analysis.
Since the various dates of acquisition, they have constructed 11 model homes, and commenced construction on the majority of these lots including acquiring the necessary permits from the City of Sacramento. The net result in 969 lots identified under the Integral Ownership. This is allocated as follows.
YEAR 1 2 3 4 TOTALS
Subject Lots Absorbed
Schedule of Takedowns
282 324 324 247 1,177
Integral Ownership 74 324 324 247 969
Lennar Ownership 208 0 0 0 208
As noted earlier, the Natomas sub-market has shown sales between 479 and 1,018 sales per annum since 2016. Data for 2015 is based on two quarters and reflects the time period when building commenced in the region after several years of no activity. Sales were at lower levels in the past two years (479 sales in 2022 and 541 in 2023) due to impacts from rising interest rates and inflationary impacts. Absorption considerations for the subject are based on rates for each product type which ranges from 212 to 362 per annum. Year 1 is lower as the 42 remaining lots in phase 1 are a consideration. Still, with limited competition for the subject lots in Natomas, absorption is a reasonable conclusion.
The overall salability of the subject lots in both the short and long term is favorable in the current market climate.
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HIGHEST AND BEST USE
Highest and best use may be defined as that reasonable and prob able use that will support the highest present value as of the effective date of the report. It is al so defined as “the reasonable, probable, and legal use of vacant land or an i mproved property, which is phys ically possible, appropriately supported, financially feasible and that results in the highest value.” E lements integral in the highest and best use analysis include the following:
a. Physical characteristics of the subject property;
b. Location and the immediate environs;
c. Current zoning and municipality planning goals;
d. Neighborhood and area demographic trends;
e. Market supply and demand; and
f. Motivation of the most probable purchaser and/or user.
The highest and best use of a specific parcel of land is not determined through subjective analysis; rather highest and best use is shaped by the competitive forces within the market where the property is located.
Therefore, the analysis and interpretation of highest and best use is an economic study of market forces focused on the subject property. The use that maximizes value represents the highest and best use. In accordance with the definition of highest and best use, it is a ppropriate to analyze the subject site as though vacant, followed by analysis of the existing improvements.
Legally Permissible
The subject property is currently vested for development of the proposed uses identified in this report.
This project identified as P11-083 was approved by the City of Sacramento in 2017 including the following:
1) Certification of the Environmental Impact Report including adop tion of the mitigation monitoring and reporting program;
2) Approval of the Development Agreement;
3) Adoption of the 2017 Greenbriar Financing plan;
4) Resolution Authorizing Building Permits and Multi-Unit Dwellings pursuant to Sacramento City Code Floodplain Management Regulations;
5) Directing the Greenbriar Development Impact Fees to be allocated to the North Natomas Regional Park;
6) Amending the General Plan Land Use and Urban Form Diagram to ch ange land use designations for various parcels consistent with the development project; 7) Amending the zoning of the project;
8) Amending the Planned Unit Development Guidelines;
9) Approving the Mixed-Income Housing Strategy;
10) Approving the tentative map and project design with conditions of approval.
This project is fully vested for development from both a planni ng and environmental viewpoint. The environmental process for Greenbriar began in 2006 and involved t h e p r e p a r a t i o n o f t h e f o l l o w i n g documents that are relevant to the proposed amendments being considered for the project:
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Draft EIR (DEIR) for the Greenbriar Development Project (Volumes I-III), July 2006 Recirculated Draft EIR (RDEIR) for the Greenbriar Development Project (Air Quality; Hydrology, Drainage and Water Quality), November 2006
Second Recirculated Draft EIR (SRDEIR) for the Greenbriar Development Project (Transportation and Circulation), April 2007
Final EIR (FEIR) for the Greenbriar Development Project, August 2007
On September 19, 2007, the Sacramento Local Agency Formation Commission (LAFCo) certified the Final EIR and approved the Sphere of Influence Amendment for the proj ect. In January 2008, the City of Sacramento certified the EIR and approved the Greenbriar Develo pment Project (City of Sacramento 2008). After the City’s approval of the project, LAFCo approved annexation of the proposed project to the City of Sacramento service area boundary in June 2008 (LAFCo 2008).
Applicable Agency Permits secured for this project include the following:
1) California Department of Fish & Wildlife Final Streambed Alt eration Agreement No. 1600- 2013-0224-R2
2) Central Valley Regional Water Control Board Clean Water Act Section 401 permit (WDID #5A35CR00587)
3) Department of the Army Se ction 404 Permit # SPK-2005-00572 4) United States Department of the Interior Fish & Wildlife Ser vice Biological Opinion 5) CDFW Incidental T ake Permit. 2081-2013-059-02
According to Cheryle Hodge with the City of Sacramento Planning D e p a r t m e n t , t h e s u b j e c t p r o j e c t i s conforming with all applicable environmental mitigation. Furthermore, the subject property is a stand- alone project and not subject to the Natomas Basin HCP Fees.
The proposed development of this project is consistent with the overall zoning and General Plan. This project includes an affordable housing component identified as the Mixed-Income Housing Strategy.
Accordingly, the total project is proposed for 2,425 market rate housing units and 339 market rate rental units. The Greenbriar Mixed-Income Housing Strategy provides f or the development of 189 affordable units for seniors (APN 201-0300-180). With the development of this project, designated for residents whose income does not exceed 80% of the AMI for Sacramento County, no further affordable housing is required. The developer of this project receives a fee credit for the construction of this project relative to the 2,425 market rate units identified for the project. The only caveat is that the developer obtains a building permit for this project prior to issuance of 65% of the building permits for the 2,425 market rate units. This equates to 1,576 permits. However, since the build i n g p e r m i t h a s b e e n i s s u e d f o r t h i s component, no restrictions are applicable to the subject property.
Development of the proposed land uses described in this report reflect a legal, permissible use under the current zoning, general plan, and all entitlements are secured for development. This includes the recent approval of the Third Amendment to the Development Agreement. This document calls for the construction of the SVO as part of legally permissible land uses.
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Physically Possible
This criterion considers the physical features of the site such as street frontage, depth, topography, access, soil conditions, utilities, etc. At this point in the analysis the physical characteristics are examined to see if they are suited for the legally permissible uses. Based on physical inspection of the subject properties, there are no known reasons why the properties would not support any use than those consistent with legally permissible land uses.
Financially Feasible/Maximally Productive
As noted in the prior section, the subject property is projecte d to have adequate demand in the current market environment. Financial feasibility depends upon supply and demand influences. With respect to financial feasibility of single-family residential development, in recent months merchant builders have acquired unimproved lots in the Sacramento region for near term construction, and there are multiple active projects in the subject’s immediate area that demonstrat e demand for new homes. Finished lots are transferring at prices that e xceed the sum on unimproved lo ts and site development costs, which indicate completion of site development is financially feasible.
Highest and Best Use (As Vacant) – Conclusion
Based on review of these elements, the highest and best use for the subject property is for near term development. The most probable buyer of the subject residential lots is an investor who would purchase the project in bulk, complete the remaining site improvements, including the SVO, and sell the individual product types to production home builders.
Highest and Best Use (As Improved) – Conclusion
The highest and best use as improved reflects the proposed uses identified in this report. All of the proposed uses are consistent with their highest and best use. The most probable buyer of the subject residential lots is an investor who would purchase the project in bulk, complete the remaining site improvements, including the SVO, and sell the individual product types to production home builders.
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PART 4 – METHODOLOGY AND VALUATION
METHODOLOGY
The valuation process is the orderly program in which the data used to derive an opinion of value for the subject property as it is acquired, classified, analyzed, and p resented. The first step in the process is to define the appraisal problem, i.e., identify the real estate, t he effective date of the value estimate, the property rights being appraised, and the type of value sought. Once this has been accomplished, the appraiser collects and analyzes the factors that affect the mar ket value of the subject property. These factors are addressed in the area and neighborhood analysis, th e site and improvement analysis, the highest and best use analysis, and in the application of the three approaches to value. Appraisers generally use three approaches to value; the Cost Approach, the Sales Com parison Approach, and the Income Approach. The final step in the valuation process is the reconc iliation or correlation of the value indications. In the reconciliation, the appraiser considers the relative applicability of each of the approaches used, examines the range of the value indications, a nd gives most weight to the approach or approaches that appear to produce the most reliable solution to the appraisal problem.
The first step in the appraisal of the subject property is to examine the different value scenarios required for this property under the purpose of this report. In order to derive an opinion of value for this property, all three approaches to value will be considered.
In the Cost Approach, the reproduction or replacement cost of the building and land improvements, as the date of the appraisal, is developed together with an estimate of the losses in value (depreciation) that have taken place due to wear and tear, design and plan, or neig hborhood influences. The depreciated building cost estimate is added to the value of the land. The t otal represents the value indicated by the cost approach. This approach assumes that the site is developed to its highest and best use. It is also a good test of project feasibility in the case of proposed projec t s. Th is app roac h t o valu e is b ase d on a comparison that a prudent investor would pay no more for a prop erty than the amount the investor can obtain a comparable site and construct a building of equal desi rability and utility without undue delay.
This approach is most applicable when a property is new or relatively new, and sufficient comparable land sales are available to support a reasonable conclusion of land value.
In the Sales Comparison Approach, the subject property is compared to similar properties that have been s o l d r e c e n t l y o r f o r w h i c h l i s t i n g p r i c e s o r o f f e r i n g f i g u r e s a r e k n o w n . D a t a f o r g e n e r a l l y c o m p a r a b l e properties are used and comparisons are made to demonstrate a p robable price at which the subject property would sell if offered in the open market. This is a go od indication of value assuming the market data considered is recent and reliable.
In the Income Capitalization Approach, value is based on the present value of the anticipated net income stream from the subject property. Two common techniques are typically utilized, direct capitalization and yield capitalization. In direct capitalization, the current or estimated rental income is projected with deductions for vacancy and collection loss and operating expens es. A conclusion about the prospective net operating income of the property is developed. In support o f this net operating income estimate, operating statements for previous years may be reviewed, togeth er with available operating cost estimates of similar properties. An applicable capitalization m ethod and appropriate capitalization rates are developed for use in computations that lead to an indication of value by the Income Approach. In yield capitalization (or discounted cash flow analysis), the net inco m e s t r e a m i s p r o j e c t e d o v e r a t y p i c a l investment holding period for the property type being appraised , w i t h a r e v e r s i o n a t t h e e n d o f t h e
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holding period. The income strea m and reversion are then discou nted to a present value utilizing a discount rate, typically derived from market analysis and inves tor surveys. In most cases, the Income Approach is considered to be the best method of estimating value for an income producing property.
After an indication of value is achieved in each of the approaches, the applicability and reliability of each approach is then evaluated and weighed by the appraiser. Throug h physical inspection of the property and the appraiser’s analysis, judgment, and experience, a final opinion of value is then made for the subject property.
Subject Property Valuation
The market value of the appraised properties, by ownership, subject to the existing liens will be estimated using the sales comparison approach to value. As noted throughout this report, this value is presented in conjunction with the Hypothetical Condition that all improved properties are available for development t o t h e i r h i g h e s t a n d b e s t u s e . I n a d d i t i o n , t h e e x t r a c t i o n / l and residual methodology will be utilized.
Under this methodology, land value is developed by deducting the construction costs from the proposed revenues in arriving at an estimated value of the finished lots . D i s c o u n t e d c a s h f l o w an a l y s i s f o r t h e determination of lot value was not necessary given the number of lots in each village and relatively short absorption period. The concluded lot values identified by the Sales Comparison Approach and the Income Approach were reconciled in order to provide the finished lot value for each village.
These conclusions are used in developing the overall value by ownership.
For the Lennar Ownership, conclu sions are derived from each of the reported villages and allocated amongst the 208 lots currently owned. In addition, there is added value for these lots as Permits and Fees p a i d a s o f t h e e f f e c t i v e d a t e o f v a l u a t io n , a s w e l l as f o r t h e completed model homes and production homes.
For the Integral component, 969 lots, once the individual values are derived or identified as the aggregate retail value or retail sales proceeds, a discounted cash flow m odel will be performed. Under the discounted cash flow analysis, the expected revenue, absorption period, expenses and discount rate associated with the sell-off of the developable parcels will be utilized. A DCF analysis is a procedure in which a discount rate is applied to a projected revenue stream generated from the sale of individual components of a project. In this method of valuation, the appraiser specifies the quantity, variability, timing and duration of the revenue streams and discounts each t o its present value at a specified yield rate. It provides a conclusion of the value for 969 lots as sold to a single purchaser or investor.
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REVENUE PROJECTIONS – FINISHED LOTS
SALES COMPARISON APPROACH
The Sales Comparison Approach involves a comparison of the subj ect property with other properties which have been sold or have been offered for sale in the open, competitive market. These transactions serve the primary function of providing a unit comparison used to estimate an independent opinion of value by this approach. The reliability of the value estimate depends upon the degree of similarity between the property being appraised and the comparable sales. A d j u s t m e n t s a r e m a d e t o t h e comparable sales to reflect their differences from the subject. The land sales used for comparative purposes are summarized below.
Subject
Sale 6
Sales 2, 3, 7, and 8
Sales 1, 10, and 11
Sales 4, 5, and 9
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TOTAL SALES PRICE BUYER STATUS LOADED
SALE PROPERTY ADDRESS SALES PRICE/LOT SELLER # OF LOTS ANNUAL LEVIES/ SITE COSTS/LOT PRICE PER LOCATION SALE DATE DOCUMENT NO. TYPICAL LOT SIZE (SF) SPECIAL ASSES SMENTS PERMITS/FEES FINISHED LOT Parcel 8, Delta Shores Phase 2 $4,500,000 DS-6 LLC (Signature Hom es) Paper Lots $1,892 per annum $85,436 S. side of Cosumnes River Blvd., N. of Delta Shores Cir. $44,554 M&H Realty LLC 101 Lots $59,546 Sacramento, CA 95832 March 21, 2024 20240321/0825 1,612 SF Broadstone Estates $14,400,000 Woodside 05N, LP Finished Lots $3,21 5 per annum $0 N/S side of Dewey Oak Dr., S. of Highway 50 $360,000 Elliott Hom e s, Inc. 40 L ots $110,000 Folsom, CA 95630 November 20, 2023 20231120/0343 10,200 SF Broadstone Estates $14,760,000 Shawood Communities LLC Finished Lo ts $3,215 per annum $0 N/S side of Dehone Circle $360,000 Elliott Hom e s, Inc. 41 L ots $110,000 Folsom, CA 95630 November 20, 2023 20231120/0345 10,200 SF Amoruso Ranch - Phase 1, Subphase A1 $28,980,000 Richmond America n Homes Finished Lots $3,150 per annum In Price S. Side of Amoruso Ranch Road $210,000 Brookfield Sacramento Holdings 138 Lots $93,000 Roseville, CA 95747 December 14, 2023 2023-0067641 6,000 SF Amoruso Ranch - Phase 1, Subphase A1 $33,798,500 DR Horton CA2, Inc. Finished Lots $3,150 per annum In Price S. Side of Amoruso Ranch Road $176,034 Brookfield Sacramento Holdings 192 Lots $93,000 Roseville, CA 95747 December 28, 2023 2023-0069641 4,500 SF Monte le na (V illage s 5, 7 & 8) $27,531,000 Monte le na De ve lopm e nt LLC Finished Lots $3,032 per annum In Price SWC of Douglas Road & Montelena Drive $151,269 MDRE Development LLC 182 Lots $84,000 Rancho Cordova, 95742 July 27, 2023 20230727/0140 4,060 SF 4 $303,000
Comments: This transaction represents the purchase of 138 finished lots in Amoruso Ranch by Richmond American Homes. The property in clude s 138 finishe d lots with a typical size at 6,000 square feet. It includes special assessments identifi ed at $3,150 per annum and assumed with the finished lots. Perm its and fees noted at $93,000 per unit. 5 $269,034Comments: This transaction represents the purchase of 192 finished lots in Amoruso Ranch by DR Horton. The property includes 192 finish ed lots with a typical size at 4,500 square feet. Thi s i s based on a wei ghted average as i t i ncl udes 2 vi l lages with lots at 3,200 square feet, and 5,000 square feet, res pectively. It includes special assessments identified at $3,15 0 per annum and assumed with the finished lots. Permits and fees noted at $93,000 per unit. 6 $235,269Comments: This transaction represents the July 2023 acquisition of 182 finished lots in the Montelena Community in the City of Rancho Cordova. It was an all cash sale for $151,269 per finished lot. Permits and fees are identified at $84,000 per unit and included in the loaded unit price at $235,269 per finishe d lot. L ots we re within three village s with a we ighte d average l ot si ze at 4,060 SF. Speci al assessments are noted at $3,032 per lot, per annum. 3 $470,000
Comments: This transaction re pre sents the purchase of 41 finishe d lots in Broadstone Estates by Shawood Communities. In addition to t his transaction, an affiliate d com pany with the buyer, Woodside Homes purchased the adjacent 40 lots as part of thi s transacti on. However, separate deeds were recorded, and each project i s i denti fi ed for the devel opment of diffe rent product line s. The prope rty include s 41 finishe d lots with a typical size at 10,200 square feet, near project aver ages. It includes special assessments identified at $3,215 per annum and assumed with the finished lots. Permits and fees rep orted at $110,000 per unit. Proposed homes are identified bet ween 2,996 and 4,359 square feet. Pri ci ng has yet to be de te rmine d, but will be in e xce ss of $1.2 m illion. 1 $189,536Comments: This transaction represents the purchase of 101 lots within D elta Shores by Signature Homes. The property includes 101 propo sed lots, with a typical lot size at 1,612 square feet (26’ x 62’). It includes special assessments identi fied at $1,892 per annum and assumed with the finished lots. S ite de ve lopm e nt costs, including profit ide ntified at $85,436 per lot, whereas permits and fees reported at $59,546 per unit. Developer is proposing attached construction (duet and 3-plex ) with homes ranging in size from approximately 1,600 to 2,000 square feet with pricing starting in the mid $500s. 2 $470,000Comments: This transaction re pre sents the purchase of 40 finishe d lots in Broadstone Estates by Woodside Homes. In addition to this transaction, an affiliate d com pany with Woodside Homes, or Shawood Communities LLC, purchased the adjac ent 41 lots as part of this transaction. However, separate dee ds were recorded, and each project i s i denti fi ed for the devel opment of di fferent product l i nes. The property i ncludes 40 finished lots with a typical size at 10,200 square feet , near project averages. It includes special assessments identified at $3,215 per annum and assumed with the finished lo ts. Permits and fees noted at $110,000 per unit. Proposed hom es are identified between 2,616 and 3,952 square feet. $
Smith & Associates, Inc.
TOTAL SALES PRICE BUYER STATUS LOADED
SALE PROPERTY ADDRESS SALES PRICE/LOT SELLER # OF LOTS ANNUAL LEVIES/ SITE COSTS/LOT PRICE PER LOCATION SALE DATE DOCUMENT NO. TYPICAL LOT SIZE (SF) SPECIAL ASSES SMENTS PERMITS/FEES FINISHED LOT Mangini Ranch - Phase 1C (Village s 1-3) $22,650,000 Tri Pointe Holdings, Inc. Finished L ots $2,522 pe r annum In Price NWQ of Mangini Parkway and Savannah Parkway $128,693 Arcadian Improvement Company 176 Lots $51,600 Folsom, CA 95630 June 12, 2023 20230612/0482 3,292 SF
Mangini Ranch - Phase 1C (Village 4) $17,000,000 L e nnar Hom e s of California Finished Lots $2,522 per annum In Price NWQ of White Rock Road and Savannah Parkway $147,826 Arcadian Improvement Company 115 Lots $51,600 Folsom, CA 95630 July 18, 2023 20230718/0923 3,300 SF
Winding Cre e k (C-21) $9,047,500 Winding Cre e k C-21 (Rose ville L P) Finished Lots $2,448 per annum In Price S. side of Vibrant Drive at Shady Tree Circle $117,500 Anthem United 77 Lots $86,286 Roseville, CA 95747 April 20, 2023 2023-0020655 3,000 SF MDR-1, LDR-1 (Delta Shores West) $12,484,436 KB Homes Paper Lots $1 ,963 per annum $132,229 S. side of Cosumnes River Blvd., W. of I-5 $65,364 M&H Realty LLC 192 Lots $48,640 Sacramento, CA 95832 April 29, 2022 20220429-0746 3,833 SF MDR-8A - Delta Shores $3,825,000 Signature Homes Paper Lots $1,780 per annum $84,036 S. side of Cosumnes River Blvd. $50,329 M&H Realty LLC 76 Lots $64,000 Sacramento, CA 95832 June 30, 2022 20220630/1103 3,116 SF Greenbriar CFD NO. 2018-3, IA #2 Assumed Finished $2,741 per an num Assumed Finished Single-Family Residential Component Benchmark Village 100 Lots $29,209 Sacramento, CA 4,500 SF
Comments: This transaction represents the July 2023 acquisition of 115 f inishe d lots in Folsom Ranch in the City of Folsom . It was an all cash sale for $147,826 pe r finishe d lot.
Permits and fees identified at $51,600 per unit. Deal points w ere structured i n 3Q 2022 and i ncl udes profi t parti ci pati on to the seller upon close of escrow of the homes. This is i denti fi ed at 30% of the home pri ce, l ess the i ni ti al payment at $147,826 per lot. This PAPA is capped at $71,300 per lot. Special assessments are noted at $2,522 per lot, per annum. 11 $198,365Comments: This transaction represents the June 2022 closing of MDR-8A w i thi n Del ta Shores by Si gnature Homes. The property i ncl udes 76 proposed lots, with a minimum lot size of 3,116 s quare feet. The property went i nto contract i n September, 2021. It includes special assessments identified at $1,779.90 per annum and assumed with the finished lots. Site development costs, including profit identified at $84,036 per l ot, whereas permi ts and fees reported at $64,000 per uni t.
SP
8 $199,426
9 $203,786Comments: This transaction re pre se nts the A pril 2023 acquisition of 77 finished lots in the Winding Creek Community in the City of Rose ville . It was an all cash sale for $117,500 pe r finished lot. Permits and fees are identified at $86,286 per unit and included in the loaded unit price at $203,786 per fini shed lot. Lots are smaller lots typically 3,000 square feet.
Special assessments are noted at $2,448 per lot, per annum. 10 $246,233Comments: This transaction represents the purchase of MDR-1 and LDR-2 wi thin Delta Shores West by KB Homes. The property includes 192 p ropose d lots, with m inim um lot size s of 2,975 and 5,000 square feet, respecti vel y. The wei ghted average l ot si ze i s i denti fi ed at 3,833 square feet. It i ncl udes special asse ssm e nts ide ntifie d at $1,962.88 pe r annum (ble nde d) and assum e d with the finishe d lots. Site de ve lopm ent costs, including profit ide ntifie d at $132,229 pe r lot, whe re as pe rm its and fees reported at $48,640 per uni t. 7 $180,293Comments: This transaction re pre sents the June 2023 acquisition of 176 finished lots in Folsom Ranch in the City of Folsom. It was a n all cash sale for $128,693 pe r finishe d lot.
Pe rm its and fe e s ide ntifie d at $51,600 pe r unit. Tri Pointe purchase d Village 1-3, with pricing identifie d at $100,000 pe r lot for V illage 1, and $144,000 pe r lot for Village s 2-3 for total price of $22,650,000. Deal points were structured in 3Q 2022 and include s profit participation to the se lle r upon close of escrow of the homes. Seller anticipates an additional $10,000 to $30,000 per lot for this element. Special assessmen ts are noted at $2,522 per lot, per annum.
Smith & Associates, Inc.
APPLICATION OF ADJUSTMENTS
Prior to adjustments, the comparable sales ranged from $180,293 to $470,000 per fully loaded finished lot. The comparable sales are analyzed on this basis, and once the opinion of value is noted the permits and fees for this project are deducted from the opinion of valu e in order to develop a final opinion of value for the subject property. Once the value is identified, t he values for each individual area can be developed based on lot size. The analysis of the sales compari son approach is predicated on a “benchmark” village for the subject property. This has been id entified as the 4,500-square foot lot type with a hypothetical size of 100 lots. The following is a discu ssion of the adjustments made to the comparable sales.
Property Rights Conveyed
The comparable sales represent conveyance of the fee simple estate. No adjustments are necessary.
Financing
The comparable sales represent all cash transactions or their equivalent. No adjustments are necessary.
Condition of Sale
All of the properties presented for comparison are arm’s length transactions. No adjustments are noted for the sales.
Market Conditions
If property values have appreciated or depreciated over time, t he appropriate adjustment is required.
The comparable sales range fro m April 2022 to current transacti o n s . T h e y r e f l e c t t h e m o s t r e c e n t transactions, and most were transacted subsequent to the increa se in interest rates starting in 2022. In order to isolate any adjustment for market conditions, trends in pricing are analyzed. This is examined using The Gregory Group for new home pricing changes. The table below summarizes home prices in the entire region, Sacramento County, as well as the Natomas Submarket since 2022. It is based on 2 nd quarter
comparisons for each year.
According to information identified by The Gregory Group, home pricing in the entire region has declined
1.8% since 2022 (Based on 2Q comparisons). This is higher on average for Sacramento County at 6.5%, with the Natomas submarket reflecting an overall change at 5.2%. In the second quarter of 2022, interest rates were still at low levels with rising rates thereafter. Toward the end of 2023, there was some stability in rates and pricing began to climb. As of 2Q 2024, pricing is trending upward toward levels identified in 2Q 2022. This is identified in changes over the past year from 1.7% to 3.2%.
# OF AVERAGE AVERAGE # OF AVERAGE AVERAGE # OF AVERAGE AVERAGE YEAR PROJECTS PRICE (NET) SIZE (SF) $/SF PROJECTS PRICE (NET) SIZE (SF) $/SF PROJECTS PRICE (NET) SIZE (SF) $/SF 2024 215 $734,952 2,418 $303.95 112 $678,964 2,330 $291.40 9 $647,884 2,455 $263.90 2023 206 $717,759 2,437 $294.53 103 $681,261 2,378 $286.48 14 $640,611 2,433 $263.30 2022 208 $733,911 2,372 $309.41 98 $725,423 2,328 $311.61 16 $658,480 2,365 $278.43 -1.8% -6.5% -5.2%
Compounded Annual Change (2022-2024) -0.6% -2.2% -1.8%
3.2% 1.7% 0.2%
SACRAMENTO REGION (4-County) SACRAMENTO COUNTY
Total Change 2022-2024 ($/SF)
Total Change 2023-2024 ($/SF)
NATOMAS SUB-MARKET
Smith & Associates, Inc.
Changes in pricing for these regions in the past year are identified as follows.
Information for the Sacramento region and Sacramento County sho ws level increases in pricing over the past year. Homes prices are trending in Natomas, but lagging b ehind these two regions with reduced pricing since 3Q 2023, but up 4.1% from levels noted in 1Q 2024. However, this is a byproduct of minimal projects offering homes on the market and the short-term supply of lots.
In addition, data compiled from the California Association of Realtors is identified. The following changes are identified in home pricing since July 2023.
Pricing characteristics are noted above since July 2023. Overall pricing has trended upward in 2024. Rising interest rates and inflation caught up to the housing market in the latter half of 2022 with some signs of recovery seen in 2023 and into 2024. With stability in interes t rates, coupled with lack of inventory for resale homes, new home sales have captured buyers and builders have been able to raise pricing. The subject property is located in Sacramento County. It shows pricing is up 4.5% over the past 12 months.
The adjustment for market conditions is two-fold. Pricing in th e region deteriorated from April 2022 to March 2023. Recognizing the reduced pricing, increasing concessions, caused by rising interest rates, downward adjustments of 6% are noted for this element. Exclud ing sales 10 and 11, the comparable transactions were from April 2023 to March 2024. No adjustmen ts are noted for these sales as they demonstrate parallel market conditions to those identified for the subject property as of the effective d a t e o f v a l u a t i o n . A s s u c h , o n l y d o w n w a r d a d j u s t m e n t s o f 6 % a r e n o t e d f o r s a l e s 1 0 a n d 1 1 . T h i s adjustment is noted as follows. This adjustments is applied to the land components only and excludes fees and permits.
# OF AVERAGE AVERAGE # OF AVERAGE AVERAGE # OF AVERAGE AVERAGE QTR. PROJECTS PRICE (NET) SIZE (SF) $/SF PROJECTS PRICE (NET) SIZE (SF) $/SF PROJECTS PRICE (NET) SIZE (SF) $/SF 2Q 24 215 $734,952 2,418 $303.95 112 $678,964 2,330 $291.40 9 $647,884 2,455 $263.90 1Q 24 218 $727,824 2,440 $298.29 111 $675,135 2,365 $285.47 10 $636,019 2,508 $253.60 4Q 23 208 $716,182 2,417 $296.31 112 $677,919 2,370 $286.04 12 $670,421 2,519 $266.15 3Q 23 210 $722,077 2,450 $294.73 107 $680,855 2,392 $284.64 13 $659,527 2,482 $265.72
3.1% 2.4% -0.7%
1.9% 2.1% 4.1%
SACRAMENTO REGION (4-County) SACRAMENTO COUNTY NATOMAS SUB-MARKET Total Change 3Q23-2Q24 ($/SF)
Total Change 1Q24-2Q24 ($/SF)
MON-YR. CA EL DORADO PLACER SACRAMENTO YOLO
July-23 $832,340 $650,000 $660,000 $547,000 $625,000
August-23 $859,800 $657,000 $669,000 $535,000 $622,500
September-23 $843,340 $685,000 $665,000 $545,000 $608,640 October-23 $840,360 $660,000 $685,000 $550,000 $629,900 November-23 $822,200 $650,000 $659,000 $522,290 $620,000 December-23 $819,740 $660,000 $633,020 $535,000 $630,000 January-24 $788,940 $650,000 $620,000 $515,000 $600,360 February-24 $806,490 $647,500 $650,000 $530,000 $918,940 March-24 $854,490 $677,000 $659,000 $530,000 $635,830
April-24 $904,910 $757,000 $671,740 $548,580 $615,000
May-24 $908,040 $699,000 $675,000 $555,000 $653,980
June-24 $900,720 $709,000 $685,000 $560,000 $649,500
July-24 $886,560 $695,000 $670,000 $560,000 $610,000
August-24 $888,740 $650,000 $675,000 $559,000 $620,960
Smith & Associates, Inc.
ITEM COMP 10 COMP 11
Land Price $65,364 $50,329
Site Costs $132,228 $84,036
Finished Lot Indicator $197,593 $134,365
Transaction Date 4-2022 6-2022
Adjustment to Current (6%) (6%)
$ ADJUSTMENT
ROUNDED
($11,856)
($11,900)
($8,062)
($8,100)
Location
The location adjustment is oriented towards the concept that st ructures located in areas perceived as more desirable due to a number of factors, including accessibility, frontage, and land prices, may achieve a higher price. The subject property is deemed to have a good location in the Natomas sub-market in the City of Sacramento. The comparable sales are located throughout the region based on the built-up nature of the immediate area and the overall general characteristics of the new home market. Still, location adjustments are required to these sales and the best overall comparison is from analysis of projects in the immediate area to those from the sub-markets for the comparable sales.
The comparable sales were derived from Folsom, Laguna, Roseville, and Rancho Cordova. There were no recent transactions in Natomas viewed as comparable to the subj ect’s location. Information from The Gregory Group 2
nd Quarter 2024 for these various sub-markets are illustrated as follows. All prices are net of concessions.
SUBMARKET
AVERAGE NET
PRICE SIZE (SF) PRICE/SF
Natomas $647,884 2,455 $263.90
Roseville $700,662 2,372 $295.39
Folsom $786,134 2,418 $325.12
Rancho Cordova $647,079 2,367 $273.38
Laguna $686,955 2,330 $294.83
Information for Natomas is based on all projects. As noted in the market analysis section, pricing for the subject is from $242 to $321 per square foot, with overall proj ect averages near $266 per square foot.
For this analysis, projects from Rancho Cordova and Laguna do n ot require any adjustments. Sales 1, 10, and 11 are from the Delta Shores project, which offers a similar location to the subject. Based on overall comparisons noted above, Roseville pricing is approximately 9.5% higher than Natomas, whereas Folsom is 17.8% higher than Natomas. F or this analysis, downward adju s t m e n t s o f 1 0 % a r e a p p l i e d f o r t h e Roseville locations (Sales 4, 5, 9), whereas Folsom is adjusted downward 12% (Sales 2, 3, 7, 8). Adjustments for this analysis are predicated on the land component only (Excluding Fees) and are calculated as follows.
ITEM SALES 2&3 SALE 4 SALE 5 SALE 7 SALE 8 SALE 9
Land Price $360,000 $210,000 $176,034 $128,693 $147,826 $117,500 S i t e C o s t s $ 0$ 0$ 0$ 0$ 0 $ 0
Market Conditions Adj. ($0) ($0) ($0) ($0) ($0) $0
Finished Lot Indicator $360,000 $210,000 $176,034 $128,693 $147,726 $117,500 Location Adjustment (15%) (10%) (10%) (15%) (15%) (10%)
TOTAL ADJUSTMENT
ROUNDED
($54,000)
($54,000)
($21,000)
($21,000)
($17,603)
($17,600)
($19,303)
($19,300)
($22,159)
($22,200)
($11,750)
($11,500)
Smith & Associates, Inc.
Number of Lots
The adjustments applied to the comparable sales are based on th e inclusion of 100 potential lots for the “benchmark” village. The comparable sales include transactions from 40 to 192 lots. Sales 2 and 3 are at the lower end of the range from 40 to 41 lots. However, it wa s identified that both of these sites were negotiated in one transaction. They included separate recordi ng references as they both will effectively b e d e v e l o p e d b y W o o d s i d e H o m e s . S h a w o o d C o m m u n i t i e s i s a s u b sidiary of Woodside Homes. The transactions with higher number of lots include purchases for m ultiple product lines. No adjustments were applied for this element.
Typical Lot Size
The benchmark village includes a typical lot size at 4,500 square feet. The comparable sales range in size from 3,000 to 5,775 square feet. Adjustments for this analysis were based on $12.00 per square foot.
With increased demand for residential lots this adjustment is widening.
Annual CFDs
The subject property includes proposed CFDs at $2,741 per annum. This is based on the weighted average for the subject project. The comparable sales noted in this rep ort include slightly various CFDs and adjustments are noted for these transactions. Effectively, the higher level of special assessments lowers purchasing power for potential buyers and projects lacking spec ial assessments can offer higher pricing.
This adjustment is predicated on the actual payment over a 7-ye ar holding period at 6%. Adjustments are noted as follows. It is noted that no adjustments are applicable for comparable sales 7-9.
ITEM SALE 1 SALES 2/3 SALES 4/5 SALE 6 SALE 10 SALE 11
Annual CFD’s $1,892 $3,215 $3,150 $3,032 $1,963 $1,780
Subject CFD’s $2,741 $2,741 $2,741 $2,741 $2,741 $2,741 Variance $849 $474 $409 $291 $778 $961
PV Factor (1) 5.582 5.582 5.582 5.582 5.582 5.582
ADJUSTMENT
ROUNDED
($5,297)
($5,300)
$2,646
$2,700
$2,283
$2,300
$1,624
$1,600
($4,343)
($4,300)
($5,364)
($5,400)
(1) PV factor reflects the PV of $1 for 7 years at 6%
Please refer to the following adjustment grid for a summary of the adjustments.
Smith & Associates, Inc.
ELEMENTS OF COMPARISON SUBJECT 1 2 3 4 5 6 7 8 9 10 11
Indicated Price per Lot (Loaded) $189,536 $470,000 $470,000 $303,00 0 $269,034 $235,269 $180,293 $199,426 $203,786 $246,266 $198,365 Property Rights C onv ey ed Fee Simple Fee Simple Fee Simple Fee Simpl e Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Fe e Simple Fee Simple - A d j u s t m e n t $ 0$ 0$ 0$ 0$ 0$ 0$ 0$ 0$ 0$ 0$ 0 -Adjus ted Bas e $189,536 $470,000 $470,000 $303,000 $269,034 $235,269 $ 180,293 $199,426 $203,786 $246,266 $198,365 Financing Terms Cash Cash Equiv. Cash Equiv. Cash Equiv. Cash Equiv. Cash Equiv. Cash Equiv. Cash Equiv. Cash Equiv. Cash Equiv. Cash Equiv. Cash Equiv. - A d j u s t m e n t $ 0$ 0$ 0$ 0$ 0$ 0$ 0$ 0$ 0$ 0$ 0 -Adjus ted Bas e $189,536 $470,000 $470,000 $303,000 $269,034 $235,269 $ 180,293 $199,426 $203,786 $246,266 $198,365 C onditions of Sale Ar ms-Length Similar Similar Similar Similar Simila r Similar Similar Similar Similar Similar Similar - A d j u s t m e n t $ 0$ 0$ 0$ 0$ 0$ 0$ 0$ 0$ 0$ 0$ 0 -Adjus ted Bas e $189,536 $470,000 $470,000 $303,000 $269,034 $235,269 $ 180,293 $199,426 $203,786 $246,266 $198,365 Market Conditions Sep-24 Mar-24 Nov-23 Nov-23 Dec-23 Dec-23 Jul-23 Jun-23 Jul-23 Apr-23 Apr-22 Jun-22 -Adjus tment $0 $0 $0 $0 $0 $0 $0 $0 $0 -$11,900 -$8,100 -Adjus ted Bas e $189,536 $470,000 $470,000 $303,000 $269,034 $235,269 $180,293 $199,426 $203,786 $234,366 $190,265 Adjusted Price per Lot (Loaded) $189,536 $470,000 $470,000 $303,000 $269,034 $235,269 $180,293 $199,426 $203,786 $234,366 $190,265 Phys ical Cha racteri s tics
Loc ation Good Similar Super ior Super ior Super ior Super ior Similar Super ior Super ior Super ior Similar Similar -Adjustment -$ (54,000)$ (54,000) $ (21,000) $ (17,600)$ - $ (19,300)$ (22,200) $ (11,500)$ - $ - $ Number of Lots 100 Lots 101 Lots 40 Lots 41 Lots 138 Lots 192 Lots 182 Lots 176 Lots 115 Lots 77 Lots 192 Lots 77 Lots -Adjustment "Benchmark" -$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ Typical Lot Size 4,500 SF 1,612 SF 10,200 SF 10,200 SF 6,000 SF 4,50 0 SF 4,060 SF 3,292 SF 3,300 SF 3,000 SF 3,833 SF 3,116 SF -Adjustment 34,700$ (68,400)$ (68,400) $ (18,000)$ - $ 5,280 $ 15,000 $ 14,400 $ 18,000 $ 8,000 $ 16,600 $ Annual Special Taxes $2,741/Yr. $1,892/Yr. $3,215/Yr. $3,215/Yr. $3,150/Yr. $3,150/Yr. $3,032/Yr. $2,522/Yr. $2,522/Yr. $2,448/Yr. $1,963 /Yr. $1,780/Yr. -Adjustment (5,300)$ 2,700 $ 2,700 $ 2,300 $ 2,300 $ 1,600 $ - $ - $ - $ (4,300) $ (5,400) $ Net Adjustment 29,400$ (119,700)$ (119,700) $ (36,700) $ (15,300)$ 6,880$ (4,300) $ (7,800) $ 6,500 $ 3,700 $ 11,200 $ Indicated Price per Lot (Loaded) $218,936 $350,300 $350,300 $266,30 0 $253,734 $242,149 $175,993 $191,626 $210,286 $238,066 $201,465
Smith & Associates, Inc.
Conclusion – Sales Comparison Approach
The eleven transactions demonstrate an adjusted price per finished lot range from $175,993 to $350,300 per lot, including fees. They reflect the most applicable sales for comparison. As noted, land transactions are scarce in this environment with rising interest rates and o verall inflationary environment. All of the transactions in the overall validity in deriving the “benchmark” value. They demonstrate a mean (Average) price per finished lot at $245,378 with an overall median price per finished lot at $238,066. Elements considered in deriving the overall “benchmark” value include the following:
Overall location setting in a master planned community with numerous amenities. Home s i t e w i t h l a k e f r o n t a g e a r e a n e n h a n c e m e n t t o t h e o v e r a l l p r o j e c t a l o n g w i t h w a l k i n g trails, community center and project wide amenities. This elem ent is factored into the overall conclusion.
P r e m i e r d e v e l o p m e n t s i t e f o r t h e N a t o m a s s u b - m a r k e t , a s w e l l a s t h e e n t i r e r e g i o n .
Orientation of this project is well located in close proximity t o M e t r o A i r P a r k a n d i s desirable site in Natomas. Most new development sites in Nato mas configured on infill locations.
Detached lots are desired in Natomas and the entire region.
Minimal competition for the subject lots in the short-run.
B a s e d o n r e v i e w o f t h e s e e l e m e n t s , a s w e l l a s t h e o v e r a l l n a t u re of the adjustments applied to the comparable sales, the “benchmark” lot value is identified at $230,000 per lot.
The next step is to isolate the various villages for the subjec t. Refinements for each specific project is applied for the lot size and adjustments are similar to that in the prior section. In addition, the permits and fees for each village are deducted from the overall totals in order to derive an opinion of value as finished lots. These calculations are noted on the following table.
While the Crestvue lots are slightly larger than the benchmark lot size, no adjusted could be quantified for the additional lot size.
MINIMUM BENCHMARK BENCHMARK ADJUSTMENT ADJUSTED LESS NET FINSIHED
PRODUCT TYPE LOT SIZE (SF) VALUE LOT SIZE LOT SIZE VALUE PERMITS & FE ES LOT VALUE ROUNDED Shor 2,788 SF $230,000 4,500 SF ($20,544) $209,456 ($24,572) $184,884 $185,000 Lakelet 3,690 SF $230,000 4,500 SF ($9,720) $220,280 ($26,153) $194,127 $195,000 Watersyde 4,000 SF $230,000 4,500 SF ($6,000) $224,000 ($28,174) $195,826 $195,000 Wavmor 4,500 SF $230,000 4,500 SF $0 $230,000 ($27,685) $202,315 $202,000 Crestvue 4,675 SF $230,000 4,500 SF $0 $230,000 ($28,105) $201,895 $202,000 Bleau 5,000 SF $230,000 4,500 SF $6,000 $236,000 ($29,245) $206,755 $207,000 Drifton 5,500 SF $230,000 4,500 SF $12,000 $242,000 ($30,638) $211,362 $212,000 V14/20 3,690 SF $230,000 4,500 SF ($9,720) $220,280 ($42,335) $177,945 $178,000
Smith & Associates, Inc.
INCOME APPROACH
The income approach involves discounting the retail value of the finished production units and discounts them at an appropriate rate over time. Elements considered in this model include all costs of development of these homes including construction costs, taxes over the holding period, sales, and marketing costs, overhead, as well as an allowance for entrepre neurship. These net revenues are discounted to a present value in order to develop an overall va lue for the finished lots. This value is presented in conjunction with the hypothetical condition that s ite improvements are completed to this project as of the effective date of valuation.
Valuation for the finished lots was identified utilizing two me thods including extraction based on static methodology and discounted cash flow analysis.
EXTRACTION METHOD
The extraction method is also processed for this analysis. The subject project includes various lot sizes, and the extraction method is applicable for each product type. Under this methodology, land value is developed by deducting the construction costs and all costs for the construction of homes from the proposed revenues in arriving at an estimated value of the finished lots.
REVENUE
Revenue is generated from the sa le of completed homes, lot prem iums and model home recapture (if any). Project revenues are based on the typical product that meets the highest and best use criteria for the subject project relative to the market area. The following table summarizes the price points for the individual villages identified for review. This is based on the net pricing which is after concessions.
Revenue projections are based on a typical village for each product line at 100 units. Given this smaller number of units for each village, no trending or inflationary e xpenses are identified as the results of the extraction method are based on static conditions.
Lot premiums for the overall calculation of the extraction meth od are based on lots with lake frontage.
This premium is calculated based on $60,000 per lot for this amenity. This element is based on review of comparable project with similar amenities in Northern Californi a. The following table shows the overall premium for each product line re lative to the total number of lots in order to isolate the contributory value of the premium on an overall basis.
MIN AVERAGE AVERAGE
PROJECT LOT SIZE (SF) BASE PRICE (NET) SIZE (SF) PRICE/SF Shor 2,768 SF $570,240 1,982 $288
Lakelet 3,690 SF $619,657 2,233 $277
Watersyde 4,000 SF $681,190 2,650 $257
Wavmor 4,500 SF $652,990 2,484 $263
Crestvue 4,675 SF $679,590 2,557 $266
Bleau 5,000 SF $751,823 2,923 $257
Drifton 5,500 SF $735,657 3,037 $242
V14/20 3,690 SF $528,740 1,640 $322
TOTALS 4,099 SF $643,455 2,387 $270
Smith & Associates, Inc.
The total lot premiums identified for the overall location adja cent to the lake front are identified at $6,900,000 or $5,862 per lot.
Model Home Recapture
Based on the number of lots, it is projected that each product line would require model homes. This is based on three model homes allocated for each product line. Mo del upgrade expenses can vary widely depending upon the construction quality, targeted market, and anticipated length of time on the market.
These upgrades, exterior and interior, including furniture, can range from $25,000 per model to over $250,000 per model. For purposes of calculations, model upgrades are identified at $150,000 per model.
This estimate includes $60,000 per model for upgrades, $20,000 per model in personal property/furniture, $10,000 per model for sales office construction/conversion cost s, and $60,000 for landscaping, including rear yards. This is applied for the Shor, Lakelet, Watersyde, Wavmor, Crestvue, and V14/20 product lines.
Model upgrade costs for the Bleau and Drifton projects are base d o n a t o t a l m o d e l u p g r a d e c o s t o f $200,000 per model. The overall variance is due to increased upgrades in these p rojects based on the overall price-points.
When the model homes are sold, the developer will recapture a p ortion of the expenses associated with the installation of premium upgrades in the model units. Model upgrades are based on all costs associated with model development – landscaping, upgrades, furniture, fixtures, and sales office set-up. Although not considered real estate, furniture is a real cost of tract development. To omit furniture would overstate land value. The model upgrades are a fixed expense, and the number of models provided is based on the typical project size and market conditions. Builders typically recapture around 30% to 50% of model expenses. The difference between model costs and recapture upg rades reflects furniture costs (not real estate), upgrade depreciation and obsolescence, and sales offic e conversion costs. For this analysis, model home recapture is identified at 40% of model costs for each product line.
It is noted that upgrades for the production homes are not incl uded in this analysis. These additional revenues are often buyer preference. While the absorption stud y provided for review in preparation of this assignment identifies typical upgrades, they are excluded from this analysis.
MIN PREMIUM AVERAGE TOTAL PER
PROJECT NAME # OF LOTS LOT SIZE (SF) LOTS PREMIUM PREMIUM LOT (TOTAL) Shor 193 2,788 SF 0 $60,000 $0 $0
Lakelet 173 3,690 SF 0 $60,000 $0 $0
Watersyde 153 4,000 SF 28 $60,000 $1,680,000 $10,980
Wavmor 163 4,500 SF 19 $60,000 $1,140,000 $6,994
Crestvue 138 4,675 SF 15 $60,000 $900,000 $6,522
Bleau 110 5,000 SF 40 $60,000 $2,400,000 $21,818
Drifton 108 5,500 SF 13 $60,000 $780,000 $7,222
V14/20 139 3,690 SF 0 $60,000 $0 $0
PROJECT 1,177 4,594 SF 115 $6,900,000 $5,862
Smith & Associates, Inc.
Expenses
The holding and selling costs typically associated with a devel opment where home construction is completed are summarized as follows.
Sales Commissions, Closing Costs and Warranty expenses are typically non-financeable and paid at the time of closing. Sales commissions include both internal commi ssions and broker co-op. These are projected at 3% of gross revenue. Closing, title, and escrow f ees are at 0.25% of gross revenue, whereas warranty expenses are 1.0% of gross revenue.
Direct Construction Costs p e r t a i n t h e l a b o r a n d m a t e r i a l t o b u i l d t h e p r o j e c t . D i r e c t construction generally costs range from $80 to $105 per square foot. Cost comparables from other projects in the region over the past two years are summarized as follows.
These projects show direct construction costs from $80.24 to $1 06.40 per square foot. The overall costs for the subject are applied at $90 to $100 per square foot. T he weighted average construction costs for the project in its entirety are $94.66 per square foot, general ly consistent with the projects identified above. Based on the varying size and price points for this project, direct construction costs are applied as follows.
DEVELOPER # OF AVG. AVG. AVG. DIRECT
TYPE DATE UNITS HOME SIZE (SF) LOT SIZE (SF) COSTS/SF
Regional 2024 50+ 1,706 6,100 $106.40
Regional 2024 80+ 1,910 2,640 $105.20
Regional 2024 50+ 2,428 4,725 $103.37
Regional 2024 50+ 1,389 4,875 $100.00
Regional 2024 40+ 2,035 3,500 $102.00
Regional 2024 80+ 1,499 4,500 $93.66
Regional 2024 100+ 1,529 2,412 $94.58
Regional 2024 100+ 1,791 2,400 $102.90
Regional 2024 50+ 2,242 3,000 $101.67
Regional 2023 60+ 1,691 4,500 $95.53
Regional 2023 80+ 2,271 5,500 $91.79
Regional 2023 60+ 1,815 5,000 $89.61
Regional 2023 50+ 1,738 4,000 $88.39
Regional 2023 100+ 1,551 4,250 $95.50
Regional 2023 200+ 2,834 6,000 $84.64
Regional 2023 70+ 2,818 4,590 $80.24
AVERAGES 1,953 $95.97
Smith & Associates, Inc.
Changes in Expenses (Expen se Increases or Decreases) is not warranted given the absorption period projection for each hypothetical village.
Building Permits and Fees are based on actual projections provided for review. They reflect net fees after consideration of credits as noted in the eligible facilities. These costs are summarized as follows.
General and Administrative costs include all salaries for internal professionals (construction supervisors, support staff, etc.) and office overhead and supplies. This estimate is identified at 3% of gross proceeds.
Marketing Costs are projected at 1.25% of gross proceeds.
Other Indirect Costs are the costs and fees incurred in developing the project and during the construction cycle, which may include architectural and engineering, insuran ce/bonds, common costs, field overhead and project coordinator fees. These costs are projected at 5% of gross proceeds.
Real Estate Taxes are estimated based on the cu rrent tax rate at 1.1438% and appl ied to the estimated v a l u e v i a e x t r a c t i o n . B a s e d o n t h e o v e r a l l c a l c u l a t i o n s o n v a lue identified for each product area, the allocation of taxes is calculated as follows.
MIN AVERAGE DIRECT TOTAL
PROJECT NAME # OF LOTSLOT SIZE (SF) SIZE (SF) COSTS/SF COSTS Shor 193 2,788 SF 1,982 $95 $188,290
Lakelet 173 3,690 SF 2,233 $95 $212,135
Watersyde 153 4,000 SF 2,650 $95 $251,750
Wavmor 163 4,500 SF 2,484 $95 $235,980
Crestvue 138 4,675 SF 2,557 $95 $242,915
Bleau 110 5,000 SF 2,923 $90 $263,070
Drifton 108 5,500 SF 3,037 $90 $273,330
V14/20 139 3,690 SF 1,640 $100 $164,000
PROJECT 1,177 4,099 SF 2,387 $224,977
PROJECT Shor Lakelet Watersyde Wavmor Crestvue Bleau Drifton V14/20 DIMENSIONS 41' x 68' 41' x 90' 50' x 80' 45' x 100' 55' x 85' 50' x 100' 55' x 100' 41' x 90' MIN. LOT SIZE (SF) 2,788 SF 3,690 SF 4,000 SF 4,500 SF 4,675 SF 5,000 SF 5,500 SF 3,690 SF # LOTS 193 173 153 163 138 110 108 139
City Impact Fees/Lot $19,136 $19,851 $21,038 $20,565 $20,776 $21,397 $22,123 $17,298 Greenbriar Fees $3,800 $3,800 $3,800 $3,800 $3,800 $3,800 $3,800 $3,800 Agency Fees $13,510 $14,494 $15,526 $15,431 $15,675 $16,297 $17,085 $13,374 School Fees $0 $0 $0 $0 $0 $0 $0 $18,916
Total Fees $36,446 $38,145 $40,364 $39,796 $40,251 $41,494 $43,008 $53,388 Less Credits ($11,874) ($11,992) ($12,190) ($12,111) ($12,146) ($12,249) ($12,370) ($11,053) Total Fees Per Lot $24,572 $26,153 $28,174 $27,685 $28,105 $29,245 $30,638 $42,335
Smith & Associates, Inc.
Direct Levies include the charges applied to the vacant lots during construction. These direct levies show annual payments at $396.67 identified as follows.
Based on the overall calculations on value identified for each product area, the allocation of direct levies is calculated as follows.
PROJECT SHOR LAKELET WATERSYDE WAVMORE CRESTVIEW BLEAU DRIFTON V14/20 LOT SIZE 2,768 SF 3,690 SF 4,000 SF 4,500 SF 4,675 SF 5,000 SF 5,500 S F3 , 6 9 0 S F AVERAGE HOME SIZE 1,982 SF 2,233 SF 2,650 SF 2,484 SF 2,557 SF 2,923 SF 3,037 SF 1,640 SF Land Value Conclusion $185,100 $195,500 $194,900 $188,200 $198,100 $234,200 $205,300 $164,100 Annual Base Taxes (1.1438%) $2,117.17 $2,236.13 $2,229.27 $2,152.63 $2,265.87 $2,678.78 $2,348.22 $1,876.98 Per Month $176.43 $186.34 $185.77 $179.39 $188.82 $223.23 $195.69 $156.41 Absorption Period - Months (A) 25 25 33 33 33 33 33 25
Total Expenditure/Lot $4,410.78 $4,658.60 $6,130.48 $5,919.74 $6,231.14 $7,366.64 $6,457.61 $3,910.37 # of Units 100 100 100 100 100 100 100 100
Overall Totals $441,078 $465,860 $613,048 $591,974 $623,114 $736,664 $645,761 $391,037 50% basis due to Absorption $220,539 $232,930 $306,524 $295,987 $311,557 $368,332 $322,880 $195,518 Per Unit (A) $2,205 $2,329 $3,065 $2,96 0 $3,116 $3,683 $3,229 $1,955 (A) Total absorption Period Based on 100 Units
DIRECT LEVIES TOTALS
0168/Sac Area Flood Control $10.90
0169/Natomas Basin $1.50
0198/SAFCA $2.00
0659/Sac. Additional Library $1.82
1111/Sac. Service Zone #1 $278.04
0673/N. Natomas TMA CFD $88.66
0738/RD #1000 $10.00
0739/RD #1000 Stormwater $3.75
TOTALS $396.67
PROJECT SHOR LAKELET WATERSYDE WAVMORE CRESTVIEW BLEAU DRIFTON V14/20 LOT SIZE 2,768 SF 3,690 SF 4,000 SF 4,500 SF 4,675 SF 5,000 SF 5,500 SF 3,690 SF AVERAGE HOME SIZE 1,982 SF 2,233 SF 2,650 SF 2,484 SF 2,557 SF 2,923 SF 3,037 SF 1,640 SF Direct Levies Per Annum $396.67 $396.67 $396.67 $396.67 $396.67 $396.67 $396.67 $396.67 Per Month $33.06 $33.06 $33.06 $33.06 $33.06 $33.06 $33.06 $33.06 Absorption Period - Months (A) 25 25 33 33 33 33 33 25
Total Expenditure/Lot $826.40 $826.40 $1,090.84 $1,090.84 $1,090.84 $1,090.84 $1,090.84 $826.40 # of Units 100 100 100 100 100 100 100 100
Overall Totals $82,640 $82,640 $109,084 $109,084 $109,084 $109,084 $109,084 $82,640 50% basis due to Absorption $41,320 $41,320 $54,542 $54,542 $54,542 $54,542 $54,542 $41,320 Per Unit (A) $413 $413 $545 $545 $545 $545 $545 $413
(A) Total absorption Period Based on 100 Units
Smith & Associates, Inc.
Special Taxes
The subject project is proposed for a special districts as desc ribed in the Taxes and Special Assessments section of this report. The overall allocation of these districts per product type are illustrated as follows.
B a s e d o n t h e o v e r a l l c a l c u l a t i o n s o n v a l u e i d e n t i f i e d f o r e a c h product area, the allocation of special assessments is calculated as follows.
HOA Dues
HOA is projected to be $90 per month, per unit for the lots in Phase 2, whereas dues are identified at $83.50 for the V14.20 lots. A prudent development would annex homes into a HOA in phases, after homes are built (typically on issuance of certificate of occupancy). As a result, the developer typically pays limited HOA fees. Primary exceptions include when homes fall out of co ntract after certificates of occupancy have been issued, or market conditions stall and the developer is left paying fees for a large group of homes. This analysis includes 50% of the HOA fees paid by the developer. Overall calculations are illustrated as follows.
PROJECT SHOR LAKELET WATERSYDE WAVMORE CRESTVIEW BLEAU DRIFTON V14/20 LOT SIZE 2,768 SF 3,690 SF 4,250 SF 4,500 SF 4,675 SF 5,000 SF 5,500 S F 3,690 SF CFD 2018-03 - 1A#2 $2,264.62 $2,578.74 $2,936.36 $2,828.12 $3,204.85 $3,256.85 $3,550.80 $1,792.38 Villages 1 & 2 4, 5 & 11 3, 6 & 8 14-17 7, 9 & 10 12 & 13 18 & 19 V14/2 0 PROJECT SHOR LAKELET WATERSYDE WAVMORE CRESTVIEW BLEAU DRIFTON V14/20 LOT SIZE 2,768 SF 3,690 SF 4,000 SF 4,500 SF 4,675 SF 5,000 SF 5,500 SF 3,690 SF AVERAGE HOME SIZE 1,982 SF 2,233 SF 2,650 SF 2,484 SF 2,557 SF 2,923 SF 3,037 SF 1,640 SF Special District Per Annum $2,264.62 $2,578.74 $2,936.36 $2,828.12 $3,204.85 $3,256.85 $3,550.80 $1,792.38 Per Month $188.72 $214.90 $244.70 $235.68 $267.07 $271.40 $295.90 $149.37 Absorption Period - Months (A) 25 25 33 33 33 33 33 25
Total Expenditure/Lot $4,717.96 $5,372.38 $8,074.99 $7,777.33 $8,813.34 $8,956.34 $9,764.70 $3,734.13 # of Units 100 100 100 100 100 100 100 100
Overall Totals $471,796 $537,238 $807,499 $777,733 $881,334 $895,634 $976,470 $373,413 50% basis due to Absorption $235,898 $268,619 $403,750 $388,867 $440,667 $447,817 $488,235 $186,706 Per Unit (A) $2,359 $2,686 $4,037 $3,889 $4,407 $4,478 $4,882 $1,867 (A) Total absorption Period Based on 100 Units
PROJECT SHOR LAKELET WATERSYDE WAVMORE CRESTVIEW BLEAU DRIFTON V14/20 LOT SIZE 2,768 SF 3,690 SF 4,000 SF 4,500 SF 4,675 SF 5,000 SF 5,500 S F 3,690 SF AVERAGE HOME SIZE 1,982 SF 2,233 SF 2,650 SF 2,484 SF 2,557 SF 2,923 SF 3,031 SF 1,640 SF HOA Per Annum $1,080.00 $1,080.00 $1,080.00 $1,080.00 $1,080.00 $1,080.00 $1,080.00 $1,002.00 Per Month $90.00 $90.00 $90.00 $90.00 $90.00 $90.00 $90.00 $83.50 Absorption Period - Months (A) 25 25 33 33 33 33 33 25
Total Expenditure/Lot $2,250.00 $2,250.00 $2,970.00 $2,970.00 $2,970.00 $2,970.00 $2,970.00 $2,087.50 # of Units 100 100 100 100 100 100 100 100
Overall Totals $225,000 $225,000 $297,000 $297,000 $297,000 $297,000 $297,000 $208,750 50% basis due to Absorption $112,500 $112,500 $148,500 $148,500 $148,500 $148,500 $148,500 $104,375 Per Unit (A) $1,125 $1,125 $1,485 $1,485 $1,485 $1,485 $1,485 $1,044 (A) Total absorption Period Based on 100 Units
Smith & Associates, Inc.
DEVELOPER’S INCENTIVE
Developers surveyed in this market climate noted that projects are being looked at based on profit requirements. Urban projects typically require much higher profits, as capital outlays for construction are nearly double that of suburban projects. The expectations noted below reflect bottom line profit for the project.
PRO-FORMA
Based on Market Acquisition AREA EXPECTATION
Regional Homebuilder
1,000+ Lots (2024 Pro-Forma)
Paper Lots
Sacramento MSA 19.0% total IRR based on finished lots
Regional Homebuilder
50+ Lots (2024 Pro-Forma)
Paper Lots
Sacramento MSA 13.1% profit from production homes priced From the low $400s to mid $500s
Regional Homebuilder
50+ Lots (2024 Pro-Forma)
Finished
East Bay Area 12.75% profit fr om production homes priced Above $1.0 million. BMR requirement with
15.0% of units.
Regional Homebuilder
100+Lots (2024 Pro-Forma)
Finished
East Bay Area 20.2% profit from production homes priced above $800,000. Developer acquired project
in early 2021. BMR requirement with
8.0% of units.
Regional Homebuilder
100+ Lots (2023 Pro-Forma)
Finished
Central Valley 15.6% profit from production homes priced above $650,000. Developer acquired project
in early 2020.
Regional Homebuilder
100+ Lots (2023 Pro-Forma)
Finished
Central Valley 12.97% profit fr om production homes priced above $600,000.
Regional Homebuilder
100+ Lots (2023 Pro-Forma)
Finished
Central Valley 13.5% profit from production homes priced Above $1,000,000.
Regional Homebuilder
50+ Lots (2023 Pro-Forma)
Finished
Central Valley 17.7% profit from production homes priced Above $600,000.
The net profit noted implies net profit, net of debt financing only. Some builders do not use or report equity financing. In addition to product segment and expected s ales rate, numerous other factors affect profit expectations, such as entitlements, location, lot condit ion, prior project history, as well as broader market conditions such as recessionary risks.
Smith & Associates, Inc.
For this model, developer’s incentive of 10% of revenues (gross sales proceeds) are projected for each product line. While two of these projects (Bleau, Drifton) demonstrate a longer absorption period than the remainder of the product lines, larger homes are undersuppl ied in the immediate area somewhat mitigating the overall risk. It is noted that profit levels ar e commensurate with home development, including direct construction costs, permits, and fees, as well as all agents of production involved with vertical improvements.
Cost of Funds
Cost of funds is the overall cost, or blended cost of debt and equity, i.e., the time value of money. Debt financing is typically less costly and is offered by convention al lenders, while equity financing carries higher risk and higher costs. Equity financing is typically pa id on a waterfall basis. Preferred returns typically range from 8% to 20% and come with minimum IRR expect ations. Private equity requirements vary based on project size and type. Smaller projects may rely on private equity financing based on a preferred return only (reflecting a minor premium on rates expected from “safe” commercial investments such as low-risk self-storage facilities), while larger projects—such as master planned communities—may r e q u i r e a p r e f e r r e d r e t u r n , a s w e l l a s m u l t i p l e s o f 2 X o r 3 X , in addition to project performance requirements such as sales rate (3+/month) and unleveraged IRR requirements (25+%).
Assuming typical loan costs, a discount rate (cost of funds) of 6.50% is assigned for the subject. The annual rate is applied to the calculated net income after profit figur e for each product type and applied to the overall holding period. These calculations are identified as follows.
Interaction of Developer’s Incentive/Cost of Funds
The interaction of Developer’s Incentive and the Cost of Funds considers the overall profitability for each specific project. The total of these components measured agai nst gross retail sales proceeds for each project shows this overall relationship. Based on the calculat ions identified in this section, subject gross sale proceeds are noted as follows.
PROJECT SHOR LAKELET WATERSYDE WAVMORE CRESTVIEW BLEAU DRIFTON V14/20 LOT SIZE 2,768 SF 3,690 SF 4,000 SF 4,500 SF 4,675 SF 5,000 SF 5,500 SF 3,690 SF AVERAGE HOME SIZE 1,982 SF 2,233 SF 2,650 SF 2,484 SF 2,557 SF 2,923 SF 3,037 SF 1,640 SF Net Income/Lot After Profit $214,148 $226,074 $237,331 $229,221 $241,180 $285,165 $250,029 $189,749 Absorption Period - Months (A) 25 25 33 33 33 33 33 25
Rate (6.5% applied Monthly) 0.54% 0.54% 0.54% 0.54% 0.54% 0.54% 0.54% 0.54% Overall Totals $28,999 $30,614 $42,423 $40,973 $43,111 $50,973 $44,693 $25,695 PROJECT SHOR LAKELET WATERSYDE WAVMORE CRESTVIEW BLEAU DRIFTON V14/20 LOT SIZE 2,768 SF 3,690 SF 4,000 SF 4,500 SF 4,675 SF 5,000 SF 5,500 SF 3,690 SF AVERAGE HOME SIZE 1,982 SF 2,233 SF 2,650 SF 2,484 SF 2,557 SF 2,923 SF 3,037 SF 1,640 SF Developer's Incentive $57,204 $62,146 $69,397 $66,178 $68,791 $77,604 $74,528 $53,054 Cost of Funds $28,999 $30,614 $42,423 $40,973 $43,111 $50,973 $44,693 $25,695 TOTAL $86,203 $92,760 $111,820 $107,152 $111,902 $128,577 $119,221 $78,749 Gross Sales Proceeds $572,040 $621,457 $693,970 $661,784 $687,912 $776,041 $745,279 $530,540 % of GSP 15.1% 14.9% 16.1% 16.2% 16.3% 16.6% 16.0% 14.8%
Smith & Associates, Inc.
The overall profit expectation for each village ranges from 14.8% to 16.6% of gross sales proceeds. This is supportive of the project feasibility and is attractive to home builders. In addition, these parameters were tested in Discount Cash Flow models based on the overall conclusions noted in the prior sections. The only variance is that costs were inflated over time at 2% per annum, as well as the inclusion of appreciation (2%/Year beginning in Quarter 5). These net revenues based on entrepreneurship at 8% of gross sales proceeds, whereas discount rates from 11% to 12% were applied. Conclusions are noted below along with the resultant IRR projections.
PROJECT CONCLUSION/LOT IRR
Shor $186,300 22.9%
Lakelet $196,600 23.2%
Watersyde $198,900 21.6%
Wavmor $192,200 21.5%
Crestvue $202,300 21.4%
Bleau $234,800 22.1%
Drifton $204,800 22.7%
V14/20 $164,900 23.3%
These conclusions reinforce thos e identified through extraction . Calculations of the overall lot value based on each product type based on calculations noted in this section are identified on the following table. Individual cash flow models follow this chart.
Smith & Associates, Inc.
PROJECT SHOR LAKELET WATERSYDE WAVMOR CRESTVUE BLEAU DRIFTON V14/20 Average Home Size 1,982 2,233 2,650 2,484 2,557 2,923 3,037 1,640 Number of Lots 100 100 100 100 100 100 100 100
Direct Construction Costs/SF $95 $95 $95 $95 $95 $90 $90 $100 # o f M o d e l s 333 33333
Costs/Model $150,000 $150,000 $150,000 $150,000 $150,000 $200,000 $200,000 $150,000
REVENUE
--Base Home Revenue $570,240 $619,657 $681,190 $652,990 $679,590 $751,823 $735,657 $528,740 --Lot Premium $0 $0 $10,980 $6,994 $6,522 $21,818 $7,222 $0 --Model Recapture (40%) $1,800 $1,800 $1,800 $1,800 $1,800 $2,400 $2,400 $1,800 TOTAL REVENUE (Gross Sales Proceeds) $572,040 $621,457 $693,970 $661,784 $687,912 $776,041 $745,279 $530,540
EXPENSES
-Sales Commissions 3.00% $17,161 $18,644 $20,819 $19,854 $20,637 $23,281 $22,358 $15,916 -Closing, Title, Escrow 0.25% $1,430 $1,554 $1,735 $1,654 $1,720 $1,940 $1,863 $1,326 -Warranty 1.00% $5,720 $6,215 $6,940 $6,618 $6,879 $7,760 $7,453 $5,305 -Direct Construction Costs $188,290 $212,135 $251,750 $235,980 $242,915 $263,070 $273,330 $164,000 -Permits and Fees $24,572 $26,153 $28,174 $27,685 $28,105 $29,245 $30,638 $42,335 -General and Administrative 3.00% $17,161 $18,644 $20,819 $19,854 $20,637 $23,281 $22,358 $15,916 -Marketing 1.25% $7,151 $7,768 $8,675 $8,272 $8,599 $9,701 $9,316 $6,632 -Other Indirects (Construction/Insurance/Contingency) 5.00% $28,602 $31,073 $34,699 $33,089 $34,396 $38,802 $37,264 $26,527 -Model Costs $4,500 $4,500 $4,500 $4,500 $4,500 $6,000 $6,000 $4,500 -Ad Valorem Taxes 1.1438% $2,204 $2,329 $3,065 $2,960 $3,116 $3,683 $3,229 $1,955 -Direct Levies $413 $413 $545 $545 $545 $545 $545 $413
-Special Taxes $2,359 $2,686 $4,037 $3,889 $4,407 $4,478 $4,882 $1,867 -HOA (at 50%) $1,125 $1,125 $1,485 $1,485 $1,485 $1,485 $1,485 $1,044 TOTAL EXPENSES $300,688 $333,238 $387,242 $366,385 $377,941 $413,272 $420,722 $287,737 NET INCOME BEFORE PROFIT $271,352 $288,219 $306,728 $295,399 $309,971 $362,769 $324,557 $242,803 -Implied Developer's Incentive 10.0% $57,204 $62,146 $69,397 $66,178 $68,791 $77,604 $74,528 $53,054 NET INCOME AFTER PROFIT $214,148 $226,074 $237,331 $229,221 $241,180 $285,165 $250,029 $189,749 -Implied Costs of Funds 6.5% $28,999 $30,614 $42,423 $40,973 $43,111 $50,973 $44,693 $25,695 VALUE INDICATION (PER LOT) $185,148 $195,459 $194,908 $188,248 $198,069 $234,192 $205,337 $164,054 ROUNDED $185,100 $195,500 $194,900 $188,200 $198,100 $234,200 $205,300 $164,100
Smith & Associates, Inc.
SHOR - QUARTERLY DISCOUNTING PERIOD PERIOD PERIOD PERIOD PERIOD PERIO DP E R I O DP E R I O DP E R I O DP E R I O D ITEM 1 2 3456789 1 0 T OTALS
SINGLE-FAMILY RESIDENTIAL
Total Number Developed 100 1 00 8 87 66 45 24 02 81 6 4 Tota l Number Cons tructed 15 12 12 12 12 12 12 12 1 0 100 Number of Uni ts s ol d 0 12 12 12 12 12 12 12 12 4 100 Number of Uni ts Unsold 100 88 76 64 52 40 28 16 4 0
Avera ge Selli ng Price - Including Lot Premium $570,240 $570,240 $ 570,240 $570,240 $570,240 $570,240 $570,240 $570,240 $570,240 $570,240 Tota l Revenues - Ba se Pla ns $0 $6,842,880 $6,842,880 $6,842,880 $6, 842,880 $6,842,880 $6,842,880 $6,842,880 $6,842,880 $2,280,960 $57,024,000 Model Home Reca pture $0 $0 $0 $0 $0 $0 $0 $0 $0 $180,000 $180,000 TOTAL PROJECT REVENUES $0 $6,842,880 $6,842,880 $6,842,880 $6,842,88 0 $6,842,880 $6,842,880 $6,842,880 $6,842,880 $2,460,960 $57,204,000 Ma rket Apprecia ti on (Qua rterl y) 0.50% $0 $0 $0 $0 $34,214 $68,600 $103, 157 $137,887 $172,791 $74,758 $591,408 TOTAL REVENUE $0 $6,842,880 $6,842,880 $6,842,880 $6,877,094 $6,911,4 80 $6,946,037 $6,980,767 $7,015,671 $2,535,718 $57,795,408
FIXED EXPENSES
Cons truction Cos ts 188,290$ $2,824,350 $2,259,480 $2,259,480 $2,259,480 $2,259,480 $2,259 ,480 $2,259,480 $2,259,480 $188,290 $0 $18,829,000 Model Upgra des $450,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $450,000 Permi ts & Fees 24,572$ $368,580 $294,864 $294,864 $294,864 $294,864 $294,864 $294,8 64 $294,864 $24,572 $0 $2,457,200 Tota l Construction Cos ts $3,642,930 $2,554,344 $2,554,344 $2,554,34 4 $2,554,344 $2,554,344 $2,554,344 $2,554,344 $212,862 $0 $21,736,200 Infla tion (Home Cons tructi on) 0.50% $0 $12,772 $25,607 $38,507 $51,47 1 $64,500 $77,595 $90,754 $8,665 $0 $369,872 TOTAL CONSTRUCTION COSTS $3,642,930 $2,567,116 $2,579,951 $2,592,851 $2,605,815 $2,618,844 $2,631,939 $2,645,098 $221,527 $0 $22,106,072
VARIABLE EXPENSES
Property Ta xes (1.1438%) $535.00 $53,500 $47,080 $40,660 $34,240 $28, 376 $21,828 $15,280 $8,731 $2,226 $0 $251,922 Di rect Levies (Per Qua rter) $99.17 $9,917 $8,727 $7,537 $6,347 $5,260 $4,046 $2,832 $1,618 $413 $0 $46,697 HOA $270.00 $27,000 $23,760 $20,520 $17,280 $14,040 $10,800 $7,560 $4,32 0 $1,080 $0 $126,360 Specia l Taxes (Per Quarter) $566.16 $56,616 $49,822 $43,028 $36,234 $ 30,029 $23,099 $16,170 $9,240 $2,356 $0 $266,594 Other Indirect Cos ts 5.00% $0 $342,144 $342,144 $342,144 $343,855 $345 ,574 $347,302 $349,038 $350,784 $126,786 $2,889,770 Ma rketi ng 1.25% $0 $85,536 $85,536 $85,536 $85,964 $86,393 $86,825 $87,260 $87,696 $31,696 $722,443 Clos ing Cos ts , Warra nty 1.25% $0 $85,536 $85,536 $85,536 $85,964 $86,3 93 $86,825 $87,260 $87,696 $31,696 $722,443 Commis s ions 3.0% $0 $205,286 $205,286 $205,286 $206,313 $207,344 $208,3 81 $209,423 $210,470 $76,072 $1,733,862 Admin. and Overhea d 3.0% $173,386 $173,386 $173,386 $173,386 $173,386 $173,386 $173,386 $173,386 $173,386 $173,386 $1,733,862 TOTAL VARIABLE EXPENSES $320,419 $1,021,278 $1,003,634 $985,990 $973,187 $958,865 $944,562 $93 0,276 $916,107 $439,637 $8,493,953 TOTAL FIXED AND VARIABLE EXPENSES $3,963,349 $3,588,393 $3,583,585 $3,578,841 $3,579,002 $3,577,709 $3,576,500 $3,575,374 $1,137,634 $43 9,637 $30,600,025 NET SALES REVENUE (BEFORE PROFIT) ($3,963,349) $3,254,487 $3,259,2 95 $3,264,039 $3,298,092 $3,333,770 $3,369,537 $3,405,393 $5,878,037 $ 2,096,081 $27,195,383 Entrepreneuria l Profit 8% $0 $547,430 $547,430 $547,430 $550,168 $552, 918 $555,683 $558,461 $561,254 $202,857 $4,623,633 Net Proceeds ($3,963,349) $2,707,056 $2,711,865 $2,716,609 $2,747,92 5 $2,780,852 $2,813,854 $2,846,932 $5,316,784 $1,893,224 $22,571,750
Di scount Ra te 11% 0.97324 0.94719 0.92184 0.89717 0.87315 0.84978 0.827 04 0.80491 0.78336 0.76240 Net Cash Flow ($3,857,274) $2,564,092 $2,499,899 $2,437,248 $2,399,362 $2,363,126 $2,327,174 $2,291,513 $4,164,976 $1,443,390 NET PRESENT VALUE $18,633,506
ROUNDED $18,630,000
PER LOT $186,300
IRR CALCULATIONS VALUE PERIOD 1 PERIOD 2 PERIOD 3 PERIOD 4 PERIOD 5 PE RIOD 6 PERIOD 7 PERIOD 8 PERIOD 9 PERIOD 10 NET INCOME (BEFORE PROFIT) ($18,633,506) ($3,963,349) $3,254,487 $3,259,295 $3,264,039 $3,298,092 $3,333,770 $3,369,537 $3, 405,393 $5,878,037 $2,096,081 IRR (quarterly) 5.73%
Annualized 22.9%
Smith & Associates, Inc.
LAKELET - QUARTERLY DISCOUNTING PERIOD PERIOD PERIOD PERIOD PERIOD PE RIOD PERIOD PERIOD PERIOD PERIOD ITEM 1 2 3456789 1 0 T OTALS
SINGLE-FAMILY RESIDENTIAL
Total Number Developed 100 1 00 8 87 66 45 24 02 81 6 4 Tota l Number Cons tructed 15 12 12 12 12 12 12 12 1 0 100 Number of Uni ts s ol d 0 12 12 12 12 12 12 12 12 4 100 Number of Uni ts Unsold 100 88 76 64 52 40 28 16 4 0
Avera ge Selli ng Price - Including Lot Premium $619,657 $619,657 $ 619,657 $619,657 $619,657 $619,657 $619,657 $619,657 $619,657 $619,657 Tota l Revenues - Ba se Pla ns $0 $7,435,884 $7,435,884 $7,435,884 $7, 435,884 $7,435,884 $7,435,884 $7,435,884 $7,435,884 $2,478,628 $61,965,700 Model Home Reca pture $0 $0 $0 $0 $0 $0 $0 $0 $0 $180,000 $180,000 TOTAL PROJECT REVENUES $0 $7,435,884 $7,435,884 $7,435,884 $7,435,88 4 $7,435,884 $7,435,884 $7,435,884 $7,435,884 $2,658,628 $62,145,700 Ma rket Apprecia ti on (Qua rterl y) 0.50% $0 $0 $0 $0 $37,179 $74,545 $112, 097 $149,837 $187,765 $80,762 $642,186 TOTAL REVENUE $0 $7,435,884 $7,435,884 $7,435,884 $7,473,063 $7,510,4 29 $7,547,981 $7,585,721 $7,623,649 $2,739,390 $62,787,886
FIXED EXPENSES
Cons truction Cos ts 212,135$ $3,182,025 $2,545,620 $2,545,620 $2,545,620 $2,545,620 $2,545 ,620 $2,545,620 $2,545,620 $212,135 $0 $21,213,500 Model Upgra des $450,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $450,000 Permi ts & Fees 26,153$ $392,295 $313,836 $313,836 $313,836 $313,836 $313,836 $313,8 36 $313,836 $26,153 $0 $2,615,300 Tota l Construction Cos ts $4,024,320 $2,859,456 $2,859,456 $2,859,45 6 $2,859,456 $2,859,456 $2,859,456 $2,859,456 $238,288 $0 $24,278,800 Infla tion (Home Cons tructi on) 0.50% $0 $14,297 $28,666 $43,107 $57,61 9 $72,205 $86,863 $101,595 $9,700 $0 $414,052 TOTAL CONSTRUCTION COSTS $4,024,320 $2,873,753 $2,888,122 $2,902,563 $2,917,075 $2,931,661 $2,946,319 $2,961,051 $247,988 $0 $24,692,852
VARIABLE EXPENSES
Property Ta xes (1.1438%) $560.00 $56,000 $49,280 $42,560 $35,840 $29, 702 $22,848 $15,994 $9,139 $2,330 $0 $263,694 Di rect Levies (Per Qua rter) $99.17 $9,917 $8,727 $7,537 $6,347 $5,260 $4,046 $2,832 $1,618 $413 $0 $46,697 HOA $270.00 $27,000 $23,760 $20,520 $17,280 $14,040 $10,800 $7,560 $4,32 0 $1,080 $0 $126,360 Specia l Taxes (Per Quarter) $644.69 $64,469 $56,733 $48,996 $41,260 $ 34,194 $26,303 $18,412 $10,521 $2,683 $0 $303,573 Other Indirect Cos ts 5.00% $0 $371,794 $371,794 $371,794 $373,653 $375 ,521 $377,399 $379,286 $381,182 $136,970 $3,139,394 Ma rketi ng 1.25% $0 $92,949 $92,949 $92,949 $93,413 $93,880 $94,350 $94,822 $95,296 $34,242 $784,849 Clos ing Cos ts , Warra nty 1.25% $0 $92,949 $92,949 $92,949 $93,413 $93,8 80 $94,350 $94,822 $95,296 $34,242 $784,849 Commis s ions 3.0% $0 $223,077 $223,077 $223,077 $224,192 $225,313 $226,4 39 $227,572 $228,709 $82,182 $1,883,637 Admin. and Overhea d 3.0% $188,364 $188,364 $188,364 $188,364 $188,364 $188,364 $188,364 $188,364 $188,364 $188,364 $1,883,637 TOTAL VARIABLE EXPENSES $345,750 $1,107,631 $1,088,745 $1,069,859 $1,056,232 $1,040,956 $1,02 5,700 $1,010,463 $995,353 $476,000 $9,216,688 TOTAL FIXED AND VARIABLE EXPENSES $4,370,070 $3,981,384 $3,976,867 $3,972,421 $3,973,308 $3,972,617 $3,972,019 $3,971,514 $1,243,341 $47 6,000 $33,909,540 NET SALES REVENUE (BEFORE PROFIT) ($4,370,070) $3,454,500 $3,459,0 17 $3,463,463 $3,499,756 $3,537,812 $3,575,962 $3,614,207 $6,380,308 $ 2,263,391 $28,878,345 Entrepreneuria l Profit 8% $0 $594,871 $594,871 $594,871 $597,845 $600, 834 $603,838 $606,858 $609,892 $219,151 $5,023,031 Net Proceeds ($4,370,070) $2,859,629 $2,864,146 $2,868,592 $2,901,91 1 $2,936,977 $2,972,123 $3,007,349 $5,770,416 $2,044,240 $23,855,314
Di scount Ra te 11% 0.97324 0.94719 0.92184 0.89717 0.87315 0.84978 0.827 04 0.80491 0.78336 0.76240 Net Cash Flow ($4,253,109) $2,708,607 $2,640,278 $2,573,603 $2,533,815 $2,495,799 $2,458,069 $2,420,634 $4,520,336 $1,558,524 NET PRESENT VALUE $19,656,556
ROUNDED $19,660,000
PER LOT $196,600
IRR CALCULATIONS VALUE PERIOD 1 PERIOD 2 PERIOD 3 PERIOD 4 PERIOD 5 PE RIOD 6 PERIOD 7 PERIOD 8 PERIOD 9 PERIOD 10 NET INCOME (BEFORE PROFIT) ($19,656,556) ($4,370,070) $3,454,500 $3,459,017 $3,463,463 $3,499,756 $3,537,812 $3,575,962 $3, 614,207 $6,380,308 $2,263,391 IRR (quarterly) 5.79%
Annualized 23.2%
Smith & Associates, Inc.
WATERSYDE - QUARTERLY DISCOUNTING PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD I T E M 1 23456789 1 0 1 1 1 2 T O T A L S
SINGLE-FAMILY RESIDENTIAL
T o t a l N u m b e r D e v e l o p e d 1 0 01 0 09 18 27 36 45 54 63 72 81 91 0 T o t a l N u m b e r C o n s t r u c t e d 1 2 99999999970 1 0 0 N u m b e r o f U n i t s s o l d 0 9999999999 1 0 1 0 0 Number of Uni ts Uns ol d 100 91 82 73 64 55 46 37 28 19 10 0 Av er age Selling P r ic e - Inc luding L ot P r emium $692,170 $692,170 $692,170 $692,170 $692,170 $692,170 $692,170 $692,170 $692,170 $692,170 $692,170 $692,170 Tota l Revenues - Ba s e Pl a ns $0 $6,229,530 $6,229,530 $6,229,530 $6,229,530 $6,229,530 $6,229,530 $6,229,530 $6,229,530 $6,229,530 $6,229,530 $6,921,700 $69,217,000 Model Home Recapture $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $180,000 $180,000 TOTAL PROJECT REVENUES $0 $6,229,530 $6,229,530 $6,229,530 $6,229,530 $6,229,530 $6,229,530 $6,229,530 $6,229,530 $6,229,530 $6,229,530 $7,101,700 $69,397,000 Ma rket Appreci a tion (Qua rterl y) 0.50% $0 $0 $0 $0 $31,148 $62,451 $93,9 11 $125,528 $157,303 $189,238 $221,331 $289,089 $1,169,999 TOTAL REVENUE $0 $6,229,530 $6,229,530 $6,229,530 $6,260,678 $6,291,981 $6,323,441 $6,355,058 $6,386,833 $6,418,768 $6,450,861 $7,390,789 $70,566,999
FIXED EXPENSES
Construction Costs 251,750$ $3,021,000 $2,265,750 $2,265,750 $2,265,750 $2,265,750 $2,265,750 $2,265,750 $2,265,750 $2,265,750 $2,265,750 $1,762,250 $0 $25,175,000 Model Upgra des $450,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $450,000 Permits & Fees 28,174$ $338,088 $253,566 $253,566 $253,566 $253,566 $253,566 $253,566 $253,566 $253,566 $253,566 $197,218 $0 $2,817,400 Tota l Cons tructi on Cos ts $3,809,088 $2,519,316 $2,519,316 $2,519,316 $2,519,316 $2,519,316 $2,519,316 $2,519,316 $2,519,316 $2,519,316 $1,959,468 $0 $28,442,400 Infl a ti on (Home Cons tructi on) 0.50% $0 $12,597 $25,256 $37,979 $50,76 5 $63,616 $76,531 $89,510 $102,554 $115,663 $100,207 $0 $674,678 TOTAL CONSTRUCTION COSTS $3,809,088 $2,531,913 $2,544,572 $2,557,295 $2,570,081 $2,582,932 $2,595,847 $2,608,826 $2,621,870 $2,634,979 $2,059,675 $0 $29,117,078
VARIABLE EXPENSES
Property Ta xes (1.1438%) $570.00 $57,000 $51,870 $46,740 $41,610 $37, 210 $31,977 $26,744 $21,512 $16,605 $11,268 $5,930 $0 $348,465 Di rect Levi es (Per Qua rter) $99.17 $9,917 $9,024 $8,132 $7,239 $6,474 $5,563 $4,653 $3,743 $2,889 $1,960 $1,032 $0 $60,627 HOA $270.00 $27,000 $24,570 $22,140 $19,710 $17,280 $14,850 $12,420 $9,990 $7,560 $5,130 $2,700 $0 $163,350 Speci al Ta xes (Per Qua rter) $734.09 $73,409 $66,802 $60,195 $53,589 $ 47,921 $41,182 $34,444 $27,705 $21,385 $14,511 $7,637 $0 $448,781 Other Indi rect Costs 5.00% $0 $311,477 $311,477 $311,477 $313,034 $314 ,599 $316,172 $317,753 $319,342 $320,938 $322,543 $369,539 $3,528,350 Ma rketi ng 1.25% $0 $77,869 $77,869 $77,869 $78,258 $78,650 $79,043 $79,438 $79,835 $80,235 $80,636 $92,385 $882,087 Cl os i ng Cos ts , Warra nty 1.25% $0 $77,869 $77,869 $77,869 $78,258 $78,650 $79,043 $79,438 $79,835 $80,235 $80,636 $92,385 $882,087 Commi s s i ons 3.0% $0 $186,886 $186,886 $186,886 $187,820 $188,759 $189,703 $190,652 $191,605 $192,563 $193,526 $221,724 $2,117,010 Admi n. a nd Overhea d 3.0% $176,417 $176,417 $176,417 $176,417 $176,417 $176,417 $176,417 $176,417 $176,417 $176,417 $176,417 $176,417 $2,117, 010 TOTAL VARIABLE EXPENSES $343,743 $982,785 $967,725 $952,666 $942,673 $930,648 $918,640 $906,648 $895,474 $883,257 $871,057 $952,450 $10,547,768 TOTAL FIXED AND VARIABLE EXPENSES $4,152,831 $3,514,697 $3,512,298 $3,509,961 $3,512,755 $3,513,580 $3,514,486 $3,515,473 $3,517,344 $3,518,236 $2,930,733 $952,450 $39,664,846 NET SALES REVENUE (BEFORE PROFIT) ($4,152,831) $2,714,833 $2,717,232 $2,719,569 $2,747,923 $2,778,401 $2,808,955 $2,839,585 $2,869,490 $2,900,531 $3,520,129 $6,438,339 $30,902,154 Entrepreneuri a l Profi t 8% $0 $498,362 $498,362 $498,362 $500,854 $503, 358 $505,875 $508,405 $510,947 $513,501 $516,069 $591,263 $5,645,360 Net Proceeds ($4,152,831) $2,216,470 $2,218,870 $2,221,206 $2,247,068 $2,275,042 $2,303,079 $2,331,180 $2,358,543 $2,387,030 $3,004,060 $5,847,076 $25,256,794
Di s count Ra te 11% 0.97324 0.94719 0.92184 0.89717 0.87315 0.84978 0.82704 0.80491 0.78336 0.76240 0.74199 0.72213 Net Cash Flow ($4,041,685) $2,099,415 $2,045,438 $1,992,790 $1,962,037 $1,933,297 $1,904,742 $1,876,382 $1,847,597 $1,819,866 $2,228,991 $4,222,375 NET PRESENT VALUE $19,891,245
ROUNDED $19,890,000
PER LOT $198,900
IRR CALCULATIONS VALUE PERIOD 1 PERIOD 2 PERIOD 3 PERIOD 4 PERIOD 5 PE RIOD 6 PERIOD 7 PERIOD 8 PERIOD 9 PERIOD 10 PERIOD 11 PERIOD 12 NET INCOME (BEFORE PROFIT) ($19,891,245) ($4,152,831) $2,714,833 $2,717,232 $2,719,569 $2,747,923 $2,778,401 $2,808,955 $2,839,585 $2,869,490 $2,900,531 $3,520,129 $6,438,339 IRR (quarterly) 5.39%
Annualized 21.6%
Smith & Associates, Inc.
WAVMOR - QUARTERLY DISCOUNTING PERIOD PERIOD PERIOD PERIOD PERIOD PER IOD PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD I T E M 1 234 56789 1 0 1 1 1 2 T O T A L S
SINGLE-FAMILY RESIDENTIAL
T o t a l N u m b e r D e v e l o p e d 1 0 01 0 09 18 2 7 36 45 54 63 72 81 91 0 T o t a l N u m b e r C o n s t r u c t e d 1 2 999 99999970 1 0 0 N u m b e r o f U n i t s s o l d 0 999 9999999 1 0 1 0 0 Number of Uni ts Uns ol d 100 91 82 73 64 55 46 37 28 19 10 0 Avera ge Sel l i ng Pri ce - Incl udi ng Lot Premi um $659,984 $659,984 $ 659,984 $659,984 $659,984 $659,984 $659,984 $659,984 $659,984 $659,984 $659,984 $659,984 Tota l Revenues - Ba s e Pl a ns $0 $5,939,856 $5,939,856 $5,939,856 $5, 939,856 $5,939,856 $5,939,856 $5,939,856 $5,939,856 $5,939,856 $5,939,856 $6,599,840 $65,998,400 Model Home Reca pture $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $180,000 $180,000 TOTAL PROJECT REVENUES $0 $5,939,856 $5,939,856 $5,939,856 $5,939,85 6 $5,939,856 $5,939,856 $5,939,856 $5,939,856 $5,939,856 $5,939,856 $6,779,840 $66,178,400 Ma rket Appreci a ti on (Qua rterl y) 0.50% $0 $0 $0 $0 $29,699 $59,547 $89,5 44 $119,691 $149,989 $180,438 $211,040 $275,987 $1,115,935 TOTAL REVENUE $0 $5,939,856 $5,939,856 $5,939,856 $5,969,555 $5,999,4 03 $6,029,400 $6,059,547 $6,089,845 $6,120,294 $6,150,896 $7,055,827 $67,294,335
FIXED EXPENSES
Cons tructi on Cos ts 235,980$ $2,831,760 $2,123,820 $2,123,820 $2,123,820 $2,123,820 $2,123 ,820 $2,123,820 $2,123,820 $2,123,820 $2,123,820 $1,651,860 $0 $23,598 ,000 M o d e l U p g r a d e s $ 4 5 0 , 0 0 0 $ 0$ 0$ 0 $ 0$ 0$ 0$ 0$ 0$ 0$ 0$ 0 $ 4 5 0 , 0 0 0 Permits & Fees 27,685$ $332,220 $249,165 $249,165 $249,165 $249,165 $249,165 $249,1 65 $249,165 $249,165 $249,165 $193,795 $0 $2,768,500 Tota l Cons tructi on Cos ts $3,613,980 $2,372,985 $2,372,985 $2,372,985 $2,372,985 $2,372,985 $2,372,985 $2,372,985 $2,372,985 $2,372,985 $1,845,655 $0 $26,816,500 Infl a ti on (Home Cons tructi on) 0.50% $0 $11,865 $23,789 $35,773 $47,81 7 $59,921 $72,085 $84,311 $96,597 $108,945 $94,387 $0 $635,490 TOTAL CONSTRUCTION COSTS $3,613,980 $2,384,850 $2,396,774 $2,408,758 $2,420,802 $2,432,906 $2,445,070 $2,457,296 $2,469,582 $2,481,930 $1,940,042 $0 $27,451,990
VARIABLE EXPENSES
Property Ta xes (1.1438%) $550.00 $55,000 $50,050 $45,100 $40,150 $35, 904 $30,855 $25,806 $20,757 $16,022 $10,872 $5,722 $0 $336,239 Di rect Levi es (Per Qua rter) $99.17 $9,917 $9,024 $8,132 $7,239 $6,474 $5,563 $4,653 $3,743 $2,889 $1,960 $1,032 $0 $60,627 HOA $270.00 $27,000 $24,570 $22,140 $19,710 $17,280 $14,850 $12,420 $9,9 90 $7,560 $5,130 $2,700 $0 $163,350 Speci a l Ta xes (Per Qua rter) $707.03 $70,703 $64,340 $57,976 $51,613 $ 46,155 $39,664 $33,174 $26,683 $20,597 $13,976 $7,356 $0 $432,238 Other Indi rect Cos ts 5.00% $0 $296,993 $296,993 $296,993 $298,478 $299,970 $301,470 $302,977 $304,492 $306,015 $307,545 $352,791 $3,364,717 Ma rketi ng 1.25% $0 $74,248 $74,248 $74,248 $74,619 $74,993 $75,368 $75, 744 $76,123 $76,504 $76,886 $88,198 $841,179 Cl os i ng Cos ts , Wa rra nty 1.25% $0 $74,248 $74,248 $74,248 $74,619 $74,993 $75,368 $75,744 $76,123 $76,504 $76,886 $88,198 $841,179 Commi s s i ons 3.0% $0 $178,196 $178,196 $178,196 $179,087 $179,982 $180,8 82 $181,786 $182,695 $183,609 $184,527 $211,675 $2,018,830 Admi n. a nd Overhea d 3.0% $168,236 $168,236 $168,236 $168,236 $168,236 $168,236 $168,236 $168,236 $168,236 $168,236 $168,236 $168,236 $2,018, 830 TOTAL VARIABLE EXPENSES $330,856 $939,905 $925,269 $910,633 $900,852 $889,106 $877,376 $865,661 $854,737 $842,806 $830,890 $909,098 $10,077,188 TOTAL FIXED AND VARIABLE EXPENSES $3,944,836 $3,324,755 $3,322,043 $3,319,391 $3,321,654 $3,322,012 $3,322,446 $3,322,957 $3,324,319 $3,324,736 $2,770,932 $909,098 $37,529,179 NET SALES REVENUE (BEFORE PROFIT) ($3,944,836) $2,615,101 $2,617,813 $2,620,465 $2,647,902 $2,677,391 $2,706,954 $2,736,590 $2,765,525 $2,795,558 $3,379,964 $6,146,730 $29,765,156 Entrepreneuri a l Profi t 8% $0 $475,188 $475,188 $475,188 $477,564 $479,952 $482,352 $484,764 $487,188 $489,624 $492,072 $564,466 $5,383,547 Net Proceeds ($3,944,836) $2,139,913 $2,142,624 $2,145,276 $2,170,337 $2,197,439 $2,224,602 $2,251,826 $2,278,338 $2,305,935 $2,887,892 $5,582,263 $24,381,610
Di s count Ra te 11% 0.97324 0.94719 0.92184 0.89717 0.87315 0.84978 0.82704 0.80491 0.78336 0.76240 0.74199 0.72213 Net Cash Flow ($3,839,256) $2,026,900 $1,975,152 $1,924,668 $1,895,039 $1,867,351 $1,839,838 $1,812,509 $1,784,767 $1,758,040 $2,142,796 $4,031,144 NET PRESENT VALUE $19,218,948
ROUNDED $19,220,000
PER LOT $192,200
IRR CALCULATIONS VALUE PERIOD 1 PERIOD 2 PERIOD 3 PERIOD 4 PERIOD 5 PE RIOD 6 PERIOD 7 PERIOD 8 PERIOD 9 PERIOD 10 PERIOD 11 PERIOD 12 NET INCOME (BEFORE PROFIT) ($19,218,948) ($3,944,836) $2,615,101 $2,617,813 $2,620,465 $2,647,902 $2,677,391 $2,706,954 $2,736,590 $2,765,525 $2,795,558 $3,379,964 $6,146,730 IRR (quarterly) 5.37%
Annualized 21.5%
Smith & Associates, Inc.
CRESTVUE- QUARTERLY DISCOUNTING PERIOD PERIOD PERIOD PERIOD PERIOD PE RIOD PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD I T E M 123456789 1 0 1 1 1 2 T O T A L S
SINGLE-FAMILY RESIDENTIAL
Tota l Number Devel oped 100 100 91 82 73 64 55 46 37 28 19 10 T o t a l N u m b e r C o n s t r u c t e d 1 299999999970 1 0 0 N u m b e r o f U n i t s s o l d 09999999999 1 0 1 0 0 Number of Uni ts Uns ol d 100 91 82 73 64 55 46 37 28 19 10 0 Average Selling Price - Including Lot Premium $686,112 $686,112 $ 686,112 $686,112 $686,112 $686,112 $686,112 $686,112 $686,112 $686,112 $686,112 $686,112 Tota l Revenues - Ba s e Pl a ns $0 $6,175,008 $6,175,008 $6,175,008 $6,175,008 $6,175,008 $6,175,008 $6,175,008 $6,175,008 $6,175,008 $6,175,008 $6,861,120 $68,611,200 Model Home Reca pture $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $180,000 $180,000 TOTAL PROJECT REVENUES $0 $6,175,008 $6,175,008 $6,175,008 $6,175,008 $6,175,008 $6,175,008 $6,175,008 $6,175,008 $6,175,008 $6,175,008 $7,041,120 $68,791,200 Ma rket Appreci a ti on (Qua rterl y) 0.50% $0 $0 $0 $0 $30,875 $61,904 $93,0 89 $124,430 $155,927 $187,581 $219,394 $286,623 $1,159,824 TOTAL REVENUE $0 $6,175,008 $6,175,008 $6,175,008 $6,205,883 $6,236,912 $6,268,097 $6,299,438 $6,330,935 $6,362,589 $6,394,402 $7,327,743 $69,951,024
FIXED EXPENSES
Construction Costs 242,915$ $2,914,980 $2,186,235 $2,186,235 $2,186,235 $2,186,235 $2,186 ,235 $2,186,235 $2,186,235 $2,186,235 $2,186,235 $1,700,405 $0 $24,291 ,500 Model Upgra des $450,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $450,000 Permi ts & Fees 28,105$ $337,260 $252,945 $252,945 $252,945 $252,945 $252,945 $252,9 45 $252,945 $252,945 $252,945 $196,735 $0 $2,810,500 Tota l Cons tructi on Cos ts $3,702,240 $2,439,180 $2,439,180 $2,439,180 $2,439,180 $2,439,180 $2,439,180 $2,439,180 $2,439,180 $2,439,180 $1,897,140 $0 $27,552,000 Infl a ti on (Home Cons tructi on) 0.50% $0 $12,196 $24,453 $36,771 $49,151 $61,592 $74,096 $86,663 $99,292 $111,984 $97,020 $0 $653,217 TOTAL CONSTRUCTION COSTS $3,702,240 $2,451,376 $2,463,633 $2,475,951 $2,488,331 $2,500,772 $2,513,276 $2,525,843 $2,538,472 $2,551,164 $1,994,160 $0 $28,205,217
VARIABLE EXPENSES
Property Ta xes (1.1438%) $580.00 $58,000 $52,780 $47,560 $42,340 $37,862 $32,538 $27,214 $21,889 $16,896 $11,465 $6,034 $0 $354,579 Direct Levies (Per Quarter) $99.17 $9,917 $9,024 $8,132 $7,239 $6,474 $5,563 $4,653 $3,743 $2,889 $1,960 $1,032 $0 $60,627 HOA $270.00 $27,000 $24,570 $22,140 $19,710 $17,280 $14,850 $12,420 $9,990 $7,560 $5,130 $2,700 $0 $163,350 Speci a l Ta xes (Per Qua rter) $801.21 $80,121 $72,910 $65,699 $58,488 $ 52,303 $44,948 $37,593 $30,238 $23,340 $15,838 $8,336 $0 $489,814 Other Indi rect Cos ts 5.00% $0 $308,750 $308,750 $308,750 $310,294 $311 ,846 $313,405 $314,972 $316,547 $318,129 $319,720 $366,387 $3,497,551 Ma rketi ng 1.25% $0 $77,188 $77,188 $77,188 $77,574 $77,961 $78,351 $78,743 $79,137 $79,532 $79,930 $91,597 $874,388 Cl os i ng Cos ts , Wa rra nty 1.25% $0 $77,188 $77,188 $77,188 $77,574 $77,961 $78,351 $78,743 $79,137 $79,532 $79,930 $91,597 $874,388 Commi s s i ons 3.0% $0 $185,250 $185,250 $185,250 $186,176 $187,107 $188,043 $188,983 $189,928 $190,878 $191,832 $219,832 $2,098,531 Admi n. a nd Overhea d 3.0% $174,878 $174,878 $174,878 $174,878 $174,878 $174,878 $174,878 $174,878 $174,878 $174,878 $174,878 $174,878 $2,098, 531 TOTAL VARIABLE EXPENSES $349,916 $982,538 $966,785 $951,031 $940,414 $927,653 $914,907 $902,178 $890,311 $877,343 $864,392 $944,291 $10,511,758 TOTAL FIXED AND VARIABLE EXPENSES $4,052,156 $3,433,914 $3,430,417 $3,426,982 $3,428,745 $3,428,425 $3,428,183 $3,428,021 $3,428,783 $3,428,507 $2,858,552 $944,291 $38,716,975 NET SALES REVENUE (BEFORE PROFIT) ($4,052,156) $2,741,094 $2,744,591 $2,748,026 $2,777,138 $2,808,487 $2,839,914 $2,871,417 $2,902,152 $2,934,082 $3,535,851 $6,383,453 $31,234,048 Entrepreneuri a l Profi t 8% $0 $494,001 $494,001 $494,001 $496,471 $498,953 $501,448 $503,955 $506,475 $509,007 $511,552 $586,219 $5,596,082 Net Proceeds ($4,052,156) $2,247,093 $2,250,590 $2,254,025 $2,280,667 $2,309,534 $2,338,466 $2,367,462 $2,395,677 $2,425,075 $3,024,298 $5,797,233 $25,637,966
Di s count Ra te 11% 0.97324 0.94719 0.92184 0.89717 0.87315 0.84978 0.82704 0.80491 0.78336 0.76240 0.74199 0.72213 Net Cash Flow ($3,943,704) $2,128,421 $2,074,679 $2,022,234 $1,991,374 $1,962,608 $1,934,008 $1,905,585 $1,876,687 $1,848,872 $2,244,009 $4,186,381 NET PRESENT VALUE $20,231,153
ROUNDED $20,230,000
PER LOT $202,300
IRR CALCULATIONS VALUE PERIOD 1 PERIOD 2 PERIOD 3 PERIOD 4 PERIOD 5 PE RIOD 6 PERIOD 7 PERIOD 8 PERIOD 9 PERIOD 10 PERIOD 11 PERIOD 12 NET INCOME (BEFORE PROFIT) ($20,231,153) ($4,052,156) $2,741,094 $2,744,591 $2,748,026 $2,777,138 $2,808,487 $2,839,914 $2,871,417 $2,902,152 $2,934,082 $3,535,851 $6,383,453 IRR (quarterly) 5.35%
Annualized 21.4%
Smith & Associates, Inc.
BLEAU - QUARTERLY DISCOUNTING PERIOD PERIOD PERIOD PERIOD PERIOD PERI OD PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD I T E M 123456789 1 0 1 1 1 2 T O T A L S
SINGLE-FAMILY RESIDENTIAL
T o t a l N u m b e r D e v e l o p e d 1 0 0 1 0 09 18 27 36 45 54 63 72 81 91 0 T o t a l N u m b e r C o n s t r u c t e d 1 299999999970 1 0 0 N u m b e r o f U n i t s s o l d 09999999999 1 0 1 0 0 Number of Uni ts Uns ol d 100 91 82 73 64 55 46 37 28 19 10 0 Av er age Selling P r ic e - Inc luding L ot P r emium $773,641 $773,641 $773,641 $773,641 $773,641 $773,641 $773,641 $773,641 $773,641 $773,641 $773,641 $773,641 Tota l Revenues - Ba s e Pl a ns $0 $6,962,769 $6,962,769 $6,962,769 $6,962,769 $6,962,769 $6,962,769 $6,962,769 $6,962,769 $6,962,769 $6,962,769 $7,736,410 $77,364,100 Model Home Reca pture $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $240,000 $240,000 TOTAL PROJECT REVENUES $0 $6,962,769 $6,962,769 $6,962,769 $6,962,769 $6,962,769 $6,962,769 $6,962,769 $6,962,769 $6,962,769 $6,962,769 $7,976,410 $77,604,100 Ma rket Appreci a ti on (Qua rterl y) 0.50% $0 $0 $0 $0 $34,814 $69,802 $104,965 $140,303 $175,819 $211,512 $247,383 $324,696 $1,309,293 TOTAL REVENUE $0 $6,962,769 $6,962,769 $6,962,769 $6,997,583 $7,032,571 $7,067,734 $7,103,072 $7,138,588 $7,174,281 $7,210,152 $8,301,106 $78,913,393
FIXED EXPENSES
Cons tructi on Cos ts 263,070$ $3,156,840 $2,367,630 $2,367,630 $2,367,630 $2,367,630 $2,367,630 $2,367,630 $2,367,630 $2,367,630 $2,367,630 $1,841,490 $0 $26,307,000 Model Upgra des $600,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $600,000 Permi ts & Fees 29,245$ $350,940 $263,205 $263,205 $263,205 $263,205 $263,205 $263,205 $263,205 $263,205 $263,205 $204,715 $0 $2,924,500 Tota l Cons tructi on Cos ts $4,107,780 $2,630,835 $2,630,835 $2,630,835 $2,630,835 $2,630,835 $2,630,835 $2,630,835 $2,630,835 $2,630,835 $2,046,205 $0 $29,831,500 Infl a ti on (Home Cons tructi on) 0.50% $0 $13,154 $26,374 $39,660 $53,013 $66,432 $79,918 $93,472 $107,094 $120,783 $104,643 $0 $704,543 TOTAL CONSTRUCTION COSTS $4,107,780 $2,643,989 $2,657,209 $2,670,495 $2,683,848 $2,697,267 $2,710,753 $2,724,307 $2,737,929 $2,751,618 $2,150,848 $0 $30,536,043
VARIABLE EXPENSES
Property Ta xes (1.1438%) $670.00 $67,000 $60,970 $54,940 $48,910 $43,738 $37,587 $31,436 $25,286 $19,518 $13,244 $6,971 $0 $409,600 Di rect Levi es (Per Qua rter) $99.17 $9,917 $9,024 $8,132 $7,239 $6,474 $5,563 $4,653 $3,743 $2,889 $1,960 $1,032 $0 $60,627 HOA $270.00 $27,000 $24,570 $22,140 $19,710 $17,280 $14,850 $12,420 $9,990 $7,560 $5,130 $2,700 $0 $163,350 Speci a l Ta xes (Per Qua rter) $814.21 $81,421 $74,093 $66,765 $59,437 $53,152 $45,677 $38,203 $30,728 $23,719 $16,095 $8,471 $0 $497,761 Other Indi rect Cos ts 5.00% $0 $348,138 $348,138 $348,138 $349,879 $351,629 $353,387 $355,154 $356,929 $358,714 $360,508 $415,055 $3,945,670 Ma rketi ng 1.25% $0 $87,035 $87,035 $87,035 $87,470 $87,907 $88,347 $88,788 $89,232 $89,679 $90,127 $103,764 $986,417 Cl os i ng Cos ts , Wa rra nty 1.25% $0 $87,035 $87,035 $87,035 $87,470 $87,907 $88,347 $88,788 $89,232 $89,679 $90,127 $103,764 $986,417 Commi s s i ons 3.0% $0 $208,883 $208,883 $208,883 $209,927 $210,977 $212,032 $213,092 $214,158 $215,228 $216,305 $249,033 $2,367,402 Admi n. a nd Overhea d 3.0% $197,283 $197,283 $197,283 $197,283 $197,283 $197,283 $197,283 $197,283 $197,283 $197,283 $197,283 $197,283 $2,367, 402 TOTAL VARIABLE EXPENSES $382,621 $1,097,032 $1,080,351 $1,063,671 $1,052,673 $1,039,381 $1,026,108 $1,012,853 $1,000,521 $987,013 $973,523 $1,068,900 $11,784,646 TOTAL FIXED AND VARIABLE EXPENSES $4,490,401 $3,741,021 $3,737,561 $3,734,166 $3,736,520 $3,736,648 $3,736,861 $3,737,160 $3,738,449 $3,738,631 $3,124,371 $1,068,900 $42,320,689 NET SALES REVENUE (BEFORE PROFIT) ($4,490,401) $3,221,748 $3,225,208 $3,228,603 $3,261,062 $3,295,923 $3,330,873 $3,365,912 $3,400,138 $3,435,650 $4,085,781 $7,232,206 $36,592,704 Entrepreneuri a l Profi t 8% $0 $557,022 $557,022 $557,022 $559,807 $562,606 $565,419 $568,246 $571,087 $573,942 $576,812 $664,088 $6,313,071 Net Proceeds ($4,490,401) $2,664,726 $2,668,187 $2,671,581 $2,701,256 $2,733,317 $2,765,454 $2,797,667 $2,829,051 $2,861,707 $3,508,969 $6,568,118 $30,279,632
Di s count Ra te 12% 0.97087 0.94260 0.91514 0.88849 0.86261 0.83748 0.81309 0.78941 0.76642 0.74409 0.72242 0.70138 Net Cash Flow ($4,359,613) $2,511,760 $2,441,769 $2,373,665 $2,330,127 $2,289,110 $2,248,567 $2,208,504 $2,168,232 $2,129,379 $2,534,954 $4,606,746 NET PRESENT VALUE $23,483,201
ROUNDED $23,480,000
PER LOT $234,800
IRR CALCULATIONS VALUE PERIOD 1 PERIOD 2 PERIOD 3 PERIOD 4 PERIOD 5 PE RIOD 6 PERIOD 7 PERIOD 8 PERIOD 9 PERIOD 10 PERIOD 11 PERIOD 12 NET INCOME (BEFORE PROFIT) ($23,483,201) ($4,490,401) $3,221,748 $3,225,208 $3,228,603 $3,261,062 $3,295,923 $3,330,873 $3,365,912 $3,400,138 $3,435,650 $4,085,781 $7,232,206 IRR (quarterly) 5.53%
Annualized 22.1%
Smith & Associates, Inc.
DRIFTON- QUARTERLY DISCOUNTING PERIOD PERIOD PERIOD PERIOD PERIOD PER IOD PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD I T E M 123456789 1 0 1 1 1 2 T O T A L S
SINGLE-FAMILY RESIDENTIAL
Tota l Number Devel oped 100 100 91 82 73 64 55 46 37 28 19 10 T o t a l N u m b e r C o n s t r u c t e d 1 299999999970 1 0 0 N u m b e r o f U n i t s s o l d 09999999999 1 0 1 0 0 Number of Uni ts Uns ol d 100 91 82 73 64 55 46 37 28 19 10 0 Average Selling Price - Including Lot Premium $742,879 $742,879 $ 742,879 $742,879 $742,879 $742,879 $742,879 $742,879 $742,879 $742,879 $742,879 $742,879 Tota l Revenues - Ba s e Pl a ns $0 $6,685,911 $6,685,911 $6,685,911 $6,685,911 $6,685,911 $6,685,911 $6,685,911 $6,685,911 $6,685,911 $6,685,911 $7,428,790 $74,287,900 Model Home Reca pture $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $240,000 $240,000 TOTAL PROJECT REVENUES $0 $6,685,911 $6,685,911 $6,685,911 $6,685,911 $6,685,911 $6,685,911 $6,685,911 $6,685,911 $6,685,911 $6,685,911 $7,668,790 $74,527,900 Ma rket Appreci a ti on (Qua rterl y) 0.50% $0 $0 $0 $0 $33,430 $67,026 $100,791 $134,724 $168,828 $203,101 $237,546 $312,174 $1,257,620 TOTAL REVENUE $0 $6,685,911 $6,685,911 $6,685,911 $6,719,341 $6,752,937 $6,786,702 $6,820,635 $6,854,739 $6,889,012 $6,923,457 $7,980,964 $75,785,520
FIXED EXPENSES
Construction Costs 273,330$ $3,279,960 $2,459,970 $2,459,970 $2,459,970 $2,459,970 $2,459 ,970 $2,459,970 $2,459,970 $2,459,970 $2,459,970 $1,913,310 $0 $27,333 ,000 Model Upgra des $600,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $600,000 Permi ts & Fees 30,638$ $367,656 $275,742 $275,742 $275,742 $275,742 $275,742 $275,7 42 $275,742 $275,742 $275,742 $214,466 $0 $3,063,800 Tota l Cons tructi on Cos ts $4,247,616 $2,735,712 $2,735,712 $2,735,712 $2,735,712 $2,735,712 $2,735,712 $2,735,712 $2,735,712 $2,735,712 $2,127,776 $0 $30,996,800 Infl a ti on (Home Cons tructi on) 0.50% $0 $13,679 $27,426 $41,241 $55,126 $69,080 $83,104 $97,198 $111,363 $125,598 $108,815 $0 $732,629 TOTAL CONSTRUCTION COSTS $4,247,616 $2,749,391 $2,763,138 $2,776,953 $2,790,838 $2,804,792 $2,818,816 $2,832,910 $2,847,075 $2,861,310 $2,236,591 $0 $31,729,429
VARIABLE EXPENSES
Property Ta xes (1.1438%) $585.00 $58,500 $53,235 $47,970 $42,705 $38, 189 $32,819 $27,448 $22,078 $17,042 $11,564 $6,086 $0 $357,636 Direct Levies (Per Quarter) $99.17 $9,917 $9,024 $8,132 $7,239 $6,474 $5,563 $4,653 $3,743 $2,889 $1,960 $1,032 $0 $60,627 HOA $270.00 $27,000 $24,570 $22,140 $19,710 $17,280 $14,850 $12,420 $9,990 $7,560 $5,130 $2,700 $0 $163,350 Speci a l Ta xes (Per Qua rter) $887.80 $88,780 $80,790 $72,800 $64,809 $57,956 $49,806 $41,656 $33,506 $25,863 $17,550 $9,237 $0 $542,750 Other Indi rect Cos ts 5.00% $0 $334,296 $334,296 $334,296 $335,967 $337 ,647 $339,335 $341,032 $342,737 $344,451 $346,173 $399,048 $3,789,276 Ma rketi ng 1.25% $0 $83,574 $83,574 $83,574 $83,992 $84,412 $84,834 $85,258 $85,684 $86,113 $86,543 $99,762 $947,319 Cl os i ng Cos ts , Wa rra nty 1.25% $0 $83,574 $83,574 $83,574 $83,992 $84,412 $84,834 $85,258 $85,684 $86,113 $86,543 $99,762 $947,319 Commi s s i ons 3.0% $0 $200,577 $200,577 $200,577 $201,580 $202,588 $203,601 $204,619 $205,642 $206,670 $207,704 $239,429 $2,273,566 Admi n. a nd Overhea d 3.0% $189,464 $189,464 $189,464 $189,464 $189,464 $189,464 $189,464 $189,464 $189,464 $189,464 $189,464 $189,464 $2,273, 566 TOTAL VARIABLE EXPENSES $373,661 $1,059,104 $1,042,526 $1,025,948 $1,014,893 $1,001,560 $988,244 $974,947 $962,565 $949,014 $935,482 $1,027,465 $11,355,408 TOTAL FIXED AND VARIABLE EXPENSES $4,621,277 $3,808,494 $3,805,664 $3,802,901 $3,805,731 $3,806,352 $3,807,060 $3,807,857 $3,809,639 $3,810,324 $3,172,072 $1,027,465 $43,084,837 NET SALES REVENUE (BEFORE PROFIT) ($4,621,277) $2,877,417 $2,880,247 $2,883,010 $2,913,610 $2,946,585 $2,979,641 $3,012,779 $3,045,099 $3,078,688 $3,751,385 $6,953,499 $32,700,683 Entrepreneuri a l Profi t 8% $0 $534,873 $534,873 $534,873 $537,547 $540,235 $542,936 $545,651 $548,379 $551,121 $553,877 $638,477 $6,062,842 Net Proceeds ($4,621,277) $2,342,544 $2,345,375 $2,348,137 $2,376,063 $2,406,350 $2,436,705 $2,467,128 $2,496,720 $2,527,567 $3,197,508 $6,315,022 $26,637,842
Di s count Ra te 12% 0.97087 0.94260 0.91514 0.88849 0.86261 0.83748 0.81309 0.78941 0.76642 0.74409 0.72242 0.70138 Net Cash Flow ($4,486,677) $2,208,072 $2,146,350 $2,086,289 $2,049,612 $2,015,281 $1,981,264 $1,947,573 $1,913,528 $1,880,747 $2,309,948 $4,429,229 NET PRESENT VALUE $20,481,218
ROUNDED $20,480,000
PER LOT $204,800
IRR CALCULATIONS VALUE PERIOD 1 PERIOD 2 PERIOD 3 PERIOD 4 PERIOD 5 PE RIOD 6 PERIOD 7 PERIOD 8 PERIOD 9 PERIOD 10 PERIOD 11 PERIOD 12 NET INCOME (BEFORE PROFIT) ($20,481,218) ($4,621,277) $2,877,417 $2,880,247 $2,883,010 $2,913,610 $2,946,585 $2,979,641 $3,012,779 $3,045,099 $3,078,688 $3,751,385 $6,953,499 IRR (quarterly) 5.69%
Annualized 22.7%
Smith & Associates, Inc.
V14/20 - QUARTERLY DISCOUNTING PERIOD PERIOD PERIOD PERIOD PERIOD PER IOD PERIOD PERIOD PERIOD PERIOD ITEM 1 2 345678 9 1 0 T OTALS
SINGLE-FAMILY RESIDENTIAL
Tota l Number Devel oped 100 100 88 76 64 52 40 28 16 4 Tota l Number Cons tructed 15 12 12 12 12 12 12 12 1 0 100 Number of Units s old 0 12 12 12 12 12 12 12 12 4 100
Number of Units Uns old 100 88 76 64 52 40 28 16 4 0
Avera ge Sell ing Pri ce - Including Lot Premi um $528,740 $528,740 $ 528,740 $528,740 $528,740 $528,740 $528,740 $528,740 $528,740 $528,740 Tota l Revenues - Ba se Pla ns $0 $6,344,880 $6,344,880 $6,344,880 $6, 344,880 $6,344,880 $6,344,880 $6,344,880 $6,344,880 $2,114,960 $52,87 4,000 Model Home Reca pture $0 $0 $0 $0 $0 $0 $0 $0 $0 $180,000 $180,000 TOTAL PROJECT REVENUES $0 $6,344,880 $6,344,880 $6,344,880 $6,344,880 $6,344,880 $6,344,880 $6,344,880 $6,344,880 $2,294,960 $53,054,000 Ma rket Apprecia tion (Qua rterly) 0.50% $0 $0 $0 $0 $31,724 $63,607 $95,6 50 $127,853 $160,216 $69,715 $548,766 TOTAL REVENUE $0 $6,344,880 $6,344,880 $6,344,880 $6,376,604 $6,408,4 87 $6,440,530 $6,472,733 $6,505,096 $2,364,675 $53,602,766
FIXED EXPENSES
Cons truction Costs 164,000$ $2,460,000 $1,968,000 $1,968,000 $1,968,000 $1,968,000 $1,968 ,000 $1,968,000 $1,968,000 $164,000 $0 $16,400,000 Model Upgra des $450,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $450,000 Permi ts & Fees 42,335$ $635,025 $508,020 $508,020 $508,020 $508,020 $508,020 $508,020 $508,020 $42,335 $0 $4,233,500 Tota l Cons truction Costs $3,545,025 $2,476,020 $2,476,020 $2,476,02 0 $2,476,020 $2,476,020 $2,476,020 $2,476,020 $206,335 $0 $21,083,500 Infla tion (Home Cons truction) 0.50% $0 $12,380 $24,822 $37,326 $49,89 3 $62,523 $75,215 $87,971 $8,399 $0 $358,530 TOTAL CONSTRUCTION COSTS $3,545,025 $2,488,400 $2,500,842 $2,513,346 $2,525,913 $2,538,543 $2,551,235 $2,563,991 $214,734 $0 $21,442,030
VARIABLE EXPENSES
Property Ta xes (1.1438%) $470.00 $47,000 $41,360 $35,720 $30,080 $24, 929 $19,176 $13,423 $7,670 $1,956 $0 $221,314 Direct Levies (Per Qua rter) $99.17 $9,917 $8,727 $7,537 $6,347 $5,260 $4,046 $2,832 $1,618 $413 $0 $46,697 HOA $250.50 $25,050 $22,044 $19,038 $16,032 $13,026 $10,020 $7,014 $4,008 $1,002 $0 $117,234 Specia l Ta xes (Per Qua rter) $448.10 $44,810 $39,433 $34,056 $28,678 $ 23,767 $18,282 $12,798 $7,313 $1,865 $0 $211,002 Other Indirect Costs 5.00% $0 $317,244 $317,244 $317,244 $318,830 $320 ,424 $322,026 $323,637 $325,255 $118,234 $2,680,138 Ma rketing 1.25% $0 $79,311 $79,311 $79,311 $79,708 $80,106 $80,507 $80,909 $81,314 $29,558 $670,035 Clos ing Cos ts , Wa rra nty 1.25% $0 $79,311 $79,311 $79,311 $79,708 $80,1 06 $80,507 $80,909 $81,314 $29,558 $670,035 Commis sions 3.0% $0 $190,346 $190,346 $190,346 $191,298 $192,255 $193,2 16 $194,182 $195,153 $70,940 $1,608,083 Admin. a nd Overhea d 3.0% $160,808 $160,808 $160,808 $160,808 $160,808 $160,808 $160,808 $160,808 $160,808 $160,808 $1,608,083 TOTAL VARIABLE EXPENSES $287,585 $938,584 $923,371 $908,158 $897,334 $885,224 $873,131 $861,05 5 $849,079 $409,099 $7,832,621 TOTAL FIXED AND VARIABLE EXPENSES $3,832,610 $3,426,985 $3,424,213 $3,421,504 $3,423,247 $3,423,767 $3,424,366 $3,425,047 $1,063,813 $409,099 $29,274,651 NET SALES REVENUE (BEFORE PROFIT) ($3,832,610) $2,917,895 $2,920,667 $2,923,376 $2,953,358 $2,984,721 $3,016,163 $3,047,686 $5,441,283 $1,955,576 $24,328,114 Entrepreneuria l Profit 8% $0 $507,590 $507,590 $507,590 $510,128 $512, 679 $515,242 $517,819 $520,408 $189,174 $4,288,221 Net Proceeds ($3,832,610) $2,410,305 $2,413,076 $2,415,785 $2,443,22 9 $2,472,042 $2,500,921 $2,529,867 $4,920,875 $1,766,402 $20,039,893
Dis count Ra te 11% 0.97324 0.94719 0.92184 0.89717 0.87315 0.84978 0.827 04 0.80491 0.78336 0.76240 Net Cash Flow ($3,730,034) $2,283,013 $2,224,465 $2,167,360 $2,133,315 $2,100,704 $2,068,365 $2, 036,306 $3,854,836 $1,346,701 NET PRESENT VALUE $16,485,031
ROUNDED $16,490,000
PER LOT $164,900
IRR CALCULATIONS VALUE PERIOD 1 PERIOD 2 PERIOD 3 PERIOD 4 PERIOD 5 PE RIOD 6 PERIOD 7 PERIOD 8 PERIOD 9 PERIOD 10 NET INCOME (BEFORE PROFIT) ($16,485,031) ($3,832,610) $2,917,895 $2,920,667 $2,923,376 $2,953,358 $2,984,721 $3,016,163 $3, 047,686 $5,441,283 $1,955,576 IRR (quarterly) 5.82%
Annualized 23.3%
Smith & Associates, Inc.
RECONCILIATION – INCOME APPROACH
FINISHED LOT VALUES
The extraction approach and discounted cash flow analysis were utilized to develop an opinion of value as finished lots through the income approach. The following table shows this overall relationship.
The concluded lot values noted above reflect reconciliation from the Income Approach.
RECONCILIATION – TOTAL REVENUES
The sales comparison approach and the income approach were utilized to develop an opinion of value as finished lots. The following table shows this overall relationship.
These conclusions are utilized in the development of values by ownership.
MINIMUM CONCLUDED
PRODUCT TYPE LOT SIZE (SF) EXTRACTION DCF LOT VALUE
Shor 2,788 SF $185,100 $186,300 $186,000
Lakelet 3,690 SF $195,500 $196,600 $196,000
Watersyde 4,000 SF $194,900 $198,900 $196,000
Wavmor 4,500 SF $188,200 $192,200 $190,000
Crestvue 4,675 SF $198,100 $202,300 $200,000
Bleau 5,000 SF $234,200 $234,800 $234,500
Drifton 5,500 SF $205,300 $204,800 $205,000
V14/20 3,690 SF $164,100 $164,900 $164,500
MINIMUM SALES COMPARISON INCOME CONCLUDED
PRODUCT TYPE LOT SIZE (SF) APPROACH APPROACH LOT VALUE
Shor 2,788 SF $185,000 $186,000 $185,000
Lakelet 3,690 SF $195,000 $196,000 $195,000
Watersyde 4,000 SF $195,000 $196,000 $195,000
Wavmor 4,500 SF $202,000 $190,000 $200,000
Crestvue 4,675 SF $202,000 $200,000 $200,000
Bleau 5,000 SF $207,000 $234,500 $225,000
Drifton 5,500 SF $212,000 $205,000 $210,000
V 14/20 3,690 SF $178,000 $164,500 $170,000
Smith & Associates, Inc.
HYPOTHETICAL MARKET VALUE
208 LOTS - LENNAR HOMES OF CALIFORNIA LLC
As noted in this report, the Lennar Homes ownership includes 208 lots in three takedowns. This includes the following.
First Takedown – 76 Lots
LEGAL APNs
Lots 1..4, 7..29, 34..53, 72..84
Greenbriar Phase 2, Village South
60 Finished Lots
201-1520-001..004, 007..014
201-1530-001..018, 023..026
201-1540-001..016
201-1550-010..019
Lots 19, 20, 45..58
Greenbriar Phase 2, Village 5
16 Finished Lots
201-1590-019, 020,
201-1590-045..058
Values for this segment are based on finished lot values identi fied in the prior section. The overall allocation of lots is as follows.
LEGAL APNs PROJECT # OF LOTS LOT VALUE CONCLUDED VALUE
Lots 1..4, 7..11, 72..81
Phase 2 South
201-1520-001..004
201-1520-007..011
201-1550-010..019
Watersyde 19 $195,000/Lot $3,705,000
Lots 12..29, 34..37
Phase 2 South
201-1530-001..018
201-1530-023..026
Crestvue 22 $200,000/Lot $4,400,000
Lots 38..53
Phase 2 South
201-1540-001..016 Shor 16 $185,000/Lot $2,960,000
Lots 82..84
Phase 2 South
Lots 19, 20, 45..58
Phase 2, Village 5
201-1520-012..014
201-1590-019, 020,
201-1590-045..058
Lakelet 19 $195,000/Lot $3,705,000
TOTALS 76 $14,770,000
The land component is identified at $14,770,000. In addition, Lennar Homes of California has completed 17 model homes, 9 production homes, and paid permits on the remaining lots. For the completed homes including the model homes, as well as those with a final permit , the assessed valuation for the improvements (As stipulated on the Permit) is assigned. For the homes without a final permit, the cost paid for the permit is assigned. The total allocation in val ue for the completed homes and permits is identified at $12,336,123 as of the effective date of valuation . These permits were verified thro ugh the City of Sacramento. The overall value for 76 Lots (Lennar Ownership) is calculated as follows.
ITEM TOTALS
Land Component $14,770,000
Completed Homes/Permits & Fees (Paid) $12,336,123
TOTAL VALUE
ROUNDED
$27,106,123
$27,105,000
A copy of the allocation of completed homes and fees paid is noted as follows.
Smith & Associates, Inc.