1 Appraisal Report Prepared on
40,716 SF of PF (Public Facilities) Zoned Land That Is A Portion Of Larger 32.08-Acre Parcel APN 0141-291-23, in San Bernardino, California 92408
Prepared for:
Sydney Morrison – Contracts Administrator
City of San Bernardino Municipal Water Department
Effective Date of Value: July 21, 2025
Date of Report: July 29, 2025
Prepared by:
Steven R. Smith, MSREA, MAI, SRA
And Benjamin Castro
[email protected]
909 856 6841
2 Steven R. Smith, MSREA, MAI, SRA
• Real Estate Consultants • Market Studies • Risk Analysis • Appraisals • 800 Community College #114, San Jacinto, CA 92583
909-856-6841, [email protected]
7/20/25
Purpose: The purpose of the appraisal is to estimate the as-is value of the fee simple estate in the subject property and it rental potential.
Intended Use/Client and Intended Users: The intended use of this appraisal report is to provide asset value to our clients for the purpose of a land exchange transaction, as it relates to the subject property. Our client, the intended user of this report, is the City of San Bernardino Municipal Water Department. This report may not be used for any other purpose than expressed above, nor by any other party, than to whom it is addressed, and the appraisers specifically disclaim any liability to such unauthorized third parties.
Scope of Work:The scope of work included a full inspection of the subject property; research into the market conditions and market data using CoStar, Loopnet, the Multiple Listing Services (MLS), and broker and market participant interviews; and analysis of the data and preparation of the report.
Client: The City of San Bernardino Municipal Water Department
Property Rights Appraised: The unencumbered fee simple ownership interest.
As-Is Effective Date of Value: July 18, 2025
Concluded As-Is Market Value-Fee Simple Estate $1,060,000 Concluded Market Rental Value: $0.20 per square foot per month, on a NNN basis or $97,700 per year.
Respectfully submitted,
Steven R. Smith, MSREA, MAI, SRA,
AG 2123, expires 7/20/25
Benjamin Castro, Certified General Appraiser
AG 040398, expires 8/30/2027
3 Table of Contents
THE INTRODUCTION ................................ ................................ ................................ ................................ ....... 4 THE LOCATION ................................ ................................ ................................ ................................ ............. 11 LAND DESCRIPTION ................................ ................................ ................................ ................................ ...... 12 HIGHEST AND BEST USE ................................ ................................ ................................ ............................... 15 THE SALES COMPARISON APPROACH ................................ ................................ ................................ ........... 18 COMMENTS ON INDUSTRIAL LAND COMPARABLES................................ ................................ ....................... 22 RECONCILIATION ................................ ................................ ................................ ................................ ......... 23 SUPPLEMENTAL MARKET RENT AND NET OPERATING INCOME ................................ ................................ ..... 24 DEFINITIONS / ASSUMPTIONS / LIMITING CONDITIONS ................................ ................................ ................ 26 ASSUMPTIONS AND LIMITING CONDITIONS ................................ ................................ ................................ .. 28 APPRAISER’S CERTIFICATIONS ................................ ................................ ................................ ...................... 29
4 THE INTRODUCTION
SUBJECT OCCUPANCY
The 0.93-acre portion of the subject’s larger 32.08-Acre property being appraised (see hypothetical condition section) is currently vacant, unimproved land.
CURRENT OWNERSHIP / PROPERTY HISTORY
According to our review of public records, title to the subject parcel is currently vested in the City of San Bernardino. Per the property contact interview, the subject is not currently listed for sale or lease, and is not in escrow to be purchased. No additional transfers of the subject title are known to have occurred during the past three years.
PROPERTY DESCRIPTION
The subject
property is a
40,716 SF
unimproved,
rectangular
shaped portion
of a larger 32.08-
Acre parcel
centrally located
along the west
elevation of the
lot line.
5 6
7 MARKET AND EXPOSURE TIME
Typically, exposure period is the amount of time the real property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal. Marketing period is an opinion of the amount of time it might take to sell the real property interest after the effective date of the appraisal.
Sales of similar type properties, including the sale comparables used in this report, were analyzed and had a wide range of exposure periods. According to knowledgeable professionals, the marketing time for properties like the subject varies considerably. According to interviews with brokers and market participants involved in these transactions, an adequate exposure for the subject would be approximately six to nine months - if properly priced and marketed.
Based on our findings, we believe an exposure and marketing time of six to nine months for the subject property is considered reasonable and appropriate.
MARKET TRENDS AND BROKER INTERVIEWS
Market trends for the industrial land market are based on recorded industrial zoned land sales in the city of San Bernardino from July 2023 to the present, excluding all non-arm’s length transactions. Our search uncovered 18 closed sales that are summarized in the tables that follow.
8 9
ASSESSED VALUATION AND TAXES:
In California, government-owned property is generally not subject to property taxes. The general exemption from local, state, and federal taxes for government owned property is based on the idea that the sovereign shouldn’t tax itself.
In general, the assessment of market value is limited to a maximum increase of two percent per year, unless the property is transferred or there is substantial new construction.
Proposition 13 typically requires reassessment of real property upon a change of ownership. In either event, the property is re-appraised to current market value, usually as evidenced by the sale price or the construction costs.
Assessed value is generally not considered an accurate reflection of market value, as it is not particularly sensitive to economic fluctuations affecting the property. If the estimate of market value is higher than the sale price, then Proposition 8 provides for the reassessment of real property due to a decline in market value. A property owner must petition for a reassessment in order to lower property taxes or receive a tax refund. If the owner disputes the reassessed value, an appeals procedure is in place for a more detailed reassessment of market value in accordance with Proposition 8.
Broker Interviews
Brokers were interviewed and/or information furnished from firms active in the subject’s market area. The interviews are as follows:
Michael Rademaker, MGR Realty. Mr. Rademaker is the founder of MGR Realty and has over 30 years of experience buying and leasing commercial properties throughout Southern California. He stated land sales have slowed and redevelopment projects have been delayed as investors wait and see where interest rates are headed. High borrowing and construction costs, combined with higher vacancy rates and lower demand, have made it financially unfeasible to develop a parcel to satisfy an investor’s return expectations. Additionally, he states the most likely buyer for the subject parcel would be an owner-user whose motivation would be the location and utility of the site, rather than any type of cap rate consideration.
Robert Kirkpatrick, SVN. Mr. Kirkpatrick has over 50 years of experience in the Southern California real estate market. He remains optimistic that the market will rebound in the next two or three quarters if interest rates remain where they are at or decrease. Still, marketing times have increased, and concessions, including free rent and significant tenant improvement allowances, remain prevalent in order to close leases in the submarket.
Art Sanchez, Sanchez Realty: Mr. Sanchez specializes in commercial and industrial properties throughout the Inland Empire. He has seen both investors and owner-users attracted to the Inland Empire as an alternative to the pricier Los Angeles and Orange County industrial markets, as owner-operators continue moving further from more established markets due to 10 newer restrictions and development moratoriums placed in those cities for certain businesses.
He remains optimistic about the long term prospects for the industrial and commercial markets in this area, based on the number of planned industrial projects that have been approved for future development in the area.
Mark Kegans, SIOR, Executive Managing Director, Newmark. Mr. Kegans is familiar with the subject property and has exclusively worked the Industrial/Development segment of the Inland Empire for over 35 years. He believes the subject has an ideal location and size for an entrepreneur rather than an institutional investor due to its smaller size and location. The type of use and development that would result in the highest value would be industrial or light- industrial, in his opinion. The market is currently bearish, with marketing times increasing for all property types, he explained. Additionally, he notes the reluctance of city planning departments to approve any new industrial projects.
Hector Benavidez, Keller Williams: Mr. Benavidez is the listing broker for Sale No. 6, which is currently in escrow. He has seen tremendous price appreciation for industrial zoned vacant land within the past several years, from both owner-users and investors. The recent trend has been for owner-users to acquire adjoining lots for plottage value, as premiums are being paid for larger lots that have more gated yard space for storage and truck/service vehicle parking.
The consensus opinion of other brokers and market participants we have interviewed for this assignment and previous assignments, is that there are many factors affecting the price both investors and owner-users are willing to pay for a parcel of land, with factors such as submarket location and surrounding development; lot shape/size/utility; egress/ingress (corner or interior parcel); topography; freeway proximity and exposure along primary arterials; and approvals or entitlements.
HYPOTHETICAL CONDITION / EXTRAORDINARY ASSUMPTIONS
This report utilizes the following two hypothetical conditions to reach our supportable opinion of the subject property’s market value. Our client has engaged us to value the fee simple rights of a +/- 0.93-acre (40,716 SF) portion of a larger 32.08-acre parcel, for which we must utilize the hypothetical condition that the portion of the subject property being appraised has already been subdivided and can be marketed and sold off individually, containing its own fee simple rights. This report utilizes no extraordinary assumptions.
INSPECTION DATE: The subject property was inspected on July 21, 2025.
11 THE LOCATION
San Bernardino County / Inland Empire
The subject property is located in the city of San Bernardino, the seat of San Bernardino County, which together with Riverside County, makes up the region known as the “Inland Empire”, one of the fastest growing regions in the country.
As land prices in Orange County and parts of Los Angeles County have historically moved upward, the industrial and warehousing base has moved outward - resulting in a vast new marketplace for developers/builders to create industrial parks in areas with comparatively affordable housing. As a whole, the Inland Empire to the east of Los Angeles has become a positive growth area for both employment and construction.
The Inland Empire - combined counties of Riverside and San Bernardino - is one of the fastest growing regions in the country. Primary reasons for this growth were lower housing costs and lower land costs for commercial and industrial development. The two county area of Riverside-San Bernardino forms the largest Metropolitan Statistical Area (MSA) in the nation with over 27,308 square miles. A population exceeding 4.5 million in January 2023 ranks the Inland Empire as the 14th most populous MSA in the United States.
San Bernardino is geographically the largest county in the nation. Riverside County stretches from Orange County to the Arizona Border. In both counties, most of the population resides in the county’s western portion.
The Inland Empire is still the fastest growing metropolitan area in Southern California and the second largest behind Los Angeles – having surpassed Orange and San Diego in population.
For the Month of June 2025, the unemployment rate for San Bernardino County was 5.9%, while the city of San Bernardino had an unemployment rate of 6.6 percent.
Neighborhood Surroundings
The subject’s neighborhood consists primarily of industrial light zoning and includes some commercial general, commercial heavy, office industrial park, and public facilities/recreation zoning, as well. The neighborhood may be described as E Street to the west, Mill Street to the north, Waterman Avenue to the east, and the Santa Ana River to the south.
The subject property is located midblock along the south side of Chandler place, approximately 270 yards east of E Street. There are restaurants, retail buildings, major medical facilities, religious buildings, schools, public parks, and access to the I-10 & 215 Freeways – all within 2.6 miles of the subject.
12 Land Description
Reference Drawings/Documents
Soils Report: None Provided
Environmental
Site Assessment: None Provided
Hazardous Waste /
Toxic Studies: None Provided
Preliminary Title Report: None Provided
Site Details
Address: S/O 333 Chandler Place, San Bernardino, California 92408 (No Recorded Address)
TG# 606-H5 (San Bernardino County)
APN: 0141-291-23 (Larger Parcel)
County: San Bernardino
Land Size: 1,397,271 SF (32.08 Acres, Larger Parcel)
Shape: Irregular (see plat map)
Zone: The subject larger parcel is located within a pocket Public Facilities (PF) zoned district.
Per Chapter 19.10 of the City of San Bernardino’s Development Code, The purpose of the PF zone is to provide for the continuation of existing and development of new schools, government
administrative, police, fire, libraries, social service, and other public facilities.
See Zoning map on the following page.
13 Flood Zone: The subject site is located within Flood Zone X500, community Panel No.060281-06071C-8683J; dated September 2, 2016. Zone X 500 is not located within the 100 -year flood zone. Flood insurance is generally not required. Please refer to the Flood Zone Map below.
14 Soils Condition: A geo-technical investigation report was not submitted for review.
This appraisal report assumes that all recommendations (for grading; compaction; and foundation design, construction, and maintenance of) provided by the soils engineer have been implemented, and that construction designs provided for adequate load -bearing capacity and structural engineering to support the existing subject structure(s).
Hazardous Waste/
Toxic Conditions: None Provided
Title, Easements and
Encroachments: A preliminary title report was not provided for review. No adverse conditions, easements or encroachments were observed during the inspection of the site. Identification of these items is of a legal nature and an attorney specializing in this field should be consulted for their opinion concerning these items.
This report is not intended to render any opinion whatsoever regarding any adverse title conditions, easements or
encroachments that may affect the subject property. The value estimate is, however, predicated upon there being no adverse title conditions, easements or encroachments that would cause a loss in value or prohibit development. No responsibility is assumed for any such conditions, or for any expertise or knowledge required to discover them.
Utilities: All public utilities are available and assumed adequate for industrial oriented use(s).
15 HIGHEST AND BEST USE
Highest and best use is defined as:
The reasonably, probable legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility and maximum productivity.1
The above definition of the “Highest and Best Use” is in reference to land that is unimproved.
In cases of improved land a determination of the contributory value of the improvements to the land must be made. The improvements on a site may be of inappropriate use but will usually continue until the land value in its highest and best use exceeds the total value of the property in its existing use.
It should be noted that a highest and best use determination represents an appraiser's opinion based upon his or her judgment and the application of several forms of analyses. Like value, it is not a fact that can be found.
It is also important to note that the highest and best use of a site as if unimproved and available to put to its highest and best use may be different from the highest and best use of the property as improved. This is especially true when the property improvements are not the most appropriate use but still add value to the site. In such cases, unless additional improvements are possible and feasible, the existing improvements will probably remain in use until the value of the land exceeds the total value of the property with the improvements.
Appraisal practice therefore dictates that highest and best use be analyzed from two standpoints: (1) the property as if unimproved and available for development; and (2) the property as improved.
The highest and best use of both land as though vacant and as improved must meet four basic tests:
1. Is the use legally permissible or reasonably possible?
2. Is the use physically possible on the site?
3. Is the use economically and financially feasible under proposed and projected market conditions?
4. Is the use estimated to be the most productive among the alternatives that are legally permissible, physically possible, and economically feasible?
1 Source: The Dictionary of Real Estate Appraisal, Appraisal Institute. 16 Highest and Best Use - As Vacant
Highest and Best Use of a site as vacant assumes that a parcel of land is vacant or could be vacant by demolishing the improvements. Given this assumption, this analysis determines the size, quality, and function that would provide the highest return to the land. The four criteria of the Highest and Best Use (see above) provide a basis for analysis.
To form an opinion as to the Highest and Best Use as vacant, we considered the physical attributes of the subject property, its zoning, location and known governmental influences, and the uses of surrounding properties.
Legally Permissible
Legal permissibility depends on public restrictions such as zoning, building codes, as well as the private or contractual restrictions found in deeds and long-term leases.
No information regarding private restrictions has been provided. It appears that there are no deed or easement restrictions on the property that could negatively impact development. No long-term ground lease encumbers the land. Therefore, legal restrictions as they apply to the subject property are primarily the public restrictions of zoning.
The subject is zoned PF (Public Facilities). The legal allowed uses are compatible with the adjacent and surrounding neighborhood improved properties.
Physically Possible
The size, shape, terrain, soil conditions, accessibility, and availability of utilities for a parcel of land affect its utility and adaptability. The physical characteristics of the subject site appear to be adequate in terms of shape, size, topography, available utilities and accessibility.
Although the exact soil composition is unknown, it appears that the soil is also adequate to support building improvements. Therefore, it appears that the physical characteristics would allow for the legally permissible uses.
Financially Feasible and Maximally Productive
According to the Real Estate Terminology Handbook, a real estate project is feasible when the analysis indicates that there is a likelihood of satisfying the explicit objectives and when a selected course of action is tested in the context of specific constraints and limited resources.
The feasibility of a real estate project is normally related to its economic potential.
An in-depth feasibility analysis on the possible alternative uses of the site is beyond the scope of this appraisal assignment. However, the regional, city, and neighborhood characteristics impacting the subject property, as well as overall market conditions have been investigated.
Details regarding each category are presented in respective sections of this appraisal report.
17 Conclusion
After reviewing overall market conditions, the subject’s location characteristics and competing developments, it is our opinion that the highest and best use of the subject site, as vacant and available for development, would likely be subsequent construction of light industrial zoned development dependent on feasibility study.
Highest and Best Use – As Improved
The subject is unimproved, vacant Public Facilities (PF) zoned land.
VALUATION METHODOLOGY
Typically, the process of appraising real property consists of compiling and analyzing data from three different perspectives; these approaches to value are:
• In the Cost Approach , the value of a property is derived by adding the estimated value of the land to the current cost of constructing a reproduction or replacement for the improvements and then subtracting the amount of depreciation (i.e., deterioration and obsolescence) in the structures from all causes.
• The Income Approach is based upon the principle that the value of an income producing property is the present worth of anticipated future benefits, which are comprised of The Annual Income Stream (Cash Flow or Net Income) and the Reversion Benefits (Resale Value).
• The Sales Comparison Approach is a method of comparing recent sales of similar properties to the subject property. This approach is based on the principle of substitution in that a prudent investor would pay no more for the real property than the cost of acquiring a satisfactory alternative property that possesses physical, economic and financial comparability. The value of a particular property tends to coincide to the value indicated by the actions of informed buyers and sellers in the marketplace for similar properties.
In this report, the subject is unimproved vacant land, and the Cost Approach to value is excluded.
The Income Approach is also excluded, as the property is vacant land with no leases encumbering it.
In the case of the subject appraisal, we have utilized the Sales Comparison Approach in estimating the Market Value As Is.
The valuation of the subject property follows.
18 THE SALES COMPARISON APPROACH
An investigation was undertaken to locate sales of similar commercial zoned land in the market area that could be used to provide direct market indications of the subject’s value. This survey focused primarily on the most comparable facilities/use to the subject property, which were deemed useful indicators of value for the subject property. Each comparable was visited and we attempted to verify the sales information with one or more of the parties to the transaction.
In this section, we contrast each sale comparable to the subject in terms of previously defined elements of comparison. The relative similarity of a comparable to the subject is expressed through a percentage adjustment or a dollar adjustment. The adjustments involve the appraiser’s judgment. Percentages are intended to reflect the magnitude and direction of the adjustment and should not be construed as a precise mathematical calculation based on quantifiable market evidence. In most instances, the large numbers of elements (or variables) that influence value in a real property transaction make it mathematically impossible to isolate and quantify a particular element’s impact on the final price.
In the case of the subject, the most appropriate unit of comparison is the price per square foot of land area, which reflects the primary value in the property. The following table summarizes the most relevant comparables in the valuation analysis. Photographs of each improved sales comparable as well as a map denoting their location relative to the subject are located in the Addenda of this report.
19 Item Subject
Location / Address: S/O 333 Chandler Place
San Bernardino
Assessor Parcel Number Portion of 0141-291-23
Proximity to Subject 606-H5 (San Bernardino)
Land SF 40,716
Sale Date N/A
Document Number N/A
Source Inspection
Interest Appraised Fee Simple
Sale Price N/A
$/Land SF: N/A
Property Rights Conveyed -
Adjusted Price -
Financing Terms -
Adjusted Price -
Conditions of Sale / Listing -
Adjusted Price -
Time (Market Conditions) -
Adjusted Price -
Expenditures Adjusted -
Adjusted Price -
Adjusted $/SF N/A
Financing: Terms N/A
COMPARABILITY/ADJUS
TMENTS
Property:
Site Accessibility Average E E E
Zoning PF (Public Facilities) CH / Inferior 20% IH (Industrial Heavy) E Land Area (SF) 40,716 37,209 102,366 7% 43,200
Shape / Utility Rectangular E E E
Topography Level E E E
Site / Building Improvements Vacant Land Vacant Land Vacant Land Vacant Land Overall Property
Adjustment:
-
Location:
Market Identity San Bernardino E E E
Transportation Linkages Conforming E E E
Street Location / Exposure Minor-Terminus of Minor Cul
de sac Street
Minor-Interior Primary-Interior -3% Minor-Interior
Neighborhood Surroundings Conforming E E E
Overall Location
Adjustment:
-
TOTAL ADJUSTMENT: -
INDICATED SUBJECT
$/LAND SF:
-
E = Equal; SI = Slightly Inferior; I = Inferior; SS = Slightly Superior; and S = Superior. $26.04
0%
$28.45$20.96
0%
0%
45% Cash-Conv. TD
$26.04
$26.04
0.0%
$26.04
0.0%
$26.04
0.0%
$26.04
0.0%
$26.04
0.0%
$26.04
$1,125,000
Fee Simple
CoStar / Broker
23868
4-Feb-25
43,200
0.87 MI NE
0136-321-19
San Bernardino
776 S. Lugo Avenue
3 Land Sale Comparables 1 Through 3
2 19800 Cajon Boulevard
San Bernardino
0266-011-18
9.6 Miles NW
102,366
9-Jun-25
132274
CoStar / Broker
Fee Simple
$2,800,000
$27.35
0.0%
$27.35
0.0%
$27.35
0.0%
$27.35
0.0%
$27.35
0.0%
$27.35
$27.35
63% Cash - Private Party 1st TD
7%
-3%
4%
1 393 S. Sierra Way
San Bernardino
0136-221-10
1.3 Miles NE
37,209
7-Jul-25
148816
CoStar / Broker
Fee Simple
$650,000
$17.47
0.0%
$17.47
0.0%
$17.47
0.0%
$17.47
0.0%
$17.47
0.0%
$17.47
$17.47
All Cash Sale
20%
0%
20%
20 Item Subject
Location / Address: S/O 333 Chandler Place
San Bernardino
Assessor Parcel Number Portion of 0141-291-23
Proximity to Subject 606-H5 (San Bernardino)
Land SF 40,716
Sale Date N/A
Document Number N/A
Source Inspection
Interest Appraised Fee Simple
Sale Price N/A
$/Land SF: N/A
Property Rights Conveyed -
Adjusted Price -
Financing Terms -
Adjusted Price -
Conditions of Sale / Listing -
Adjusted Price -
Time (Market Conditions) -
Adjusted Price -
Expenditures Adjusted -
Adjusted Price -
Adjusted $/SF N/A
Financing: Terms N/A
COMPARABILITY/ADJUS
TMENTS
Property:
Site Accessibility Average E E E
Zoning PF (Public Facilities) E E E
Land Area (SF) 40,716 76,666 3% 73,181 3% 27,181 -3%
Shape / Utility Rectangular E E E
Topography Level E E E
Site / Building Improvements Vacant Land Vacant Land Vacant Land Vacant Land Overall Property
Adjustment:
-
Location:
Market Identity San Bernardino E E E
Transportation Linkages Conforming E E E
Street Location / Exposure Minor-Terminus of Minor Cul
de sac Street
Minor-Cul de sac Primary-Corner-
Exposure to E/B
210 Freeway
-5% Primary-Interior -3%
Neighborhood Surroundings Conforming E E E
Overall Location
Adjustment:
-
TOTAL ADJUSTMENT: -
INDICATED SUBJECT
$/LAND SF:
-
E = Equal; SI = Slightly Inferior; I = Inferior; SS = Slightly Superior; and S = Superior. $33.59 $24.21$25.44
3% -6%-2%
0% -3%-5%
3% -3%3%
Conv. 1st TD 50% Cash-Seller FinancingAll Cash Sale
$32.61 $25.75$25.96
$32.61 $25.75$25.96
0.0% 0.0%0.0%
$32.61 $25.75$25.96
0.0% 0.0%0.0%
$32.61 $25.75$25.96
0.0% 0.0%0.0%
$32.61 $25.75$25.96
0.0% 0.0%0.0%
$32.61 $25.75$25.96
0.0% 0.0%0.0%
$32.61 $25.75$25.96
$2,500,000 $700,000$1,900,000
Fee Simple Fee SimpleFee Simple
CoStar / Broker CoStar / BrokerCoStar / Broker
6310 233192258499
9-Jan-25 16-Oct-2429-Oct-24
76,666 27,18173,181
1.6 Miles SE 0.7 MI NE4.5 Miles NW
0283-032-39, 45, 46 0136-431-330268-453-12, 14
San Bernardino San BernardinoSan Bernardino
10799 S. Artesia Street 247 E. Ennis Street0 Medical Center Drive 4 65
Land Sale Comparables 4 Through 6
21 Item Subject
Location / Address: S/O 333 Chandler Place
San Bernardino
Assessor Parcel Number Portion of 0141-291-23
Proximity to Subject 606-H5 (San Bernardino)
Land SF 40,716
Sale Date N/A
Document Number N/A
Source Inspection
Interest Appraised Fee Simple
Sale Price N/A
$/Land SF: N/A
Property Rights Conveyed -
Adjusted Price -
Financing Terms -
Adjusted Price -
Conditions of Sale / Listing -
Adjusted Price -
Time (Market Conditions) -
Adjusted Price -
Expenditures Adjusted -
Adjusted Price -
Adjusted $/SF N/A
Financing: Terms N/A
COMPARABILITY/ADJUS
TMENTS
Property:
Site Accessibility Average E E
Zoning PF (Public Facilities) E E
Land Area (SF) 40,716 56,192 67,082 3%
Shape / Utility Rectangular E Triangular / SI 3%
Topography Level E E
Site / Building Improvements Vacant Land Vacant Land Vacant Land Overall Property
Adjustment:
-
Location:
Market Identity San Bernardino E E
Transportation Linkages Conforming E E
Street Location / Exposure Minor-Terminus of Minor Cul
de sac Street
Cul-de-sac street Primary-Interior -3%
Neighborhood Surroundings Conforming E E
Overall Location
Adjustment:
-
TOTAL ADJUSTMENT: -
INDICATED SUBJECT
$/LAND SF:
-
E = Equal; SI = Slightly Inferior; I = Inferior; SS = Slightly Superior; and S = Superior. $21.36 $27.41
0% 3%
0% -3%
0% 6%
All Cash Sale Negotiable
$21.36 $26.61
$21.36 $26.61
0.0% 0.0%
$21.36 $26.61
0.0% 0.0%
$21.36 $26.61
0.0% -25.0%
$21.36 $35.48
0.0% 0.0%
$21.36 $35.48
0.0% 0.0%
$21.36 $35.48
$1,200,000 $2,380,000
Fee Simple Fee Simple
CoStar / Broker CoStar / Broker
233575 List Date: 5-23-25
30-Sep-24 Listing
56,192 67,082
1.8 Miles NE 1.3 Miles E
0280-082-10, 11, 09 0281-031-39
San Bernardino San Bernardino
8 892 E. Santa Fe Street 787 Orange Show Road
7 Land Sale Comparables 7 And 8
22 Comments on Industrial Land Comparables
Our eight land sale comparables (seven closed, one active listing) are all located within a 10- mile radius submarket within the city of San Bernardino, and range in size from 27,181 to 102,366 SF, bracketing the subject at 40,716 square feet. Unadjusted sale rates range from $17.47 to $32.61 per land square foot, with sale dates raging from September of 2024 to as recently as July of 2025.
A downward listing adjustment was applied to Land sale comparable No. 8 to reflect the likelihood of a lower negotiated selling price.
Additional comments on some of the comparables follow.
Sale No. 1 ($17.47/Land SF) sold recently in July 2025 for $650,000. The listing broker, Robert Bagley of KW Commercial, stated it was a straightforward deal with no conditions of sale. He also stated the CH (Heavy Commercial) zoning designation limited its marketability, since the city does not allow any type of industrial development within this zoning classification. If it was zoned industrial, he believes it would have sold at least in the low-to-mid $20’s per land square foot (Source of Zoning Adjustment). Opinion of lease rates: $0.20-$0.25/Land SF.
Sale 2 ($27.35/Land SF) was also a straightforward sale to an owner-user who will utilize the yard for his transportation business, according to listing agent Ethan Flor of Macleod & Co. He believes lease rates on industrial land range from $0.25 to $0.27/Land SF asking, depending on the location (closer to on-and-off ramps is more desirable).
Sale No. 3 ($26.04/Land SF) was sold to an owner-user who plans on utilizing the fenced and secured yard area for his trucking business. There were no entitlements or approvals at the time of sale, and the price paid was for the raw land only.
Sale No. 5 ($25.96/Land SF) was sold to an owner-user who purchased the raw land without entitlements or conditions of sale, per listing broker Abraham Mendoza of DAUM Commercial.
The buyer owns a trucking company and will utilize the property as a truck yard and contractor yard. A small upward adjustment was applied for its larger parcel size. After adjustments, this comparable indicates a subject value of $25.44/Land SF.
Sale No. 6 ($25.75/Land SF) sold as raw land to an owner-user and was partially seller financed (no impact on sale price, per broker Javier Castillo of RE Advisers). The owner will relocate his pallet business to the site. An upward adjustment for its larger parcel size was more than offset by downward adjustment for its superior street location/exposure to the 210-Freeway eastbound lanes. After adjustments, this comparable indicates a subject value of $25.44/Land SF.
Sale No. 8 ($26.61/Land SF, Listing Status Adjusted) is our active listing, which is currently being offered at $2,380,000, or $35.48/Land SF. We spoke directly with the listing agent, Jag Singh of KW Commercial, who stated there has been very little interest at the offering price, and that it will soon be lowered to $2,100,000 ($31.30/Land SF). He thinks the market will 23 remain soft for the foreseeable future, as tenants and owner-users watch worry about tariffs and high construction/borrowing costs.
Indicated Value - Sales Comparison Approach
After adjustments, the sales indicate a value range from $20.96 to $33.59/Land SF, and average $25.72 per land square foot (closed sales).
Based on the valuation analysis, the indicated subject value at $26.00/Land SF (Rounded) is considered reasonable and well supported by the comparable sales, and the market derived research.
Reconciliation
Our concluded price per land square foot at $26.00 is applied to the entire parcel is considered reasonable and well supported by the market data and accepted appraisal methodology.
$26.00/Land SF x 40,716 SF $1,058,616
Rounded To: $1,060,000
Concluded Market Value
24 Supplemental Market Rent and Net Operating Income
At the request of the client, additional information on the subject property will be provided.
This will include an estimate of projected market rent for industrial zoned land; and the subject potential net operating income.
The first step in this approach is to estimate the market rental rate for the property. The estimate of building market rent is based primarily on broker interviews. As previously mentioned, we interviewed several listing brokers active in the submarket to get their opinion about lease and sale prices for industrial building and land. This includes Robert Bagley of KW Commercial; Shawn O’Gorman of O’Gorman Pacific Realty; Ethan Flor and Chase MacLeod of MacLeod & Co.; Wes Klein of Keller Williams; and Kyle Williams of Ashwill Associates.
All agreed that leasing activity has decreased significantly since its peak in 2021, and that tariffs have also negatively impacted the market as tenants anticipate lower warehouse and truck parking space requirements.
The aforementioned leasing agents believe the subject yard would reasonably lease from $0.20 to $0.25/Land SF.
Based on the market data and research as well as the consensus of brokers interviewed and prior land appraisal assignments near the subject location, the concluded building market rental of $0.20/Land SF (Net Basis) is considered reasonable and well supported by the market data and research.
Vacancy and Collection Loss Estimate
Based on CoStar Analytics and giving consideration to the Federal Reserve interest rate cycle, inflationary pressures, and opinions of brokers and other market participants in the submarket, the concluded vacancy-collection allowance of 10.0% over a stabilized operation (5 to 10-year holding period) is considered to be reasonable.
Operating Expenses
The subject has been owner occupied and no historical expenses were provided. Market evidence and interviews with brokers and professionals within the subject market area indicates that most properties with similar characteristics reflect a passive, net income expense basis, with the tenant paying any property taxes, insurance, management, and long-term capital items, including utilities and general property maintenance.
Management: We have estimated non-reimbursable management expenses at 1.5% of effective gross income, which considers the size of the project and responsibilities of the management and is typical of other similar sized properties.
Maintenance/reserves: In practice, most landlords do not include this as an operating expense; however, prudent management would set aside some amount for replacement of 25 long-lived items. For this analysis, we will apply maintenance/reserve expense at $2,000 per year.
Projected gross income and operating expenses for the subject property are as shown in the table on the following page.
Based on the market data and research, the concluded potential net operating income for the subject property is $84,627
Capitalization Rate estimate
The consensus opinion of market participants interviewed, including the aforementioned listing agents as well as developers, is that investors would likely require a rate of return between 7.5% to 8.0% based on the subject risk profile. The table below shows the value based on overall rates from 7.00% to 8.25%.
SF Rental ($/Land SF) Total
40,716 $0.20 $97,718
40,716 $97,718
-$9,772
$87,947
Management - % of EGI 1.50% $1,319
$0.05 $2,000
Total Expenses ($3,319)
$0.08 3.8%
$84,627
Description Months Rental Basis
Land Market Rent x 12 Market (Net)
Base Rental Income
Less Vacancy & Collection Loss 10.0%
Effective Gross Income
Reserves
$/PSF Year / % EGI
Net Operating Income
Less: Operating Expenses
Cap Rate: Value: $/SF
7.00% $1,208,962 $29.69
7.25% $1,167,274 $28.67
7.50% $1,128,365 $27.71
7.75% $1,091,966 $26.82
8.00% $1,057,842 $25.98
8.25% $1,025,786 $25.19
26 Definitions / Assumptions / Limiting Conditions
27 Definition of Market Value:
"The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: Buyer and seller are typically motivated; Both parties are well informed or well advised, and acting in what they consider their own best interests; A reasonable time is allowed for exposure in the open market; Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale." (Source: Code of Federal Regulations, Title 12, Chapter I, Part 34.42(g]; also Interagency Appraisal and Evaluation Guidelines, Federal Register, 75 FR 77449, December 10, 2010, page 77472)
Definition of As Is Market Value As is:
"The estimate of the market value of real property in its current physical condition, use, and zoning as of the appraisal date." (Source: Appraisal Institute, The Dictionary of Real Estate Appraisal, 6th ed. (Chicago:
Appraisal Institute, 2015); also Interagency Appraisal and Evaluation Guidelines, Federal Register, 75 FR 77449, December 10, 2010, page 77471)
Definition of Hypothetical Condition:
A condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis. Comment:
Hypothetical conditions are contrary to known facts about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis.
28 ASSUMPTIONS AND LIMITING CONDITIONS
This appraisal is subject to the following assumptions and limiting conditions:
No responsibility is assumed for matters legal in character or nature. No opinion is rendered as to title, which is assumed to be good and marketable. All existing liens, encumbrances, and assessments have been disregarded, unless otherwise noted, and the property is appraised as though free and clear, having responsible ownership and competent management.
We have examined the property described herein exclusively for the purposes of identification and description of the real property. The objective of our data collection is to develop an opinion of the highest and best use of the subject property and make meaningful comparisons in the valuation of the property.
The appraiser's observations and reporting of the subject improvements are for the appraisal process and valuation purposes only and should not be considered as a warranty of any component of the property. This appraisal assumes (unless otherwise specifically stated) that the subject is structurally sound, and all components are in working condition.
We will not be required to give testimony or appear in court because of having made an appraisal of the property in question, unless specific arrangements to do so have been made in advance, or as otherwise required by law.
We have noted in this appraisal report any significant adverse conditions (such as needed repairs, depreciation, the presence of hazardous wastes, toxic substances, etc.) discovered during the data collection process in performing the appraisal.
Unless otherwise stated in this appraisal report, we have no knowledge of any hidden or unapparent physical deficiencies or adverse conditions of the property (such as, but not limited to, needed repairs, deterioration, the presence of hazardous wastes, toxic substances, adverse environmental conditions, etc.) that would make the property less valuable, and have assumed that there are no such conditions and make no guarantees or warranties, express or implied. We will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because we are not experts in the field of environmental hazards, this appraisal report must not be considered as an environmental assessment of the property. We obtained the information, estimates, and opinions furnished by other parties and expressed in this appraisal report from reliable public and/or private sources that we believe to be true and correct.
We will not disclose the contents of this appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice, and/or applicable federal, state or local laws.
29 APPRAISER’S CERTIFICATIONS
We do hereby certify that, except as otherwise noted in this report:
We have made a personal inspection of the property that is the subject of this report.
We have no past, present or prospective interest or bias in the property that is the subject of this report and no personal interest or bias with respect to the parties involved.
To the best of our knowledge and belief, the statements of fact contained in this report, upon which the analysis, opinions, and conclusions expressed herein are based, are true and correct.
The analysis, opinions, and conclusions contained in this report are limited only by the reported assumptions and limiting conditions imposed by the terms of our assignment or by the undersigned and are our personal, impartial, and unbiased professional analysis, opinions, and conclusions.
The reported analysis, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice and in conformity conforms to the requirements of the code of professional ethics and standards of professional appraisal practice of the Appraisal Institute.
The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.
The Appraisal Institute has a voluntary program of continuing education requirements. Steven R. Smith is certified through 2025 with his education requirement.
In accordance with the Competency Provision of the Uniform Standards of Professional Appraisal Practice (USPAP), We have verified that our knowledge and experience is sufficient to allow us to competently complete this appraisal unless stated otherwise within this report.
The appraisers further certify and agree that:
Our compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.
This appraisal assignment was not based on a requested minimum valuation, a specific valuation, or the approval of a loan.
We previously appraised the subject’s larger parcel, with an effective date of value of November 5, 2024.
Any person who receives a copy of this appraisal report as a consequence of disclosure requirements that apply to an appraiser's client, does not become an intended user of this report unless the client specifically identified them at the time of the assignment. The appraiser's written consent and approval must be obtained before this appraisal report can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media.
30 Respectfully submitted,
Steven R. Smith, MSREA, MAI, SRA,
AG 2123, expires 7/20/25
Benjamin Castro, Certified General Appraiser
AG 040398, expires 8/30/2025
31 APPRAISER QUALIFICATIONS
STEVEN R. SMITH, MSREA, MAI, SRA, AG 2123
MS IN REAL ESTATE APPRAISAL, BA IN REAL ESTATE FINANCE
FULL TIME APPRAISER SINCE 1976. PART TIME UNIVERSITY INSTRUCTOR IN REAL ESTATE AT CAL STATE UNIVERSITY 2005-2015.
PRIOR WORK EXPERIENCE INCLUDED LOAN SERVICING, LOAN ORIGINATION, LOAN ADMINISTRATION, TITLE INSURANCE SALES, REAL ESTATE SALE, MORTGAGE LENDING, AND REAL ESTATE SALES MANAGEMENT.
APPRAISAL EXPERIENCE INCLUDES PERFORMING APPRAISALS AND MARKET STUDIES ON EXISTING, PROPOSED AND DISTRESSED PROPERTIES, NON-PERFORMING OR DESTABILIZED PROJECT.
COURT TESTIMONY EXPERIENCE INCLUDES A RANGE OF CIVIL AND CRIMINAL CASES, PROFESSIONAL LIABILITY CASES, MORTGAGE FRAUD AND REAL ESTATE FRAUD CASES; AS BOTH AN EXPERT WITNESS OR AS A REBUTTAL WITNESS. DEPOSITION TESTIMONY HAS ALSO INCLUDED IRS AND EMINENT DOMAIN CASES.
NO COURT TESTIMONY HAS BEEN PROVIDED IN EITHER OF THESE TYPES OF CASES AS EVERYONE HAS SETTLED.
SEMINARS CREATED AND DELIVERED INCLUDE:
MORTGAGE FRAUD AND THE APPRAISERS ROLE- AI-2005,
BUILDING TRANSFERABLE SKILL-SETS, AI – 2005,
PREDATOR LENDING, CLIENT PRESSURES & APPRAISAL FRAUD, 2004, MORTGAGE FRAUD, CASES & CONSEQUENCES, 2002,
REAL ESTATE FRAUD, APPRAISERS LIABILITIES & RESPONSIBILITIES, 2000, REAL ESTATE FRAUD & THE APPRAISERS ROLE, 2000, APPRAISAL REVIEW- SREA - 1989.
APPRAISER LIABILITY SEMINAR- SREA - 1988.
CAL LEAGUE OF SA VINGS INSTITUTIONS - APPRAISAL QUALITY CONTROL - 1988.
RESIDENTIAL APPRAISAL SEMINAR - AIREA - 1987.
BOSTON SAFE GUIDELINES - 1985-1988.
MORTGAGE BANKERS OF AMERICA-APPRAISAL REVIEW - 1984-86.
NARAMU-APPRAISAL REVIEW & FRAUD PREVENTION - 1984-1985.
UNIFORM APPRAISAL GUIDELINES - 1984-88.
99 POINT APPRAISAL REVIEW WORKSHOP - 1984-1986.
EXPERIENCE CREDIT WORKSHOP-USPAP COMPLIANCE, APPRAISAL INSTITUTE 1991.
USPAP COMPLIANCE, APMW, 1991.
ESTATE AND LUXURY HOME APPRAISAL REVIEW – APPRAISAL INSTITUTE - 1997.
SPECIALTIES INCLUDE: LUXURY HOMES, AND FORENSIC APPRAISAL REVIEW CONTACT: 909-856-6841, WEB PAGE: HTTP://SRSREA.COM, EMAIL: [email protected]
32 PROFESSIONAL QUALIFICATIONS – BENJAMIN CASTRO
Have accumulated extensive experience in valuing all types of real property, including residential, commercial, retail, office, industrial, and vacant land. Clients include local lenders, law and CPA firms, insurance companies, state and local agencies, as well as private individuals.
EMPLOYMENT HISTORY
Certified General Appraiser
2017-2023
The Miller Company (Corona, CA.)
Worked with staff of experienced appraisers valuing real property throughout Southern California. Duties included identification of the appraisal problem; scope of work determination; data collection and property description, including broker interviews; developing highest and best use analysis; and reconciliation of value. Properties appraised primarily included retail, commercial, mixed-use, industrial, office, and vacant land, among others. Interests valued include fee simple and leased fee which include perspective and assignment conditions as well as discounting.
Staff Appraiser
2016-2017
The Doré Group (San Diego, CA.)
Prepared summary appraisal and lease analysis reports for various clients, including CPA’s, banks, law firms, investors, developers, owner-users, credit retail tenants, and counties and agencies throughout the State of California, including eminent domain via condemnation and easement acquisition. Duties included the typical valuation process that resulted in credible, supportable value conclusions. Properties appraised included retail, commercial, industrial, office, agricultural, institutional, and vacant land, among others. Interests valued included fee simple, leased fee, leasehold, as well as partial interests.
Certified General Appraiser / Valuation Analyst
2015-2016
CBRE Valuation Services (San Diego, CA.)
As part of the Small Lending Solutions program at CBRE, worked with a team of salaried appraisers valuing a variety of retail, industrial, and small office properties.
Valuation Associate
2007-2014
Appraisal Pacific (San Marcos, CA.)
Responsibilities included field inspections and participating in all aspects of the appraisal process, including research, broker interviews, comparable selections and adjustments, 33 and reconciliation of values, among others.
EDUCATION
University of California, Los Angeles
Bachelor of Arts, Psychology
CERTIFICATION
Certified General Real Estate Appraiser
BREA Appraiser Identification No.: AG040398 (Expiration Date: August 30, 2027)