Attachment H - Fiscal and Economic Impact Reports — San Marcos City Council, July 23, 2024

ATTACHMENT H

FISCAL & ECONOMIC IMPACT REPORTS

18201 Von Karman Suite 220
Irvine, CA 92612

($200,000)
($100,000)
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$664,642
($127,791)
$536,851
Total Recurring General Fund
Revenues
Total Recurring General Fund
Expenditures
Net Fiscal Impact

($500,000)
($400,000)
($300,000)
($200,000)
($100,000)
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$544,331
($410,905)
$133,426
Total Recurring General Fund
Revenues
Total Recurring General Fund
Expenditures
Net Fiscal Impact

PROJECT SUMMARY

CITY OF SAN MARCOS

PACIFIC SPECIFIC PLAN PROJECT

FISCAL IMPACT SUMMARY

FISCAL IMPACT ANALYSIS

CITY BUDGET SUMMARY

DEMOGRAPHICS

CASE STUDY REVENUES

CASE STUDY EXPENDITURES

MULTIPLIER REVENUES

MULTIPLIER EXPENDITURES

Page 1 of 18 ends

RECURRING GENERAL FUND REVENUES 1
AMOUNT % OF TOTAL AMOUNT % OF TOTAL
SECURED PROPERTY TAX $395,644 59.5% $249,453 45.8%
UNSECURED PROPERTY TAX $39,564 6.0% $6,860 1.3%
PROPERTY TRANSFER TAX $7,181 1.1% $9,134 1.7%
PROPERTY TAX IN-LIEU OF VEHICLE LICENSE FEE $174,072 26.2% $110,451 20.3% DIRECT AND INDIRECT SALES TAX $6,695 1.0% $51,904 9.5%
FRANCHISE FEES $7,176 1.1% $23,074 4.2%
LICENSES AND PERMITS $2,531 0.4% $8,138 1.5%
FINES AND FORFEITURES $462 0.1% $1,486 0.3%
CFD REVENUE $31,316 4.7% $83,831 15.4%
TOTAL RECURRING GENERAL FUND REVENUES $664,642 100.0% $544,331 100.0% RECURRING GENERAL FUND EXPENDITURES 2
AMOUNT % OF TOTAL AMOUNT % OF TOTAL
PUBLIC WORKS $18,587 14.545% $59,766 14.545%
DEVELOPMENT SERVICES $10,200 7.982% $32,798 7.982%
PUBLIC SAFETY $62,382 48.816% $200,584 48.815%
PARKS AND RECREATION $3,190 2.496% $10,258 2.496%
OTHER FINANCING USES $0 0.000% $0 0.000%
GENERAL GOVERNMENT $33,432 26.161% $107,499 26.162%
TOTAL RECURRING GENERAL FUND EXPENDITURES $127,791 100.0% $410,905 100.0%

NET FISCAL IMPACT

TOTAL ANNUAL RECURRING GENERAL FUND SURPLUS/(DEFICIT)

TOTAL ANNUAL REVENUE/EXPENDITURE RATIO
NOTES:
1 Please see Exhibits 5-7 and 9 for the derivation of these calculations. 2 Please see Exhibits 8 and 10 for the derivation of these calculations. *All figures subject to rounding

APPROVED PLAN PROPOSED PLAN
EXHIBIT 1

CITY OF SAN MARCOS

FISCAL IMPACT SUMMARY

APPROVED PLAN PROPOSED PLAN

PACIFIC SPECIFIC PLAN PROJECT

APPROVED PLAN PROPOSED PLAN
$536,851

5.20 $133,426

1.32

Page 2 of 18 ends

TOTAL BUILDING BUILDING TOTAL BUILDING BUILDING ESTIMATED TOTAL

GROSS SPACE SPACE ESTIMATED ESTIMATED SPACE SPACE ESTIMATED AVERAGE ESTIMATED LAND USE TYPE ACRES ACRES 1 SF1 VALUE/BSF 2 VALUE 2 ACRES 1 UNITS 1 SF1 VALUE/BSF VALUATION 2,3 VALUE 2
GRAND TOTAL 33.2 11.02 480,000 $544 $261,120,000 7.90 228 344,236 $461 $728,387 $166,072,160 NON-RESIDENTIAL 11.02 480,000 $261,120,000
INDUSTRIAL FLEX R&D 11.02 480,000 $544 $261,120,000
PARKING STRUCTURE 4 5.05 220,000
1,440 PARKING SPACES
RESIDENTIAL 7.90 228 344,236 $166,072,160
ROWHOMES 4.26 116 185,756 $484 $754,072 $87,472,352
VILLAS 3.64 112 158,480 $486 $701,784 $78,599,808
NOTES
1 Source: City of San Marcos.
2 Source: Zonda Research, "Pricing and Absorption Study: Hall Land Company Study, San Marcos, CA. 3 "Estimated average sale price" refers to the Estimated closing price per Zonda assumptions. 4 Source: Zonda Research, "Pacific Specific Plan SP22-0001 Update January 2023".

Cost of the 220,000 SF parking struture is incorporated into the $544 price per SF of the Industrial Flex R&D
EXHIBIT 2

CITY OF SAN MARCOS

PROJECT SUMMARY

APPROVED PLAN

PACIFIC SPECIFIC PLAN PROJECT

PROPOSED PLAN

Page 3 of 18 ends

POPULATION, HOUSEHOLDS, AND EMPLOYMENT (2024)
POPULATION1 95,998
EMPLOYMENT2 41,300
TOTAL PERSONS SERVED 3 116,648
HOUSEHOLDS 1 93,734
MFR AVERAGE HOUSEHOLD SIZE4 2.75
NOTES
1 California Department of Finance, Housing and Population Information, January 1, 2024. 2 Source: Calif. Employment Development Dept. January 2024 4 US Census for the City of San Marcos
EXHIBIT 3

CITY OF SAN MARCOS

PACIFIC SPECIFIC PLAN PROJECT

CITY DEMOGRAPHICS
3 Assumes City population plus 50% of employees.

Page 4 of 18 ends

SF PERSONS

PER DIRECT PERSONS PER DIRECT PERSONS
LAND USE TYPE BSF EMPLOYEE 2
EMPLOYEES SERVED BSF UNITS HOUSEHOLD 1

RESIDENTS EMPLOYEES SERVED
GRAND TOTAL 480,000 390 195 344,236 228 2.75 627 0 627

NON-RESIDENTIAL
INDUSTRIAL FLEX R&D 480,000 1,232 390 195
PARKING STRUCTURE 3 220,000 0 0 0
1,440 PARKING SPACES
NON-RESIDENTIAL SUBTOTAL 480,000 390 195

RESIDENTIAL
ROWHOMES 185,756 116 2.75 319 0 319
VILLAS 158,480 112 2.75 308 308
RESIDENTIAL SUBTOTAL 344,236 228 627 627
NOTES
1 Source: Zonda Research.
2 Source: Commercial Buildings Energy Consumption Survey (CBECS), 2016. 3 Source: Zonda Research, "Pacific Specific Plan SP22-0001 Update January 2023".

Cost of the 220,000 SF parking struture is incorporated into the $544 price per SF of the Industrial Flex R&D
*All figures subject to rounding

PROPOSED PLAN
EXHIBIT 4

CITY OF SAN MARCOS

PACIFIC SPECIFIC PLAN PROJECT

PROJECT DEMOGRAPHICS

APPROVED PLAN

Page 5 of 18 ends

APPROVED PROPOSED

LAND USE TYPE PLAN PLAN

ALL PROPERTY TAXES
SECURED PROPERTY TAXES $395,644 $249,453
UNSECURED PROPERTY TAXES $39,564 $6,860
PROPERTY TRANSFER TAXES $7,181 $9,134
PROPERTY TAX IN-LIEU OF VLF $174,072 $110,451
GRAND TOTAL ALL PROPERTY TAXES $616,462 $375,898

RESIDENTIAL PROPERTY TAXES
SECURED PROPERTY TAXES $0 $249,453
UNSECURED PROPERTY TAXES $0 $6,860
PROPERTY TRANSFER TAXES $0 $9,134
PROPERTY TAX IN-LIEU OF VLF $0 $110,451
TOTAL RESIDENTIAL PROPERTY TAXES $0 $375,898

NON-RESIDENTIAL PROPERTY TAXES
SECURED PROPERTY TAXES $395,644 $0
UNSECURED PROPERTY TAXES $39,564 $0
PROPERTY TRANSFER TAXES $7,181 $0
PROPERTY TAX IN-LIEU OF VLF $174,072 $0
TOTAL NON-RESIDENTIAL PROPERTY TAXES $616,462 $0

APPROVED PROPOSED

LAND USE TYPE PLAN PLAN

GRAND TOTAL
ESTIMATED BUILDOUT VALUE $261,120,000 $166,072,160
ESTIMATED EXEMPTIONS $0 ($1,436,400)
ESTIMATED ASSESSED VALUE $261,120,000 $164,635,760
ESTIMATED SECURED PROPERTY TAXES $395,644 $249,453

RESIDENTIAL
ESTIMATED BUILDOUT VALUE $0 $166,072,160
ESTIMATED EXEMPTIONS $0 ($1,436,400)
HOMEOWNER'S EXEMPTION (ANNUALLY) 1 $7,000
PERCENT OF SALE UNITS TAKING HOMEOWNER'S EXEMPTION1 90% ESTIMATED ASSESSED VALUE $0 $164,635,760
ESTIMATED SECURED PROPERTY TAXES $0 $249,453

NON-RESIDENTIAL
ESTIMATED BUILDOUT VALUE $261,120,000 $0
ESTIMATED EXEMPTIONS $0 $0
ESTIMATED ASSESSED VALUE $261,120,000 $0
ESTIMATED SECURED PROPERTY TAXES $395,644 $0

APPROVED PROPOSED

LAND USE TYPE PLAN PLAN
GRAND TOTAL $39,564 $6,860

RESIDENTIAL
ESTIMATED UNSECURED PROPERTY TAXES $0 $6,860
UNSECURED TAXES AS A % OF SECURED 2.75%

NON-RESIDENTIAL
ESTIMATED UNSECURED PROPERTY TAXES $39,564 $0
UNSECURED TAXES AS A % OF SECURED 10.00%
[1] Per the City of San Marcos Housing Needs Assessment 2019 only 9% of City's of housing stock is made up of condominiums/townhouses and mobile homes DTA estimates that 90% of these units will be owner occupied

UNSECURED PROPERTY TAX CALCULATION

PACIFIC SPECIFIC PLAN PROJECT

PROPERTY TAX SUMMARY
EXHIBIT 5

CITY OF SAN MARCOS

ESTIMATED PROPERTY TAX REVENUES (CASE STUDY)

SECURED PROPERTY TAX CALCULATION

Page 6 of 18 ends

APPROVED PROPOSED

LAND USE TYPE PLAN PLAN
GRAND TOTAL $7,181 $9,134

RESIDENTIAL
ESTIMATED PROPERTY TRANSFER TAXES $0 $9,134
ESTIMATED BUILDOUT VALUE $0 $166,072,160
TRANSFER TAX AS A % OF ASSESSED VALUE 0.11%
PROPERTY TRANSFER TAX PASSED THROUGH TO CITY OF SAN MARCOS 50.00% RESIDENTIAL PROPERTY TURNOVER RATE 10.00%

NON-RESIDENTIAL
ESTIMATED PROPERTY TRANSFER TAXES $7,181
ESTIMATED BUILDOUT VALUE $261,120,000
TRANSFER TAX AS A % OF ASSESSED VALUE 0.11%
PROPERTY TRANSFER TAX PASSED THROUGH TO CITY OF SAN MARCOS 50.00% NON-RESIDENTIAL PROPERTY TURNOVER RATE 5.00%

APPROVED PROPOSED

LAND USE TYPE PLAN PLAN
GRAND TOTAL $174,072 $110,451

RESIDENTIAL
ESTIMATED PROPERTY TAX IN-LIEU OF VLF $0 $110,451
ESTIMATED BUILDOUT VALUE $0 $166,072,160
ESTIMATED EXISTING ASSESSED VALUE $0 $1,060,692
PROPERTY TAX IN-LIEU OF VLF INCREASE PER $1,000 OF AV $0.67

NON-RESIDENTIAL
ESTIMATED PROPERTY TAX IN-LIEU OF VLF $174,072 $0
ESTIMATED BUILDOUT VALUE $261,120,000 $0
ESTIMATED EXISTING ASSESSED VALUE $1,060,692 $0
PROPERTY TAX IN-LIEU OF VLF INCREASE PER $1,000 OF AV $0.67

PROPERTY TAX IN-LIEU OF VEHICLE LICENSE FEE CALCULATION

PROPERTY TRANSFER TAX CALCULATION
EXHIBIT 5 - CONTINUED

CITY OF SAN MARCOS

PACIFIC SPECIFIC PLAN PROJECT

ESTIMATED PROPERTY TAX REVENUES (CASE STUDY)

Page 7 of 18 ends

PROPERTY TAX ALLOCATION (AS A PORTION OF THE 1% GENERAL PROPERTY TAX LEVY) CITY OF SAN MARCOS3,4

8.832%
FIRE DISTRICT3,4

6.320%
TOTAL 15.152%
PROPERTY TRANSFER TAX RATE AND ALLOCATION 5
TRANSFER TAX AS A % OF ASSESSED VALUE 0.11%
PROPERTY TRANSFER TAX PASSED THROUGH TO CITY OF SAN MARCOS 50.00%

PROPERTY TAX IN-LIEU OF VLF ASSUMPTIONS
TOTAL CITY OF SAN MARCOS GROSS ASSESSED VALUE 6
$7,756,621,947
TOTAL CITY PROPERTY TAX IN-LIEU VLF REVENUES 6
$5,191,930
PROPERTY TAX IN-LIEU OF VLF INCREASE PER $1,000 OF AV $0.67 NOTES
1 Estimate, subject to change.
2 Based on typical DTA baseline assumptions.
3 Based on "General Fund" levy for Tax Rate Area (TRA) 131115. Data provided by the County of San Diego Auditor-Controller's Office. 4 Based on the average of the rates for TRA 13115.
5 Source: California Revenue & Taxation Code §11901, et seq.; San Marcos Municipal Code §3.12.020. *All figures subject to rounding

PROPERTY TAX AND PROPERTY TRANSFER TAX RATES AND ASSUMPTIONS EXHIBIT 5 - CONTINUED

CITY OF SAN MARCOS

PACIFIC SPECIFIC PLAN PROJECT

ESTIMATED PROPERTY TAX REVENUES (CASE STUDY)
6 Source: State Controller's Office Division of Accounting and Reporting, Revenue and Taxation Code Section 97.70 (c)(1)(B)(i) - Vehicle License Fee Adjustment Amounts. ]

Page 8 of 18 ends

APPROVED PROPOSED

LAND USE TYPE PLAN PLAN
GRAND TOTAL $6,695 $51,904

RESIDENTIAL SALES TAXES

DIRECT SALES TAX NA NA

INDIRECT SALES TAX - TAXABLE RESIDENT PURCHASES
ROWHOMES $0 $26,407
VILLAS $0 $25,497
TOTAL RESIDENTIAL SALES TAXES $0 $51,904

NON-RESIDENTIAL SALES TAXES
DIRECT SALES TAX1
INDUSTRIAL FLEX R&D $0 NA
PARKING STRUCTURE 4 $0 NA
INDIRECT SALES TAX - TAXABLE EMPLOYEE PURCHASES $6,695 $0 TOTAL NON-RESIDENTIAL SALES TAXES $6,695 $0
TAXABLE SALES PER SF 1
INDUSTRIAL FLEX R&D $0.00 $0.00
DISPLACED TAXABLE SALES 2
20% 20%
1 Based on typical DTA baseline assumptions.
2 Based on typical DTA baseline assumptions.

EXHIBIT 6

CITY OF SAN MARCOS

ESTIMATED SALES TAX REVENUES (CASE STUDY)

DIRECT SALES TAX ASSUMPTIONS

SALES TAX SUMMARY

PACIFIC SPECIFIC PLAN PROJECT

Page 9 of 18 ends

DISPOSABLE INCOME PER HOUSEHOLD (OWNER)
ESTIMATED AVERAGE HOUSEHOLD INCOME (ASSUMES 3:1 INCOME TO HOUSEHOLD PAYMENT RATIO) 1 RESIDENTIAL $184,473

MORTGAGE ASSUMPTIONS

RESIDENTIAL
AVERAGE PROJECTED SALES PRICE PER UNIT $754,072
AVERAGE MORTGAGE (20% DOWN PAYMENT) $603,258
ANNUAL MORTGAGE PAYMENT (7.0% FOR 30 YEARS) $48,162
ADDITIONAL ANNUAL PROPERTY TAXES & HOA $13,329
RETAIL TAXABLE EXPENDITURES (AS A % OF DISPOSABLE INCOME) RESIDENTIAL 24.6810%
EMPLOYEES (ANNUAL SPENDING PER EMPLOYEE) 2 $6,867
RESIDENTIAL (ANNUAL SPENDING PER HOUSEHOLD) HOMEOWNER $22,765 1 Based on typical DTA baseline assumptions.
2 Based on typical DTA baseline assumptions.

RESIDENTIAL / NON-RESIDENTIAL INDIRECT SALES TAX ASSUMPTIONS 2 EXHIBIT 6 - CONTINUED

CITY OF SAN MARCOS

PACIFIC SPECIFIC PLAN PROJECT

ESTIMATED SALES TAX REVENUES (CASE STUDY)

RESIDENTIAL INDIRECT SALES TAX ASSUMPTIONS

Page 10 of 18 ends

SALES TAX % TO CITY 1 1.00%
CITY RETAIL TAXABLE PURCHASE CAPTURE RATE 2 50%
FY 2023-24 AD VALOREM PROPERTY TAX RATE (13115) 1.12602% PROPOSED SCHOOL CFD 0.00000%
CITY CFD SPECIAL TAXES $1,038.55

OTHER DIRECT ASSESSMENTS
VECTOR CONTROL $7.92
CWA WATER AVAILABILITY $10.00
MOSQUITO SURVEILLANCE $2.28
MWD WATER STANDBY CHARGE $11.50
SEWER SERVICE CHARGE $467.88
TOTAL ETR 1.329997%
NOTES
1 Estimate, subject to change.
2 Estimate, subject to change.
* All figures subject to rounding
EXHIBIT 6 - CONTINUED

CITY OF SAN MARCOS

PACIFIC SPECIFIC PLAN PROJECT

ESTIMATED SALES TAX REVENUES (CASE STUDY)

SAMPLE PROPERTY TAX BILL

CITY INDIRECT SALES TAX ASSUMPTIONS

Page 11 of 18 ends

RESIDENTIAL APPROVED PROPOSED

LAND USE TYPE COMMERCIAL INDUSTRIAL UNITS PLAN PLAN
TOTAL CFD SPECIAL TAXES $31,316 $83,831
RESIDENTIAL CFD SPECIAL TAXES 1
CFD 98-01 IA 1 228 $43,562
CFD 2001-01 (FIRE) 228 $40,269
TOTAL RESIDENTIAL CFD SPECIAL TAXES $83,831
NON-RESIDENTIAL CFD SPECIAL TAXES 1
CFD 98-01 IA 1 16.07 $16,273 $0
CFD 2001-01 (FIRE) 16.07 $15,043 $0
TOTAL NON-RESIDENTIAL CFD SPECIAL TAXES $31,316 $0

RESIDENTIAL APPROVED PROPOSED

LAND USE TYPE COMMERCIAL INDUSTRIAL UNITS PLAN PLAN
TOTAL CFD SPECIAL TAXES $51,811 $152,958
RESIDENTIAL CFD SPECIAL TAXES 1
CFD 98-02 (ZONES A - E)2
228 $64,360
CFD 98-02 (ZONE F)2, 3
228 NA
CFD 2011-012, 4
228 $88,599
TOTAL RESIDENTIAL CFD SPECIAL TAXES $152,958
NON-RESIDENTIAL CFD SPECIAL TAXES 1
CFD 98-02 (ZONES A - E)2

11.02 $8,611 $0
CFD 98-02 (ZONE F)2, 3

11.02 NA NA
CFD 2011-012, 5
480,000 $43,200 $0
TOTAL NON-RESIDENTIAL CFD SPECIAL TAXES $51,811 $0

LAND USE PER ACRE PER SF PER UNIT
RESIDENTIAL 1
CFD 98-01 IA 1 $191.06
CFD 2001-01 (FIRE) $176.62
CFD 98-02 (ZONES A - E)2
282.28$
CFD 98-02 (ZONE F)2, 3
NA
CFD 2011-012, 4
388.59$
COMMERCIAL 1
CFD 98-01 IA 1 $1,337.45
CFD 2001-01 (FIRE) $1,236.34
CFD 98-02 (ZONES A - E)2
1,172.97$
CFD 98-02 (ZONE F)2, 3
N/A
CFD 2011-012, 5
$0.4100
OFFICE 1
CFD 98-01 IA 1 $2,674.91
CFD 2001-01 (FIRE) $2,472.69
CFD 98-02 (ZONES A - E)2
1,172.97$
CFD 98-02 (ZONE F)2, 3
NA
CFD 2011-012, 5
$0.4100
INDUSTRIAL 1
CFD 98-01 IA 1 $1,012.65
CFD 2001-01 (FIRE) $936.09
CFD 98-02 (ZONES A - E)2
781.46$
FY 2023-24 SPECIAL TAX RATE
EXHIBIT 7

CITY OF SAN MARCOS

ESTIMATED CFD SPECIAL TAX REVENUES (CASE STUDY)

CFD SPECIAL TAX SUMMARY - GENERAL FUND IMPACTS

CFD SPECIAL TAX RATE ASSUMPTIONS

PACIFIC SPECIFIC PLAN PROJECT

CFD SPECIAL TAX SUMMARY - NON-GENERAL FUND IMPACTS (EXCLUDED FROM ANALYSIS) ACRES / SQ. FT.

ACRES / SQ. FT.

Page 12 of 18 ends

EXHIBIT 7

CITY OF SAN MARCOS

ESTIMATED CFD SPECIAL TAX REVENUES (CASE STUDY)

PACIFIC SPECIFIC PLAN PROJECT
CFD 98-02 (ZONE F)2, 3
NA
CFD 2011-012, 5
$0.0900
NOTES
1 Source: City of San Marcos. Assumes Senior Residential property is charged as Commercial property under the RMA. Subject to confirmation by the City. 2 Special assessments collected from the CFD are deposited into Special Funds, not the General Fund. Therefore, these CFD revenues are excluded from this analysis. 3 No special tax rate for Zone F has been established for the project. 4 "Townhome" Rate, per dwelling unit
5 "Retail" Rate, per building square foot
*All figures subject to rounding

Page 13 of 18 ends

APPROVED PROPOSED

PLAN PLAN
ESTIMATED RECURRING GENERAL GOVERNMENT OVERHEAD EXPENDITURES1 $33,432 $107,499 TOTAL RECURRING CITY GENERAL FUND EXPENDITURES (EXCLUDING GENERAL GOVERNMENT OVERHEAD)2 $56,759,353 TOTAL RECURRING CITY GENERAL GOVERNMENT OVERHEAD3 $20,110,184 TOTAL RECURRING GENERAL FUND EXPENDITURES $76,869,537
RECURRING CITY GENERAL GOVERNMENT OVERHEAD (% OF TOTAL RECURRING GENERAL FUND EXPENDITURES)3 35.43% MARGINAL INCREASE IN GENERAL GOVERNMENT COSTS 100%
NOTES
1 Based on total recurring project general fund expenditures (excluding general government overhead) from Exhibit 12. 2 Based on City of San Marcos Operating Budget, Fiscal Year 2023-24. *All figures subject to rounding
3 General Government Overhead Expenditures defined as costs for City Council, Administration, Housing and Neighborhood Services, City Attorney, City Clerk, Human Resources/Risk Management, Finance/Information Systems, and Real Property Services.

EXHIBIT 8

CITY OF SAN MARCOS

ESTIMATED GENERAL GOVERNMENT EXPENDITURES (CASE STUDY)

GENERAL GOVERNMENT ASSUMPTIONS

GENERAL GOVERNMENT EXPENDITURES CALCULATION

PACIFIC SPECIFIC PLAN PROJECT

Page 14 of 18 ends

APPROVED PROPOSED

REVENUE CATEGORY PLAN PLAN
FRANCHISE FEES $7,176 $23,074
LICENSES AND PERMITS $2,531 $8,138
FINES AND FORFEITURES $462 $1,486
TOTAL ESTIMATED MULTIPLIER REVENUES $10,169 $32,698
REVENUE CATEGORY MULTIPLIER 1
BASIS

SALES TAX NA CASE STUDY

PROPERTY TAX NA CASE STUDY
FRANCHISE FEES $36.80 PERSONS SERVED
LICENSES AND PERMITS $12.98 PERSONS SERVED
FINES AND FORFEITURES $2.37 PERSONS SERVED
NOTES
1 Based on City of San Marcos Operating Budget, Fiscal Year 2023-24 *All figures subject to rounding

MULTIPLIER BASED REVENUE ASSUMPTIONS
EXHIBIT 9

CITY OF SAN MARCOS

ESTIMATED MULTIPLIER BASED GENERAL FUND REVENUES

MULTIPLIER BASED GENERAL FUND REVENUE SUMMARY

PACIFIC SPECIFIC PLAN PROJECT

Page 15 of 18 ends

APPROVED PROPOSED

EXPENDITURE CATEGORY PLAN PLAN
PUBLIC WORKS $18,587 $59,766
DEVELOPMENT SERVICES $10,200 $32,798
PUBLIC SAFETY $62,382 $200,584
PARKS AND RECREATION $3,190 $10,258
OTHER FINANCING USES $0 $0
TOTAL MULTIPLIER EXPENDITURES $94,359 $303,406
EXPENDITURE CATEGORY MULTIPLIER 1
BASIS
PUBLIC WORKS $95.32 PERSONS SERVED
DEVELOPMENT SERVICES $52.31 PERSONS SERVED
PUBLIC SAFETY $319.91 PERSONS SERVED
PARKS AND RECREATION $16.36 PERSONS SERVED
OTHER FINANCING USES $0.00 PERSONS SERVED
NOTES
1 Based on City of San Marcos Operating Budget, Fiscal Year 2023-24 *All figures subject to rounding

MULTIPLIER BASED EXPENDITURE ASSUMPTIONS
EXHIBIT 10

CITY OF SAN MARCOS

ESTIMATED MULTIPLIER BASED GENERAL FUND EXPENDITURES

MULTIPLIER BASED GENERAL FUND EXPENDITURE SUMMARY

PACIFIC SPECIFIC PLAN PROJECT

Page 16 of 18 ends

TOTAL REVENUE PROJECTION
REVENUE CATEGORY REVENUES TYPE METHOD DISCOUNT 1

MULTIPLIER

REVENUES INCLUDED IN FISCAL IMPACT ANALYSIS
SALES TAX $22,713,452 RECURRING CASE STUDY NA NA
PROPERTY TAX $29,253,790 RECURRING CASE STUDY NA NA
SPECIAL TAXES/ASSESSMENTS $6,867,600 RECURRING CASE STUDY NA NA TRANSIENT OCCUPANCY TAX $1,500,420 RECURRING CASE STUDY 0% NA FRANCHISE FEES $4,301,617 RECURRING PERSONS SERVED 0% $36.80 LICENSES AND PERMITS $1,517,917 RECURRING PERSONS SERVED 0% $12.98 FINES AND FORFEITURES $277,455 RECURRING PERSONS SERVED 0% $2.37 TOTAL INCLUDED GENERAL FUND REVENUES $66,432,251 $52.15 CHARGES FOR SERVICES 3
DEPARTMENTAL SERVICES $9,901,962 NA NA NA NA
REIMBURSEMENTS $2,980,411 NA NA NA NA
TOTAL CHARGES FOR SERVICES $12,882,373

REVENUES EXCLUDED FROM FISCAL IMPACT ANALYSIS
USE OF MONEY AND PROPERTY 4 $1,784,000 NA NA NA NA
MISCELLANEOUS REVENUES $227,652 NA NA NA NA
OTHER FINANCING SOURCES $4,458,800 NA NA NA NA
INTERGOVERNMENTAL REVENUES $955,833 NA NA NA NA
DEVELOPER FEES $18,000 NA NA NA NA
TOTAL EXCLUDED GENERAL FUND REVENUES $7,444,285
TOTAL GENERAL FUND REVENUES + CHARGES FOR SERVICES $86,758,909 TOTAL RECURRING GENERAL FUND REVENUES $66,432,251
NOTES
1 Certain revenues may not be be expected to increase one-to-one with the new development. 2 Source: FY 2023-24 Budget.
3 All Charges for Services are deducted from expenditures on Exhibit 12. 4 Interest income is modeled on a case study basis on Exhibit 8. *All figures subject to rounding
EXHIBIT 11

CITY OF SAN MARCOS
FY 2023-24 GENERAL FUND REVENUE SUMMARY

PACIFIC SPECIFIC PLAN PROJECT

Page 17 of 18 ends

CHARGES FOR

TOTAL SERVICES EXPENDITURE PROJECTION
EXPENDITURE CATEGORY EXPENDITURES ADJUSTMENT TYPE METHOD 1 DISCOUNT 2

MULTIPLIER

EXPENDITURES INCLUDED IN FISCAL IMPACT ANALYSIS

GENERAL GOVERNMENT EXPENDITURES
CITY COUNCIL $265,389 RECURRING CASE STUDY NA NA
ADMINISTRATION $10,144,799 RECURRING CASE STUDY NA NA
ECONOMIC DEVELOPMENT $346,950 RECURRING CASE STUDY NA NA CITY ATTORNEY $855,000 RECURRING CASE STUDY NA NA
CITY CLERK $478,316 RECURRING CASE STUDY NA NA
HUMAN RESOURCES/ RISK MANAGEMENT $4,022,278 RECURRING CASE STUDY NA NA FINANCE $2,313,973 RECURRING CASE STUDY NA NA
INFORMATION SYSTEMS $2,272,280
REAL PROPERTY SERVICES ` $94,199 RECURRING CASE STUDY NA NA TOTAL GENERAL GOVERNMENT EXPENDITURES $20,793,184 ($683,000) $20,110,184 $0.00

PUBLIC WORKS
OPERATIONS $12,069,517 ($889,211) RECURRING PERSONS SERVED 0% $95.32 ENGINEERING $0 $0 RECURRING PERSONS SERVED 0% $0.00
STORMWATER PROGRAM MANAGEMENT $0 $0 RECURRING PERSONS SERVED 0% $0.00 TOTAL PUBLIC WORKS $12,069,517 ($889,211)
$11,180,306 PERSONS SERVED 0% $95.32

DEVELOPMENT SERVICES
ADMINISTRATION $1,598,379 ($287,792) RECURRING PERSONS SERVED 0% $11.17 PLANNING $1,382,353 ($248,896) RECURRING PERSONS SERVED 0% $9.66 BUILDING $1,592,770 ($286,782) RECURRING PERSONS SERVED 0% $11.13 ENGINEERING $2,092,472 ($376,754) RECURRING PERSONS SERVED 0% $14.63 WATERSHED PROGRAM MANAGEMENT $817,969 ($147,277) RECURRING PERSONS SERVED 0% $5.72 TOTAL DEVELOPMENT SERVICES $7,483,943 ($1,347,500)
$6,136,443 PERSONS SERVED 0% $52.31

PUBLIC SAFETY
FIRE DEPARTMENT $21,561,202 ($6,953,448) RECURRING PERSONS SERVED 0% $124.54 LAW ENFORCEMENT $23,361,084 ($445,000) RECURRING PERSONS SERVED 0% $195.37 TOTAL PUBLIC SAFETY $44,922,286 ($7,398,448)
$37,523,838 PERSONS SERVED 0% $319.91

PARKS AND RECREATION
PARKS AND RECERATION $4,482,980 ($2,564,214) RECURRING PERSONS SERVED 0% $16.36 TOTAL PARKS AND RECREATION $4,482,980 ($2,564,214)
$1,918,766 PERSONS SERVED 0% $16.36

OTHER FINANCING USES
ANNUAL REPLACEMENT/REHAB TRANSFERS $0 RECURRING PERSONS SERVED 90% $0.00 TOTAL OTHER FINANCING SOURCES $0 $0
$0 PERSONS SERVED 90% $0.00
TOTAL INCLUDED EXPENDITURES $89,751,910 $76,869,537

EXPENDITURES EXCLUDED FROM FISCAL IMPACT ANALYSIS
TRANSFERS OUT $831,000 NA NA NA NA
TOTAL EXCLUDED GENERAL FUND EXPENDITURES $831,000
TOTAL GENERAL FUND EXPENDITURES $90,582,910 $76,869,537 Ratio

26.16%
NOTES
1 Persons Served method assumes City population plus 50% of employees. 2 Certain expenditures may not be expected to increase one-to-one with the new development. * Source: FY 2023-24 Budget.
*All figures subject to rounding
EXHIBIT 12

CITY OF SAN MARCOS
FY 2023-24 GENERAL FUND EXPENDITURE SUMMARY

PACIFIC SPECIFIC PLAN PROJECT

Page 18 of 18 ends

$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
$80,000,000
$90,000,000

$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
$350,000,000

CITY OF SAN MARCOS

PACIFIC SPECIFIC PLAN

ECONOMIC IMPACT ANALYSIS - (APPROVED PLAN)

RECURRING JOBS

RECURRING IMPACTS

ONE-TIME JOBS

ONE TIME IMPACTS

JOB HOUSING BALANCE

SUMMARY

Page 1 of 7 ends

EXHIBIT 1A

PACIFIC SPECIFIC PLAN

RECURRING EMPLOYMENT - APPROVED PLAN

ASSUMPTIONS
I. RESIDENTIAL LAND USE ASSUMPTIONS

LAND USE CATEGORY UNITS
II. NON-RESIDENTIAL LAND USE ASSUMPTIONS
LAND USE CATEGORY 1 EMPLOYEES/1,000 SQ. FT. 2 SQ. FT. 1 INDUSTRIAL FLEX R&D 0.81 480,000
480,000

RECURRING EMPLOYMENT
III. CITY
DIRECT EMPLOYEES 3 INDIRECT EMPLOYEES 4 INDUCED EMPLOYEES 4 TOTAL EMPLOYEES INDUSTRIAL FLEX R&D 390 84 94 568
TOTAL RECURRING EMPLOYMENT 390 84 94 568
NOTES:
* All figures subject to rounding
4 Source: San Marcos City IMPLAN multipliers.
1 Source: City of San Marcos.
2 Commercial Buildings Energy Consumption Survey (CBECS), 2018. 3 Based on multiplying Category SF by Employees/1,000 SF metric.

Page 2 of 7 ends

EXHIBIT 2A

PACIFIC SPECIFIC PLAN

RECURRING ECONOMIC IMPACTS - APPROVED PLAN

ASSUMPTIONS
% INCOME SPENT TOTAL RESIDENT
I. RESIDENTIAL SPENDING ASSUMPTIONS HOUSEHOLD INCOME IN CITY SPENDING / YR.

II. NON-RESIDENTIAL OUTPUT ASSUMPTIONS AVERAGE OUTPUT / EMPLOYEE 1 OUTPUT / YR. 1 INDUSTRIAL FLEX R&D $155,876 $60,791,486

RECURRING OUTPUT
III. CITY
DIRECT OUTPUT INDIRECT OUTPUT 1 INDUCED OUTPUT 1 TOTAL OUTPUT INDUSTRIAL FLEX R&D $60,791,486 $13,858,409 $12,641,579 $87,291,474 TOTAL RECURRING OUTPUT $60,791,486 $13,858,409 $12,641,579 $87,291,474 NOTES:
* All figures subject to rounding
1 Source: San Marcos City IMPLAN multipliers.

Page 3 of 7 ends

EXHIBIT 3A

PACIFIC SPECIFIC PLAN

ONE-TIME EMPLOYMENT -APPROVED PLAN

ASSUMPTIONS
I. RESIDENTIAL LAND ASSUMPTIONS UNITS
0 0
II. NON-RESIDENTIAL LAND USE ASSUMPTIONS SQ. FT.

INDUSTRIAL FLEX R&D 480,000
0 220,000
III. PUBLIC FACILITIES TOTAL COST

PROJECT INFRASTRUCTURE NA

ONE-TIME EMPLOYMENT
IV. CITY
DIRECT EMPLOYEES 1 INDIRECT EMPLOYEES 1 INDUCED EMPLOYEES 1

TOTAL EMPLOYEES
INDUSTRIAL FLEX R&D 1,549 196 377 2,122
TOTAL ONE-TIME EMPLOYEES 1,549 196 377 2,122
NOTES:
* All figures subject to rounding
1 Source: San Marcos City IMPLAN multipliers (IMPLAN Sector 58: Construction of new non-residential structures).

Page 4 of 7 ends

EXHIBIT 4A

PACIFIC SPECIFIC PLAN

ONE-TIME IMPACTS - APPROVED PLAN

ASSUMPTIONS

ESTIMATED
I. RESIDENTIAL CONSTRUCTION COST ASSUMPTIONS UNITS COST PER SQ. FT. COST PER UNIT 0 0 1012 to 1721 $175,000
II. NON-RESIDENTIAL CONSTRUCTION COST ASSUMPTIONS IMPROVEMENT VALUE 1 CONSTRUCTION COST PER SQ. FT.

INDUSTRIAL FLEX R&D $221,952,000 $462
0 $0 #DIV/0!
III. PUBLIC FACILITIES TOTAL COST

PROJECT INFRASTRUCTURE NA

ONE-TIME OUTPUT
IV. CITY
DIRECT OUTPUT INDIRECT OUTPUT 2 INDUCED OUTPUT 2 TOTAL OUTPUT 3 INDUSTRIAL FLEX R&D $221,952,000 $34,650,562 $50,905,558 $307,508,119 TOTAL ONE-TIME OUTPUT $221,952,000 $34,650,562 $50,905,558 $307,508,119 NOTES:
1 Assumes that improvement value is approximately 85% of total valuation. 2 Source: San Marcos City IMPLAN multipliers (IMPLAN Sector 58: Construction of new non-residential structures). 3 Parking strructure costs are inputed in the over all costs * All figures subject to rounding

Page 5 of 7 ends

EXHIBIT 5A

PACIFIC SPECIFIC PLAN

JOBS-HOUSING BALANCE - APPROVED PLAN

ASSUMPTIONS
I. EXISTING DEMOGRAPHICS

CITY OF SAN MARCOS
HOUSING UNITS 1 32,972
EMPLOYEES 2 41,300
II. JOB IMPACTS 3

CITY OF SAN MARCOS
DIRECT IMPACT 390
ADDITIONAL INDIRECT 84
ADDITIONAL INDUCED 94
TOTAL 568
III. CUMULATIVE PROJECT DEMOGRAPHICS
EXISTING HOUSING UNITS PLUS PROJECT - CITY OF SAN MARCOS 32,972 PERCENTAGE INCREASE 0.00%
EXISTING EMPLOYEES PLUS PROJECT - CITY OF SAN MARCOS 41,868 PERCENTAGE INCREASE 1.38%

JOBS-HOUSING BALANCE
IV. JOBS-HOUSING BALANCE

CITY OF SAN MARCOS
EXISTING 1.25
EXISTING WITH PROJECT 1.27
PERCENTAGE INCREASE 1.38%
NOTES:
1 Source: State of California, Department of Finance, E-5 Population and Housing Estimates for Cities, Counties, and the State (2024). * All figures subject to rounding
2 Source: California Employment Development Department ("EDD") - Labor Market Information Division. 3 Please see Exhibit B-1: Recurring Jobs.

Page 6 of 7 ends

EXHIBIT 6A

PACIFIC SPECIFIC PLAN

SUMMARY - APPROVED PLAN

ASSUMPTIONS
I. RESIDENTIAL LAND USE ASSUMPTIONS UNITS
0 0
II. NON-RESIDENTIAL LAND USE ASSUMPTIONS EMPLOYEES/1,000 SQ. FT. SQ. FT.

INDUSTRIAL FLEX R&D 0.81 480,000
0 0.00 220,000

ECONOMIC IMPACTS CONCLUSIONS

RECURRING IMPACTS
III. JOB CREATION DIRECT INDIRECT/INDUCED TOTAL
CITYWIDE 390 178 568
IV. TOTAL OUTPUT DIRECT INDIRECT/INDUCED TOTAL
CITYWIDE $60,791,486 $26,499,988 $87,291,474

ONE-TIME IMPACTS
V. CONSTRUCTION JOBS DIRECT INDIRECT/INDUCED TOTAL
CITYWIDE 1,549 573 2,122
VI. CONSTRUCTION OUTPUT DIRECT INDIRECT/INDUCED TOTAL
CITYWIDE $221,952,000 $85,556,119 $307,508,119

OTHER IMPACTS
BALANCE BALANCE % INCREASE/
VII. JOBS-HOUSING BALANCE EXISTING WITH PROJECT (DECREASE) CITYWIDE 1.25258 1.26980 1.38%

Page 7 of 7 ends

CITY OF SAN MARCOS

PACIFIC SPECIFIC PLAN

ECONOMIC IMPACT ANALYSIS - (PROPOSED PLAN)

RECURRING JOBS

RECURRING IMPACTS

ONE-TIME JOBS

ONE TIME IMPACTS

JOB HOUSING BALANCE

SUMMARY

Page 1 of 7 ends

EXHIBIT 1b

PACIFIC SPECIFIC PLAN

RECURRING EMPLOYMENT - PROPOSED PLAN

ASSUMPTIONS
I. RESIDENTIAL LAND USE ASSUMPTIONS

LAND USE CATEGORY UNITS
ROWHOMES 116
VILLAS 112
II. NON-RESIDENTIAL LAND USE ASSUMPTIONS
LAND USE CATEGORY 1 EMPLOYEES/1,000 SQ. FT. 2 SQ. FT. 1 0 RECURRING EMPLOYMENT
III. CITY
DIRECT EMPLOYEES 3 INDIRECT EMPLOYEES 4 INDUCED EMPLOYEES 4 TOTAL EMPLOYEES ROWHOMES 0 0 0 0
VILLAS 0 0 0 0
TOTAL RECURRING EMPLOYMENT 0 0 0 0
NOTES:
* All figures subject to rounding
1 Source: City of San Marcos.
2 Commercial Buildings Energy Consumption Survey (CBECS), 2018. 3 Based on multiplying Category SF by Employees/1,000 SF metric. 4 Source: San Marcos City IMPLAN multipliers.

Page 2 of 7 ends

EXHIBIT 2b

PACIFIC SPECIFIC PLAN

RECURRING ECONOMIC IMPACTS - PROPOSED PLAN

ASSUMPTIONS
% INCOME SPENT TOTAL RESIDENT
I. RESIDENTIAL SPENDING ASSUMPTIONS HOUSEHOLD INCOME IN CITY SPENDING / YR.

ROWHOMES $184,473 24.68% $2,640,723
VILLAS $184,473 24.68% $2,549,663
II. NON-RESIDENTIAL OUTPUT ASSUMPTIONS AVERAGE OUTPUT / EMPLOYEE 1 OUTPUT / YR. 1

RECURRING OUTPUT
III. CITY
DIRECT OUTPUT INDIRECT OUTPUT 1 INDUCED OUTPUT 1 TOTAL OUTPUT ROWHOMES $2,640,723 $575,046 $94,614 $3,310,383
VILLAS $2,549,663 $555,217 $91,352 $3,196,232
TOTAL RECURRING OUTPUT $5,190,386 $1,130,263 $185,966 $6,506,614 NOTES:
* All figures subject to rounding
1 Source: San Marcos City IMPLAN multipliers.

Page 3 of 7 ends

EXHIBIT 3b

PACIFIC SPECIFIC PLAN

ONE-TIME EMPLOYMENT - PROPOSED PLAN

ASSUMPTIONS
I. RESIDENTIAL LAND ASSUMPTIONS UNITS
ROWHOMES 116
VILLAS 112
II. NON-RESIDENTIAL LAND USE ASSUMPTIONS SQ. FT.

III. PUBLIC FACILITIES TOTAL COST

PROJECT INFRASTRUCTURE NA

ONE-TIME EMPLOYMENT
IV. CITY
DIRECT EMPLOYEES 1 INDIRECT EMPLOYEES 1 INDUCED EMPLOYEES 1

TOTAL EMPLOYEES
ROWHOMES 169 63 47 280
VILLAS 163 61 46 270
TOTAL ONE-TIME EMPLOYEES 332 124 93 550
NOTES:
* All figures subject to rounding
1 Source: San Marcos City IMPLAN multipliers (IMPLAN Sector 58: Construction of new non-residential structures).

Page 4 of 7 ends

EXHIBIT 4b

PACIFIC SPECIFIC PLAN

ONE-TIME IMPACTS - PROPOSED PLAN

ASSUMPTIONS

ESTIMATED
I. RESIDENTIAL CONSTRUCTION COST ASSUMPTIONS UNITS SQ. FT. PER DWELLING UNIT COST PER UNIT Square Feet ROWHOMES 116 $260,000 185,756
VILLAS 112 $260,000 158,480
II. NON-RESIDENTIAL CONSTRUCTION COST ASSUMPTIONS IMPROVEMENT VALUE 1 CONSTRUCTION COST PER SQ. FT.

III. PUBLIC FACILITIES TOTAL COST

PROJECT INFRASTRUCTURE NA

ONE-TIME OUTPUT
IV. CITY
DIRECT OUTPUT INDIRECT OUTPUT 2 INDUCED OUTPUT 2 TOTAL OUTPUT ROWHOMES $30,160,000 $8,117,146 $6,374,197 $44,651,343
VILLAS $29,120,000 $7,837,244 $6,154,397 $43,111,642
TOTAL ONE-TIME OUTPUT $59,280,000 $15,954,390 $12,528,594 $87,762,985 NOTES:
1 Assumes that improvement value is approximately 85% of total valuation. 2 Source: San Marcos City IMPLAN multipliers (IMPLAN Sector 58: Construction of new non-residential structures). * All figures subject to rounding

Page 5 of 7 ends

EXHIBIT 5b

PACIFIC SPECIFIC PLAN

JOBS-HOUSING BALANCE - PROPOSED PLAN

ASSUMPTIONS
I. EXISTING DEMOGRAPHICS

CITY OF SAN MARCOS
HOUSING UNITS 1 32,972
EMPLOYEES 2 41,300
II. JOB IMPACTS 3

CITY OF SAN MARCOS
DIRECT IMPACT 0
ADDITIONAL INDIRECT 0
ADDITIONAL INDUCED 0
TOTAL 0
III. CUMULATIVE PROJECT DEMOGRAPHICS
EXISTING HOUSING UNITS PLUS PROJECT - CITY OF SAN MARCOS 33,200 PERCENTAGE INCREASE 0.69%
EXISTING EMPLOYEES PLUS PROJECT - CITY OF SAN MARCOS 41,300 PERCENTAGE INCREASE 0.00%

JOBS-HOUSING BALANCE
IV. JOBS-HOUSING BALANCE

CITY OF SAN MARCOS
EXISTING 1.25
EXISTING WITH PROJECT 1.24
PERCENTAGE INCREASE -0.69%
NOTES:
1 Source: State of California, Department of Finance, E-5 Population and Housing Estimates for Cities, Counties, and the State (2024). * All figures subject to rounding
2 Source: California Employment Development Department ("EDD") - Labor Market Information Division. 3 Please see Exhibit B-1: Recurring Jobs.

Page 6 of 7 ends

EXHIBIT 6B

PACIFIC SPECIFIC PLAN

SUMMARY - PROPOSED PLAN

ASSUMPTIONS
I. RESIDENTIAL LAND USE ASSUMPTIONS UNITS
ROWHOMES 116
VILLAS 112
II. NON-RESIDENTIAL LAND USE ASSUMPTIONS EMPLOYEES/1,000 SQ. FT. SQ. FT.

ECONOMIC IMPACTS CONCLUSIONS

RECURRING IMPACTS
III. JOB CREATION DIRECT INDIRECT/INDUCED TOTAL
CITYWIDE 0 0 0
IV. TOTAL OUTPUT DIRECT INDIRECT/INDUCED TOTAL
CITYWIDE $5,190,386 $1,316,229 $6,506,614

ONE-TIME IMPACTS
V. CONSTRUCTION JOBS DIRECT INDIRECT/INDUCED TOTAL
CITYWIDE 332 217 550
VI. CONSTRUCTION OUTPUT DIRECT INDIRECT/INDUCED TOTAL
CITYWIDE $59,280,000 $28,482,985 $87,762,985

OTHER IMPACTS
BALANCE BALANCE % INCREASE/
VII. JOBS-HOUSING BALANCE EXISTING WITH PROJECT (DECREASE) CITYWIDE 1.253 1.244 -0.69%

Page 7 of 7 ends

Pacific Specific Plan SP22-0001 Update
San Marcos, California
DTA and City of San Marcos
January 2023
Key Findings 4
Site Plan Analysis 9
Recommended Industrial Flex/R&D Market Positioning 16
San Diego R&D Market Overview 20
San Diego Industrial & Office Market Overview 25
Residential Mixed Use Market Positioning 30
Competitive For-Sale Market Positioning 37
Competitive Market Rate Apartment Positioning 45
Location Analysis 53
Land Use & Zoning Analysis 62
Demographic Overview 71
Economic Overview 79
Appendix 86
3 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos Background/Objectives, Key Contacts & Limiting Conditions

BACKGROUND & OBJECTIVES
Zonda Advisory has been retained by DTA in conjunction with the City of San Marcos to update a comparative analysis from an economic, and market perspective for the approval of a Specific Plan, Multi-Family Site Development Plan, and Tentative Subdivision Map for 449 residential units, including a mix of apartments, rowhomes, villas, and affordable flats on approximately 14.58 acres of the 33-acre project site (APN: 219-222-01-00, 219-222-02-00, 219-222-03-00, and 219-222-04-00. The project includes a General Plan Amendment and Rezone from Industrial (I) to Specific Plan Area (SPA). The project (SP22-0001) is located at the northwest corner of Linda Vista Dr. and S. Las Posas Rd. This analysis will include an updated valuation of existing and proposed building types, to evaluate current and foreseeable market demand for such uses. These findings will be used to identify how the proposed amendment will contribute to an increased tax base, economic development, and employment opportunities. Zonda will provide conclusions based on December 2022 data for the R&D component of this study. The proposed residential land use values remain in place from the previous analysis as of August 2022.

Note: This report was completed following the global COVID-19 pandemic, during an aggressive Fed tightening schedule. The recommendations contained herein reflect the most recent data available, but are subject to change as the market evolves.

Client is responsible for representations about the development plans, marketing expectations and for disclosure of any significant information that might affect the ultimate realization of the projected results. There will usually be differences between projected and actual results because events and circumstances frequently do not occur as expected, and the difference may be material. We have no responsibility to update our report for events and circumstances occurring after the date of our report. Payment of any and all of our fees and expenses is not in any way contingent upon any factor other than our providing services related to this report.

LIMITING CONDITIONS
The following key team members participated on this analysis:

Tim Sullivan, Senior Managing Principal, oversees our Advisory practice. With over 38 years of experience, Mr. Sullivan is an expert in residential and mixed-use feasibility studies, strategic planning and product development, and regularly conducts market analyses around the United States and internationally.

Alexis Wilmot, Manager - Advisory, managed the engagement on a day-to-day basis. Ms. Wilmot has 18 years of experience evaluating for-sale , apartment and retail land uses in the real estate industry. She regularly analyzes residential and mixed-use developments around the country, with a specific focus on the Southern California market, and North Inland County in particular.

Additional support was provided as needed.

KEY CONTACTS
Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 4 Key Findings
Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 5 Opportunity Summary
Key Findings
As part of our due diligence for the Subject, we compared the existing land use (Industrial, referred to hereafter as the “Original”) and “Proposed” rezone land use (SPA) using a S.W.O.T analysis. The main advantage of the rezone over the Original Use is that the site can provide new rental and for-sale townhome product to San Marcos, which currently does not have new rental Multifamily product and limited Multifamily for-sale communities. The rental component will provide an opportunity, especially as the San Diego market has seen double digit growth for rentals and higher demand. The townhomes will provide a more affordable option compared to new single-family for sale communities, and the affordable housing component will provide much-needed inventory to low-income households.

General Plan Amendment Linda Vista Dr & S. Las Posas Rd Plan Element SWOT Proposed
Internal factors
Strengths
Industrial Zoning designation Industrial zoning is consistent with land uses immediately adjacent to the Subject The Industrial market has grown extremely well since, particulalry in R&D Life Science space Industrial market was the least impacted Commercial sector during the pandemic Proposed SPA Zoning designation Proximity to Grand Plaza for nearby retail, services, and food Limited new apartment supply and for-sale townhome supply in San Marcos create an opportunity for the Subject Comparable apartments have occupancies above 95%
Weaknesses
Industrial Zoning designation Although Flex/R&D space is sought after in neighboring Carlsbad, no Life Sciences precedent in San Marcos Competition with industrial zones around the Subject site Proposed SPA Zoning designation Could negatively impact traffic during peak hours with one main road leading to residential neighborhood along S. Las Posas Rd
High density product with higher bedroom count may result in tight floor plans, especially for four-bedroom townhomes
External Factors
Opportunities
Industrial Zoning designation Industrial zone can expand with what is already west of the Subject North County viewed as an emerging market for R&D Life Science space as other cores become too expensive.

Proposed SPA Zoning designation No immediate competition; most apartment buildings in the area are older Higher interest rates will drive buyers to look for affordability. Townhomes provide a better price compared to new single-family home communities
Threats
Industrial Zoning designation Industrial R&D Life Science lease- rates and sales prices are untested in San Marcos which is located on the San Marcos, while adjacent to the hot Carlsbad Life Science market, has yet to atract R&D developer investment.

Proposed SPA Zoning designation Housing market uncertainity in the coming years, with current cooling prompted by interest rate hikes.

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 6 Original vs Proposed Zoning & Land Use Comparison
Key Findings
The Subject is a 33-acre property at the northwest corner Linda Vista Drive and S. Las Posas Road, previously slated for Industrial use (the “Original” project), and now planned for 101 three-story for-sale rowhomes, 108 three-story for-sale villas, 172 apartment units on a five- story podium, 68 affordable flats within a four-story building, and parking (the “Proposed” project). The project includes a General Plan Amendment (GPA) and Rezone (R) to modify the General Plan and Zoning designation of the property (APNs 219-222-01, 219-222-02, 219- 222-03, and 219-222-04) a Specific Plan Area (SPA). The Original Use plans for two industrial buildings totaling 190,531 building square footage, 382 parking spaces, and 24 loading spaces.

The change is being requested to allow for the construction of a 449 residential units, including a mix of apartments, rowhomes, villas, and affordable flats on approximately 14.58 acres of the site. The main advantages of the Proposed Use rezone and land use designation are:
• The planned Residential Mixed-Use development will bring new apartment and attainably priced for-sale product to an area that is undersupplied, with very low vacancy.
• All comparable apartments, except Marisol Carlsbad, have occupancy rates above 95%, with Block C, Marc San Marcos, and Anden Townhomes having the highest occupancy at over 97%. This bodes well for new apartments entering the market. • In spite of almost full occupancy, apartment rents have increased 14% in the Vista-San Marcos Submarket and 16% in San Diego County, with extremely limited supply putting upward pressure on rents.
• New townhome communities within a three-mile radius of the Subject average +5.5 sales per month. This bodes well for the rowhomes and villas, with an estimated absorption of 6.0 homes per month.
• Townhomes provide a more affordable solution to single-family homes, especially in the face of rising interest rates.
• The Original Use calls for Industrial zoning (see map), consistent with adjacent uses which include Industrial warehouses and manufacturing, Light-Industrial to the south of the Subject, and Commercial east of the Subject (Grand Plaza shopping mall).

Industrial zones were the least impacted during the pandemic due to people shopping online raising the demand for warehouse space, and the growing demand for R&D space in San Diego County’s emerging North County market. However, Industrial space in the Subject area achieves lower lease rates than multifamily development, making the Proposed Use a more viable development alternative.

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 7 Industrial R&D Campus 60,000 15.09 60,000 $5.00 $60.00 $3,600,000 -29% ($1,044,000) $2,556,000 -11.3% ($406,800) $2,149,200 5.70% $37,705,263 $628 170,000 170,000 $5.00 $60.00 $10,200,000 -29% ($2,958,000) $7,242,000 -11.3% ($1,152,600) $6,089,400 5.70% $106,831,579 $628 166,667 166,667 $5.00 $60.00 $10,000,000 -29% ($2,900,000) $7,100,000 -11.3% ($1,130,000) $5,970,000 5.70% $104,736,842 $628 Industrial Total 396,667 15.09 396,667 $5.00 $60.00 $23,800,000 -29% ($6,902,000) $16,898,000 -11.3% ($2,689,400) $14,208,600 5.70% $249,273,684 $628 Industrial Flex/R&D 480,000 15.09 480,000 $3.80 $45.60 $21,888,000 -29% ($6,347,520) $15,540,480 -4.0% ($875,520) $14,664,960 5.70% $257,280,000 $536 Industrial Total 480,000 15.09 480,000 $3.80 $45.60 $21,888,000 -29% ($6,347,520) $15,540,480 -4.0% ($875,520) $14,664,960 5.70% $257,280,000 $536 Industrial R&D Campus 60,000 1 60,000 $600 $36,000,000 $36,000,000 170,000 1 170,000 $600 $102,000,000 $102,000,000
166,667 1 166,667 $600 $100,000,000 $100,000,000
Industrial Total 396,667 3 396,667 $600 238,000,000 $238,000,000 Industrial Flex/R&D 480,000 3 480,000 $544 $87,040,000 $261,120,000 Industrial Total 480,000 3 480,000 $544 87,040,000 $261,120,000 Zonda provided data on two possible development scenarios for the Original Use plan.

1. Flex/R&D space featuring an unrelated collection of tenants with minimal build out specification. Zonda estimates a lease rate of $3.80 for this space, and a sale price of $544 per square foot, which is at the upper end of Flex R&D space in San Marcos, and equal to the average across Life Science space of all ages.

2. Life Sciences R&D space with top-of-the-line build out fulfilling all requirements specific to Life Sciences tenants in campus form, where one tenant typically occupies the entire space. The markup for this space is significantly above that of run-of-the-mill Flex R&D. Zonda estimates a lease rate of 5.00 per square foot based on current lease rates in the County for this type of space, and a sale price of $600 per square foot, which represents a discount for the San Marcos versus Carlsbad location.

Our valuation of the Subject includes both the NOI cap rate approach and a comparison of recent sales transactions. Zonda assumptions are supported by extensive market research and interviews with local retail brokers including VOIT, REIS, JLL, CBRE, Lee & Associates, Cushman and Wakefield, and Colliers. The resulting price cross-referencing both methods is between $238.0 and $249.27 million.

Methodology and Price Assessment Conclusions – Original Use Key Findings
Type SF/Unit # Units GLA (SF) $/SF $/Unit Total
Sales Transaction Valuation Approach

1. 2.

Type
Building
Square
Feet
Net
Acreage GLA (SF)
Est.

1. 2.
• The Industrial cap rate is estimated at roughly

5.7% based on today’s market.
• The Vacancy rate for Flex R/D is 4.0%, and the
vacancy for Life Sciences R&D in this emerging
market is currently 11.3%.
• Operating expenses for the Industrial is
estimated at 29% of gross receipts, based on
feedback from local brokers, and recent landlord
financial statements in this space.

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 8 As part of our due diligence, Zonda researched the lease rates, cap rates, net operating income and sales prices for the Proposed development scenario. The Proposed mixed-use residential for-sale and apartments homes result in a combined total estimated revenue of between $254.6 and $255.4 million.

Proposed Use
Key Findings
Zonda made the following assumptions in our estimate of revenues:

Vacancy rate of 6% for the apartments, with full occupancy for the for-sale homes and affordable units. Industrial vacancy estimated at 2%.

Cap rate of 4.8% for the apartments to adjust for specific location, 5% for the for-sale product, and 6.9% for the low-income apartments which typically carry a higher risk.

Operating expenses for the residential uses are estimated at 32% of gross receipts, based on feedback from local brokers and in-house expertise from Zonda’s Multifamily Apartment Division based in in Dallas.

Type
Building
Square
Feet
Net
Acreage GLA (SF)
Est.

Type SF/Unit # Units GLA (SF) $/SF $/Unit Total
Multifamily Apartments (172) 1,043 172 179,408 $500 $521,535 $89,704,000 For-Sale Rowhomes (101) 1,558 101 157,358 $484 $754,072 $76,161,272 For-Sale Villas (108) 1,444 108 155,952 $486 $701,784 $75,792,672 Affordable Flats 681 68 46,308 $297 $202,257 $13,753,476 646.1086637 Residential Total 4,726 449 539,026 $461 $568,845 $255,411,420 Net Operating Income / Cap Rate Valuation Approach
Sales Transaction Valuation Approach
Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 9 Site Plan Analysis
Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 10 Aerial of Surrounding Uses
Site Plan Analysis
Surrounding uses include the Grand Plaza shopping mall in the eastern portion adjacent to the Subject, Industrial facilities north, west, and south of the Subject, and a park in the southwestern corner of the Subject. The Subject is currently a vacant lot on the northwest corner of Linda Vista Drive and S. Las Posas Road.

Grand Plaza
Industrial site
Industrial site
Industrial site
Bradley Park
Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 11 Possible Layout of Original Land Use
Site Plan Analysis
The Original Use for the 33-acre site includes industrial buildings on 14.58 acres. The original use planned for three industrial buildings with a combined square footage of 480,000 square feet set aside for Research and Development, and a 220,000 square foot four-story parking garage with 1,440 parking spaces. The Floor Area Ratio (FAR) is 0.48. The net developable acreage is consistent with other prized R&D campuses recently transacted in San Diego, and the Subject would best be developed as a similar cohesive R&D Life Sciences campus.

The design at right would have to be
modified to maximize viability of the
proposed R&D land use, as R&D buildings of
this magnitude typically require GMP
adjacent space to be successful. Zonda
assumed that the 60,000 and 170,000
square foot buildings would comprise the
R&D component of the site plan, and that
the 250,000 square foot building would
have to be 2-story rather than 3-story in
order to meet GMP requirements. However,
the parking structure could be reduced to
roughly 182,000 square feet, as GMP space
is based on 1 space per 500 square feet (see
page 61 for a more detailed analysis).

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 12 Proposed Site Plan
Site Plan Analysis
The Proposed plan for the 33-acre site includes the construction of a 101 for-sale rowhomes, 108 for-sale villas, 172 rental apartments, and 68 affordable units. Rowhomes and villas will be three-story, two- to four-bedroom floorplans with 418 garages and 70 open parking spaces. Apartment units will be one- to three-bedroom floorplans within a five-story podium building. Affordable flats will consist of studios to two-bedroom plans within a four-story building.

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 13 Proposed Site Plan – For-Sale Rowhomes & Villas
Site Plan Analysis
The Proposed plan for the rowhomes and villas includes 101 rowhomes on 4.39 acres and 108 villas on 4.10 acres. Rowhomes will range from 1,200 SF to 1,890 SF, and villas will range from 1,272 SF to 1,832 SF in size. Base prices will range from $649,000 to $790,000 for rowhomes and $639,000 to $755,000 for villas with an anticipated HOA of $320 per month and a projected 1.20% property tax rate.

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 14 Proposed Site Plan – Apartments
Site Plan Analysis
The Proposed plan for apartments includes 172 units within a five-story podium building in 4.31 acres. These will range from 740 SF to 1,579 SF with garages. Base rents will range from $2,775 to $4,295 and one month off the rent while in lease up.

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 15 Proposed Site Plan – Affordable
Site Plan Analysis
The Proposed plan for the affordable units include 68 units on 1.78 acres. These will be in a flats in a four-story building and will range from 512 square feet to 924 square feet in size. Based on the San Diego affordable housing guidelines, rents will range from $1,366 to $1,756 for 60% AMI (see table on page 29 for affordability guidelines).

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 16 Recommended Industrial
Flex/R&D Market Positioning
Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 17 The Original plan R&D use will achieve
higher rents than the general Light
Industrial/Warehouse listings and sales
shown below, but based on the absence of
R&D comparables in San Marcos today, we
can use this data to establish a base price
for the Subject Industrial component.

Older smaller Light Industrial space in
North County fetches between $270 and
$365 per square foot, and implies that our
recommended pricing for the Subject
Original scenario should be higher than
this to adjust for new construction and
Flex/R&D use. Average sales price is just
under $300 per square foot. The highest
priced listing of $544 per square foot is
for space at 292 E Barham Drive, which
Zonda used as the proposed pricing for
the Flex R&D (1.) original scenario
outlined on page 7.

Original Use: Light Industrial/Industrial Warehouse Sales Industrial Flex/R&D Market Positioning
Property Name
No. Address Acreage Year Built Type Square Feet Sale Price Price/ SF Cap Rate Sale Date 1 753 W Washington Ave 0.92 1972 Light Industrial 25,512 $6,863,266 $269 - Lisitng Escondido, 92025 25,512
2 Don Lee Industrial Park
1991 Don Lee Pl 3.00 1980 Light Industrial 25,788 $6,500,000 $252 - Listing Escondido, 92029 25,788
3 475 E Carmel St 1.00 1985 Industrial Flex 8,744 $2,360,880 $270 - Listing San Marcos, 92078 8,744
4 185 Bosstick Blvd 0.89 1990 Light Industrial 13,962 $3,635,000 $260 - 11/16/2021 San Marcos, 92069 Warehouse Office 13,962
5 1545-1565 La Mirada 3.29 1976 Industrial Warehouse 61,264 $14,130,000 $231 - Listing San Marcos, 92078 61,264
6 753 W Washington Ave - - 25,514 $6,863,266 $269 - Listing Escondido, 92025 25,514
7 1650 Linda Vista Dr 1.69 1972 Industrial Warehouse 23,481 $5,150,000 $219 - 12/28/2021 San Marcos, 92078 Light Industrial 23,481
8 521 State Pl 0.11 1982 2,368 $745,920 $315 - Listing
Escondido, 92029 2,368
9 1545, 1555, 1565 La Mirada Dr 3.29 1975 Industrial Manufacturing 62,112 $15,000,000 $241 - Listing San Marcos, 92078 62,112
10 120 Mata Way 1.989990817 1987 Industrial Warehouse 47,895 $17,000,000 $355 - 3/23/2022 San Marcos, 92069 Warehouse Office 47,895
11 292 E Barham Drive 0.729981635 1990 Flex R&D 12,867 $7,000,000 $544 - 8/18/2021 San Marcos, 92078 Light Industrial 12,867
12 1801 Diamond St 0.580004591 1990 Industrial Warehouse 10,100 $2,620,000 $259 - 12/12/2021 San Marcos, 92078 Warehouse Office 10,100
13 505 S Pacific St 9.8 1991/2020 Industrial 113,500 $42,200,000 $372 6.35% 6/23/2021 San Marcos, 92078 Cold Storage 113,500
14 1880 Diamond St 1.780004591 1999 Industrial Warehouse 31,246 $9,000,000 $288 - 3/23/2022 San Marcos, 92078 Warehouse Office 31,246
15 160 Industrial St 0.864118457 1986 Flex R&D 16,000 $5,400,000 $338 - 12/9/2021 San Marcos, 92078 Light Industrial 16,000
Min 2,368 $745,920 $219 6.35%
Max 113,500 $42,200,000 $544 6.35%
Median 25,512 $6,863,266 $269 6.35%
Average 27,638 $9,137,083 $299 6.35%
Industrial
Warehouse/Distribution
Industrial Warehouse
Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 18 The Industrial leases below are active listings and recently negotiated leases for, with the purple line item showing the single R&D Life Sciences lease at a much higher price. 2820 Loker Avenue is a 10-year lease at a total value of $11.5 million in more durable up-and-coming Carlsbad. Zonda assumes that pricing for similar R&D space in San Marcos would land somewhere between this high benchmark and the other listings below, and therefore used the blended average rent of $3.80 per square foot for the Flex/R&D Original (1.) scenario.

Original Use: Industrial Leases
Industrial Flex/R&D Market Positioning
Building Name Total Building Occupancy Asking Lease Rate Asking Lease Rate No. Address Tenant Class Built Leasable SF Rate (%) (Per SF Per Year) (Per SF Per Mo) Terms 1 Elevate at Carlsbad Oaks North Listing - 2017 114,976 114,976 $17.16 $1.43 2870 Whiptail Loop, Calrsbad 92010 Total 114,976 - $17.16 $1.43

2 2820 Loker Ave East, Absorption Systems Lease - 2017 63,900 63,900 $179.97 $15.00 10-Yr Lease Carlsbad, 92010 Total 63,900 - $179.97 $15.00 $11.5M
3 5205 Avenida Encinas Lisitng - 1982 127,128 7,177 $22.20 $1.85 Carlsbad Ranch, 92010 Total 7,177 - $22.20 $1.85
4 2820-2834 La Mirada Dr Listing - 1981 81,167 81,167 $18.60 $1.55 Vista, 92081 Total 81,167 - $18.60 $1.55
5 Melrose Business Center Listing - 1989 98,362 98,362 $18.60 $1.55 1330 N Melrose Dr, Vista Total 98,362 - $18.60 $1.55
6 135 Vallecitos de Oro Listing - 1981 17,524 5,600 $17.40 $1.45 San Marcos, 92069 Total 5,600 - $17.40 $1.45
7 1219-1295 Linda Vista Dr Listing 1980 28,896 1,728 $17.40 $1.45 San Marcos, 92078 Total 1,728 - $17.40 $1.45
8 Grey Hawk Business Center Listing 1981 208,439 208,439 $16.80 $1.40 3246 Grey Hawk Ct, San Marcos, 92078 Total 208,439 - $16.80 $1.40 Min 17,524 1,728 -- $16.80 $1.40
Max 127,128 208,439 -- $179.97 $15.00
Median -- 63,900 -- $18.60 $1.55
Average 87,831 61,864 -- $45.65 $3.80 `
Available Space
Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 19 The following neighborhood leases and sales were used to help determine a likely sale price for the Life Sciences R&D original (2.) scenario defined on page 7. Our pricing adjusts for the Subject location which is in an emerging market with untested lease rates. The closest comparable is Carlsbad which has received strong interest as a desirable location for R&D companies. Zonda priced the Subject at a $60 per square foot lease rate which is consistent with the average for R&D life science space of all ages in San Diego. The highest sales prices are for brand new space or space which has already been outfitted for Life Sciences, incurring a significant markup over aging product in the Carlsbad Research Center area. These buildings are currently being snapped up at less than half the price per square foot for the purposes of refurbishment. Zonda assumed a sales price of 140% of the $430 per square foot average shown in the table below, to reflect new construction, which translates to roughly $600 per square foot for Life Sciences R&D space.

Original Use: R&D Sales & Leases
Industrial Flex/R&D Market Positioning

LIFE SCIENCES SAN DIEGO LEASES
Investor/Owner Submarket Campus Address Yr Built SF Rent $/SF/Yr $/SF/Mo Occupancy Alexandria RE Equities Torrey Pines ARE Torrey Ridge 10578-10628 Science Center Dr 298,863 $15,597,000 $52.19 $4.35 100% Torrey Pines ARE Nautilus 3530-3550 John Hopkins Ct, 3535-3565 General Atomics Ct 213,900 $12,452,000 $58.21 $4.85 100% UTC ARE University District 4755-4767 Nexus Center Dr, 9625 Towne Center Dr 415,462 $18,066,000 $43.48 $3.62 98% UTC Bristol Myers Squibb Alexandria Point Mega Campus 426,927 $36,288,795 $85.00 $7.08 100% UTC Bristol Myers Squibb Various Sites 489,296 $30,012,205 $61.34 $5.11 Sorrento Mesa ARE Summers Ridge Science Park 9965-9995 Summers Ridge Rd 316,531 $11,077,000 $34.99 $2.92 100% Sorrento Mesa ARE Portola 6175-6275 Nancy Ridge Dr 101,857 $3,603,000 $35.37 $2.95 100% Sorrento Mesa 2810, 5820 Nancy Ridge Dr 83,354 $3,853,000 $46.22 $3.85 100% Sorrento Valley 3911-4045 Sorrento Valley Blvd 151,408 $4,625,000 $30.55 $2.55 100% Sorrento Valley 11025-11075 Roselle St 121,655 $3,290,000 $27.04 $2.25 95% SD Creekside Tyr Pharma 10240 Sorrento Valley Rd, Ste 300 23,696 $1,635,024 $69.00 $5.75 HCP Callan Rd Turning Point Therapeutics 3020-3030 Callan Road 180,000 $12,096,000 $67.20 $5.60 Techbilt Carlsbad Absorption Systems 2820 Loker Ave East 2017 63,900 $11,500,000 $179.97 $15.00 $60.81 $5.07 $4.10
LIFE SCIENCES SAN DIEGO SALES $56.84 $4.50
Investor/Owner Submarket Campus Address SF Sale Price Price/SF Acreage Occupancy Carlsbad Carlsbad Research Center 1939, 1945, 1949 Palomar Oaks Way 1981/2021 76,767 $19,400,000 $252.71 6.90 Luminous Capital Carlsbad Carlsbad Research Center 2290 Cosmos Way 1989 37,328 $9,500,000 $254.50 2.76 Luminous Capital Carlsbad Carlsbad Research Center 5931 Priestly Dr 1985/2014 52,777 $14,000,000 $265.27 2.83 Carlsbad Carlsbad Research Center 5900-5950 La Place Ct 81,965 $24,750,000 $301.96 7.90 Graymark/Jardian Capital Carlsbad Life Science Campus Flight, 2051 Palomar Airport Rd 1989 205,000 $68,000,000 $331.71 1.76 Tritower Financial Carlsbad Atlas Campus 5909 & 5919 Sea Otter Pl 2017 230,957 $88,750,000 $384.27 14.32 81% Clarion Partners Carlsbad Fusion Life Science HQ Alphatec Spine, Inc. 1950 Camino Vida Roble 1996/2019 121,541 $54,000,000 $444.29 7.42 Clarion Partners Carlsbad Bressi Ranch Lift, 6021-6023 Innovation Way 2019 53,205 $32,000,000 $601.45 4.43 Oxford Properties Carlsbad Ionis Pharmaceuticals HQ 2855 Gazelle Ct 2011-2021 249,800 $258,400,000 $1,034.43 18.40 $430.07
$331.71
Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 20 San Diego R&D Market
Overview
Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 21 San Diego’s R&D space is largely centered around Life Sciences including pharmaceuticals, biomedical science, engineered foods and organic clothing. San Diego is ranked third of the four largest national Life Sciences clusters, along with Boston-Cambridge, San Francisco, and the Raleigh/Durham Research Triangle (see table below).

San Diego County R&D Space Defined
R&D Market Overview
Source: Voit
San Diego is poised to experience incredible growth in this particular area of Light Industrial space, with over 11 million square feet of new space anticipated to deliver over the short term. Life Sciences Industrial space is divided into two categories, namely R&D space and GMP space. R&D space
typically involves 60% lab space and 40% office space. However, goods manufacturing practice (GMP) space is also required in close proximity to support the R&D.

Existing Office buildings adhering to the specifications listed below is being converted to R&D space in San Diego to address the supply shortage.

To qualify as R&D space, Zonda assumes that the Subject would provide:
• Slightly more than the 15-foot height per floor shown on the Original Use plan (page 14), based on the industry standard requirement of at least 15 feet per floorplate.
• R&D specification HVAC and waste disposal.
• A floor load of 125-150 pounds/square foot.
• A separate loading zone.

Existing Industrial buildings can be converted to GMP space provided they meet the following requirements:
• At least 22-25 clear height with grade level doors.

Zonda therefore assumed that one of the buildings on the site plan on page 14 would be 2-story rather than 3-story.

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 22 Demand: Industrial Flex R&D space demand by investors and end users alike experienced strong growth in San Diego since Q4 2020 when the space began to attract larger fund investors such as San Diego-based IQHQ. Phase 3 RE Partners is another large San Diego R&D owner leasing spaces to tenants such as Eurofins, Cibus, Debut Bio, LocanoBio and SmartLabs are expanding, creating demand for 2.9 million square feet.

Lease Rates: Rates range from $63 to $83 per foot per year, or $5.25 to $6.90 per square foot per month for top curated space. Lease rates continue to increase in the core markets shown below, spurring growth in emerging markets such as Del Mar Heights and Carlsbad.

Vacancy: The vacancy rate averages 3.4% across all Submarkets, and is highest in emerging markets which include North County, where the manufacturing GMP spaces are in demand, and support the lab spaces in Sorrento/TorreyPines/UTC.

San Diego County R&D Summary
R&D Market Overview
Source: Green Street, CBRE, Cushman & Wakefield

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 23 Life sciences acquisitions, conversions and redevelopment continue to try to meet the high demand in San Diego. Diminishing supply in the core life sciences Submarkets of Sorrento Valley/Mesa, Torrey Pines and UTC is causing investors to show increased interest in North County for potential lab and cGMP conversion. The recent Atlas R&D Campus transaction exemplifies this trend, positively impacting the feasibility of the Industrial Original Use Land Plan at the Subject.

Tritower Financial Group acquired Atlas, a 230-957-sqyare foot R&D campus in Carlsbad, which underwent a major renovation in 2017. The property, which occupies 14+ hilltop acres with views, sold for $88.75 million or $384 per square foot in June 2022. The Subject would be lower priced based on location in more affordable San Marcos, without views, but would this be somewhat offset by the Pacific Specific Plan new construction offering.

San Diego County R&D Case Study
R&D Market Overview
Source: JLL, RES, ORG Research

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 24 Market Size: San Diego has a current R&D Life Sciences market size of 23.9 million square feet with 5.4 million square feet under construction and just under 1.0 million square feet of current tenant demand.

Demand & Supply: The life science sector’s rapid expansion in recent years is expected to moderate in 2023 due to the economic slowdown.

Nevertheless, the market should remain relatively resilient. Pandemic-fueled demand and capital infusion will give way to more normal market conditions. The overall industry showed signs of slowing growth in the fourth quarter of 2022 as companies reduced job openings and cut staff.

Rates: Rental rates sit at record highs but appear to be leveling off, with average asking rents at $75.96 per square foot per year or $6.33 per square foot on a monthly basis.

Vacancy: The San Diego market currently has a 4.4% vacancy rate for R&D space.

San Diego County R&D Future Outlook
R&D Market Overview
Source: Green Street, CBRE, Cushman & Wakefield
Top Transaction:

Oxford Properties acquired the
Ionis Pharmaceuticals 250,000-
square-foot Life Sciences campus
in Carlsbad for $258.4 million,
which was the most expensive
deal in the top 10 markets for Q4
2022. The 18.4-acre deal
translates to over $1,030 per
leasable square foot. The
buildings range in age from a
build year of 2011 to 2021.

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 25 San Diego Industrial & Office
Market Overview
Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 26 Demand:

Net absorption in Q4 2022 was flat at 381,336 square feet compared to Q3, but grew almost double the 2021 volume.

Vacancy:

Total vacancy (including sublet space) in Q4 2022 increased to 12.1%, pushing concessions upwards. Landlords responded to heightened vacancy by converting office space into high-end R&D office space.

Lease Rates:

Asking lease rates remained relatively flat at $3.44 per square foot per month. Rents are 5.2% up year-over-year.

San Diego County Office Market Summary
Industrial & Office Market Overview
Source: Voit

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 27 Demand:

Until recently, sizeable office sublease spaces were being occupied by R&D/Life Sciences and Big Tech backfill. The recent slowdown in Life Sciences demand has halted acquisition of these existing buildings by lab developers. San Marcos represents roughly 12.3% of the North County Submarket, with flat absorption.

Vacancy:

San Marcos vacancy rates for Office space are currently 8.6%, but total vacancy which reflects sublease space as well is rather elevated at 11.3%.

Lease Rates:

Office space lease rates in San Marcos are currently at $2.37 per square foot per month.

North County & San Marcos Office Market Summary
Industrial & Office Market Overview
Source: Voit

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 28 Demand:

Net absorption finished out the year strongly at just over 1,477 million square feet.

Vacancy:

The vacancy rate in Q4 2022 attained a record low of 2.3%, putting upward pressure on rents.

Lease Rates:

Asking lease rates remained stable at $1.28 per square foot per month.

San Diego County Industrial Market Summary
Life Sciences & Office Market Overview
Source: JLL

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 29 Demand:

Several new Industrial projects broke ground in North County as a result of demand for new large block space, accounting for the positive net absorption in San Marcos. The North County Submarket accounts for 30% of the total San Diego market.

Vacancy:

San Marcos vacancy rates for Industrial space are strong at 3.0% which is lower than the North County Submarket vacancy rate of 4.1%.

Lease Rates:

Industrial space lease rates in San Marcos are higher than North County Submarket overall, at $1.32 per square foot per month across all sub- types.

North County & San Marcos Industrial Market Summary
Industrial & Office Market Overview
Source: Voit

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 30 Residential Mixed-Use Market
Positioning
Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 31 Our valuation of the Subject includes both the NOI cap rate approach and a comparison of recent sales transactions and focused specifically the Proposed Use. Sales truncations were researched both by price per square foot and price per unit where applicable, and the resulting average was used. Zonda assumptions are supported by extensive market research and interviews with local retail brokers including VOIT, REIS, HVS, CBRE, Lee & Associates, Cushman and Wakefield, and Colliers. The resulting price assessment cross-referencing both methods is roughly $254.66 to $255.41 million. A detailed explanation of these revenues is provided on the following pages.

Proposed Residential Scenario Pricing Recommendations
Residential Mixed-Use Analysis
Zonda assumptions are supported by our market research
and interviews with local retail brokers including CBRE, Lee & Associates, Cushman and Wakefield, and Colliers, and
include the following:
• A vacancy rate of 5% for the market rate multifamily
apartments, with full occupancy anticipated for the
low income apartments and for-sale townhomes.
• Operating expenses for multifamily apartments and
townhomes are estimated at 32%.
• Market Cap Rates for Multifamily are currently between 4% and 5.5%, and our 4.75% rate adjusts for the
particular Subject location and opportunity. Note that
the low income apartment market has a higher cap rate
of between 6.0 and 7.0% (reflected here at 6.5%).
• Operating expenses typically run between 30% and
35% of gross receipts, and are shown at 32%.
*Assumes all real estate property taxes, insurance, management fees (on or off-site), repairs and maintenance, and utilities are paid by tenant under a Triple Net lease.

Monthly
Lease Rate
Est. Annual
Lease Rate
Per SF (Net)
Gross Receipts Operating
Expense %
Operating
Expenses Net Operating
Income
Vacancy
Rate Vacancy Total Est. Annual
Revenues
Cap Rate
(%) Total Value $/SF
Multifamily Apartments (172) 1,043 4.31 179,408 $3.19 $38.28 $6,867,738 -32% ($2,197,676) $4,670,062 -6.0% ($412,064) $4,257,998 4.75% $89,642,057 $500 For-Sale Rowhomes (101) 1,558 4.39 157,358 $2.95 $35.40 $5,569,797 -32% ($1,782,335) $3,787,462 0.0% $0 $3,787,462 5.00% $75,749,235 $481 For-Sale Villas (108) 1,444 4.10 155,952 $2.95 $35.43 $5,525,417 -32% ($1,768,133) $3,757,284 0.0% $0 $3,757,284 5.00% $75,145,671 $482 Affordable Flats (68) 681 1.78 46,300 $2.43 $29.16 $1,350,108 -32% ($432,035) $918,073 0.0% $0 $918,073 6.50% $14,124,207 $305 Residential Total 4,726 14.58 539,018 $2.99 $35.83 $19,313,060 -32% ($6,180,179) $13,132,881 -1.5% ($412,064) $12,720,816 5.31% $254,661,170 $472 Net Operating Income / Cap Rate Valuation Approach
Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 32 Proposed Townhomes & Villas: For-Sale Product Market Rate Pricing Summary Residential Mixed-Use Analysis
Zonda’s recommended total prices average $753,650 ($484 per square foot) for the proposed 101 rowhomes and $701,622 ($486 per square foot) for the proposed 108 villas, with an expected total revenue of over $73M for each product line based on these prices. Our August 2022 average base pricing is $727,050 for rowhomes and $677,222 for villas, and all-in pricing factors in incentives of $3,000 towards closing costs, options and upgrades spending of $18,000 to $20,000 per home, and unit premiums of $3,400 to $3,600 per unit. ▬ Incentives ▬ ▬ Typical Spending ▬ Estimated Existing
# of Est % of Average Base Price Options/ Options / Lot Closing Closing Est.

Ref Project/Subdivision Type Configuration Units Total Units Unit Size Price Reduction Upgrades Upgrades Premiums Price $/SF Sales Rate A Row homes Tow nhomes Attached 3-Story 101 48% 1,558 $727,050 -$3,000 $0 $20,000 $3,600 $753,650 $484 3.00 B Villas Tow nhomes Attached Villas Btb 108 52% 1,444 $677,222 -$3,000 $0 $18,000 $3,400 $701,622 $486 3.00 Community Summary 209 100% 1,499 $701,301 -$3,000 $0 $18,967 $3,497 $726,765 $485 6.00 $600,000
$650,000
$700,000
$750,000
$800,000
$850,000
1,000 1,100 1,200 1,300 1,400 1,500 1,600 1,700 1,800 1,900 2,000 Estimated Closing Price
Unit Size
Rowhomes (Townhomes) - Attached 3-Story, 3.0 sls per mo Villas (Townhomes) - Attached Villas Btb, 3.0 sls per mo Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 33 Proposed: For-Sale Townhomes & Villas Market Rate Pricing Detail Residential Mixed-Use Analysis
Zonda’s recommended base prices for the rowhomes range from $649,000 to $790,000 and base prices for villas range from $639,000 to $755,000. Monthly HOA and base property tax rate were estimated at $320 per month, and 1.20%, setting combined monthly payments between $3,997 and $4,846 with a 5.5% mortgage interest rate and a 20% down payment. Qualifying income is between $160,000 and $195,000. These proposed base prices are consistent and competitive with the actively selling local attached new home market.

Zonda used these values in our assessment of potential price as the proposed land use scenario. Our positioning rational versus the competitive for-sale residential market is explained in the following section.

Mo. ▬ Incentives ▬ ▬ Typical Spending ▬ Estimated Est. ▬ Pymt Impacting ▬ 80.0% 30.0% Subject Property Size Sales Base Price Options/ Options / Lot Closing Closing Mo. Base Addl 5.5% Qualifying Product Details Mix (SF) Bd/Ba Level Pkg Pace Price Reduction Upgrades Upgrades Premiums Price $/SF HOA Tax Taxes Mo.Pmt. Income A ROWHOMES │ TBD │ SAN MARCOS
Product: Tow nhomes 23 1,200 2/2.0 3 2 3.0 $649,000 -$3,000 $0 $20,000 $3,600 $675,600 $563 $320 1.2% 0.0% $4,064 $162,575 Configuration: Attached 3-Story 23 1,310 3/3.0 3 2 $685,000 -$3,000 $0 $20,000 $3,600 $711,600 $543 $320 1.2% 0.0% $4,264 $170,556 Lot Dimension: 3- to 6-Plex 28 1,736 3/3.5 3 2 $765,000 -$3,000 $0 $20,000 $3,600 $791,600 $456 $320 1.2% 0.0% $4,707 $188,292 Total Units: 101 27 1,890 4/3.5 3 2 $790,000 -$3,000 $0 $20,000 $3,600 $816,600 $432 $320 1.2% 0.0% $4,846 $193,834 101 1,558 3.0 $727,050 -$3,000 $0 $20,000 $3,600 $753,650 $484 $320 1.2% 0.0% $4,497 $179,878 B VILLAS │ TBD │ SAN MARCOS
Product: Tow nhomes 60 1,272 2/2.0 3 2 3.0 $639,000 -$3,000 $0 $18,000 $3,400 $663,400 $522 $320 1.2% 0.0% $3,997 $159,871 Configuration: Attached Villas BTB 24 1,486 3/2.5 3 2 $695,000 -$3,000 $0 $18,000 $3,400 $719,400 $484 $320 1.2% 0.0% $4,307 $172,286 Lot Dimension: Duplex 24 1,832 3/3.0 3 2 $755,000 -$3,000 $0 $18,000 $3,400 $779,400 $425 $320 1.2% 0.0% $4,640 $185,587 Total Units: 108
108 1,444 3.0 $677,222 -$3,000 $0 $18,000 $3,400 $701,622 $486 $320 1.2% 0.0% $4,209 $168,344 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 34 Proposed: Market Rate Apartment Rental Summary
Residential Mixed-Use Analysis
Zonda’s recommended rents average $3,322 ($3.19 per square foot) for the proposed 172 market rate apartment units. We researched comparable communities and average rents in the San Marcos region to recommend target rents. We also programmed a one-month concession during the lease-up period to attract renters, but this would only apply during lease up and is therefore not factored into our NOI calculations on page 7.
$2,500
$2,750
$3,000
$3,250
$3,500
$3,750
$4,000
$4,250
$4,500
600 800 1,000 1,200 1,400 1,600 1,800
Average Rent
Unit Size (Square Feet)
Subject (Five-Story) DTA - San Marcos,
20/Mo.

Source: Zonda
Building # of Est % of Average Base Average Rent Base Net Effective Average Net Effective Estimated Project Type Stories Units Total Units Unit Size Rent $/SF Rent $/SF Conc. Net Base $/SF Avg. Rent $/SF Leases/Month Subject Stacked Flats Five-Story 172 100% 1,043 $3,322 $3.19 $3,322 $3.19 ($277) $3,046 $2.92 $3,046 $2.92 20.00 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 35 Proposed: Market Rate Apartment Rental Detail
Residential Mixed-Use Analysis
Zonda’s recommended base rents for apartment units range from $2,775 to $4,295. We did not program premiums and these should be evaluated when the project comes to market. These proposed rents are consistent with the actively leasing competitive apartment communities.

Zonda used these values in our assessment of potential rents as the Proposed land use scenario. Our positioning rational versus the competitive for-rent residential market is explained in the following section.

Property Name Lease Base Est. Avg. Rent Net. Eff.

Location Client/Developer Orig. Size Pkg Up Monthly Avg. Monthly Conc. Avg Product Details Lease Summary Mix SF Bed Bath Level Pkg Typ Rate Rent $/SF Prem. Rent $/SF Total Rent $/SF Subject DTA - San Marcos 86 740 1 1.0 1 1 Garage 20.0 $2,775 $3.75 $0 $2,775 $3.75 ($231) $2,544 $3.44 Location: San Marcos, CA 62 1,256 2 2.5 1 2 Garage $3,705 $2.95 $0 $3,705 $2.95 ($309) $3,396 $2.70 Product: Stacked Flats Total Units: 172 24 1,579 3 2.5 1 2 Garage $4,295 $2.72 $0 $4,295 $2.72 ($358) $3,937 $2.49 Building Stories: Five-Story Est Market Entry: TBD
Parking (Included): Garages & Open
1,043 20.0 $3,322 $3.19 $0 $3,322 $3.19 ($277) $3,046 $2.92Summary Statistics:

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 36 Based on San Diego County’s affordable guidelines, the table below calculates the rent limits for studios, one-bedroom plans, and two- bedroom plans at 30%, 50%, 80%, and 100% of AMI. The allocated ratios of target income level for the intended low-income housing at the Subject is 20% of the units set aside for 30% and 50% AMI respectively, 35% set aside for 80% AMI households, and the remaining 25% targeted to 100% AMI. Using the rent table, the weighted average monthly rental rate of $2.43 per square foot is used in our estimation of Proposed: Affordable Low Income Apartment Rental Detail Residential Mixed-Use Analysis
Source: Novogradac, San Diego County
FAMILY
SIZE
100% of AMI
Low Income
80% of AMI
Low Income
50% of AMI
Very Low
Income
30% of AMI
Extremely Low
Income
1 $74,850 $72,880 $45,550 $27,330
2 $85,500 $83,280 $52,050 $31,230
3 $96,200 $93,680 $58,550 $35,130
4 $106,900 $104,080 $65,050 $39,030
Efficiency $1,871 $1,822 $1,138 $683
1 Bedroom $2,138 $2,082 $1,301 $780
2 Bedroom $2,405 $2,342 $1,463 $878
San Diego County Income Limits (Eff. April 2022)
100% = $106,900
AMI AMI Total Avg.

Level # Units % Share Allocation # Rent 1 bed Rent 2 bed Rent Revenue Rent/SF 30% 14 20.59% 20% 3 $683 7 $732 4 $878
50% 13 19.12% 20% 3 $1,138 7 $1,220 3 $1,463
80% 24 35.29% 35% 5 $1,822 13 $1,952 6 $2,342
100% 17 25.00% 25% 3 $1,871 9 $2,138 5 $2,405
Totals 68 14 $20,186 36 $58,282 18 $33,978 $112,446 $2.43 Efficiencies
possible value on an NOI basis on page 7 of this report.

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 37 Competitive For-Sale
Market Positioning
38 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos Competitive Project Location Summary
Competitive For-Sale Market Analysis
Zonda considered comparable townhome communities proximate to the Subject site, located in San Marcos, Vista and Escondido.

Silverado, Mission Villas 2, Amber at Sunrise, Jade at Sunrise, and Eclipse are all townhome communities. Their locations in relation to the Subject are shown below.

Jade at
Sunrise
Mission
Villas 2
Silverado
Eclipse
Contracts/ Avg. ▬ Incentive ▬ ▬ Typ. Spend. ▬ Est. Est. ▬ Pymt Imp. ▬ Total Sales L3M Unit Base Price Opt. / Opt. / Lot Closing Closing Closing $/ Mo. Mo.

Ref Community - Builder City/Master Plan* Config. Units Pace SP Size Price Reduc. Upgrd. Upgrd. Prem. Price $/SF Incentive HOA Tax Paymnt 1 Amber at Sunrise - Lennar Sunrise* ATT 100 - - 1,553 $640,400 $0 $0 $19,212 $3,202 $662,814 $427 -$3,000 $356 1.5% $4,177 2 Jade at Sunrise - Lennar Sunrise* ATT 92 8.68 9.00 1,687 $638,100 $0 $0 $19,143 $3,191 $660,434 $398 -$3,000 $356 1.5% $4,164 3 Mission Villas 2 - KB Home San Marcos 3-story BTB 67 5.88 7.33 1,374 $729,323 $0 $0 $21,880 $3,647 $754,850 $558 $0 $337 1.3% $4,554 4 Silverado - KB Home Vista 2-Story Row 62 4.63 3.33 1,835 $760,718 $0 $0 $22,822 $3,804 $787,343 $429 $0 $300 1.2% $4,664 5 Eclipse - California West Communities Escondido 3-story Row 113 6.57 6.67 1,383 $640,150 $0 $0 $19,205 $3,201 $662,555 $485 $0 $274 1.8% $4,266 Total Units - CMA: 87 Average: 6.44 6.58 1,566 $681,738 $0 $0 $20,452 $3,409 $705,599 $459 -$1,200 $325 1.4% $4,365 39 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos Total Price Positioning vs Competitive Market
Competitive For-Sale Market Analysis
Proposed total pricing is sandwiched in between Mission Villas 2 which is in the 92069-zip code of North San Marcos, and Eclipse in South Escondido. Mission Villas 2 is located closer to the epicenter of the North City, a more desirable location, and therefore higher priced than the Subject. Conversely, Amber and Jade at Sunrise are located in a challenging area of San Marcos, and therefore represent the lowest end of this attached Submarket.
$550,000
$600,000
$650,000
$700,000
$750,000
$800,000
$850,000
1,000 1,100 1,200 1,300 1,400 1,500 1,600 1,700 1,800 1,900 2,000 Estimated Closing Price
Unit Size
Rowhomes (Townhomes) - Attached 3-Story, 3.0 sls per mo Villas (Townhomes) - Attached Villas Btb, 3.0 sls per mo Amber at Sunrise - ATT, Lennar, -/- sls per mo.

Jade at Sunrise - ATT, Lennar, 8.7/9.0 sls per mo.

Mission Villas 2 - 3-story BTB, KB Home, 5.9/7.3 sls per mo.

Silverado - 2-Story Row, KB Home, 4.6/3.3 sls per mo.

Eclipse - 3-story Row, California West Communities, 6.6/6.7 sls per mo.

Source: Zonda
40 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos Total Price Positioning vs Monthly Payment
Competitive For-Sale Market Analysis
The Subject is appropriately positioned towards the middle of the market of new home monthly payments. Zonda assumed an HOA fee of roughly $320 at the Subject, along with a total property tax rate of 1.20%, but we have not confirmed this with the Builder. These numbers could be significantly higher, and we took this into consideration in our positioning, which leaves room for an increase in the actuals.
$3,500
$3,700
$3,900
$4,100
$4,300
$4,500
$4,700
$4,900
$5,100
1,000 1,100 1,200 1,300 1,400 1,500 1,600 1,700 1,800 1,900 2,000 Estimated Monthly Payment
Unit Size
Rowhomes (Townhomes) - Attached 3-Story, 3.0 sls per mo Villas (Townhomes) - Attached Villas Btb, 3.0 sls per mo Amber at Sunrise - ATT, Lennar, -/- sls per mo.

Jade at Sunrise - ATT, Lennar, 8.7/9.0 sls per mo.

Mission Villas 2 - 3-story BTB, KB Home, 5.9/7.3 sls per mo.

Silverado - 2-Story Row, KB Home, 4.6/3.3 sls per mo.

Eclipse - 3-story Row, California West Communities, 6.6/6.7 sls per mo.

Source: Zonda
41 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos Recommended Sales Pace
Competitive For-Sale Market Analysis
Our elasticity of demand analysis indicates an elastic relationship between price and absorption, with smaller lower priced units selling at a higher pace than more expensive unit sizes. The Zonda projected sales pace recommendations are on the conservative side in today’s market at 3 units per month per product line as interest rates rise and sales slow. Absorption of 6 homes total per month accounts for future market fluctuation.

0.0 1.0

2.0 3.0

4.0 5.0

6.0 7.0

8.0 9.0

10.0 $640,000 $660,000 $680,000 $700,000 $720,000 $740,000 $760,000 $780,000 $800,000 Sales Pace
Estimated Closing Price
Estimated Sales Pace - Subject CMA - Overall Sales Pace CMA - L3M Sales Pace Source: Zonda
Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 42 Competitive For-Sale Market Detail
Competitive For-Sale Market Analysis
▬ Incentives ▬ ▬ Typical Spending ▬ Estimated Est. ▬ Pymt Impacting ▬ 80.0% 35.0% Project Size Base Price Options/ Options / Lot Closing Closing Closing $/ Mo. Base Addl 5.5% Qualifying Project Detail (SF) Bd/Ba Level Pkg Price Reduction Upgrades Upgrades Premiums Price $/SF Incentive HOA Tax Taxes Mo.Pmt. Income 1 Amber at Sunrise │ Lennar │ Sunrise │ San Marcos │ Townhomes - ATT OR ATT Total Units/Remaining: 100 / 95 1,468 3/2.5 2 2 $620,900 $0 $0 $18,627 $3,105 $642,632 $438 -$3,000 $356 1.2% 0.3% $4,066 $162,640 Contracts: 5 1,497 3/2.5 2 2 $628,900 $0 $0 $18,867 $3,145 $650,912 $435 -$3,000 $356 1.2% 0.3% $4,112 $164,464 Sales Pace Overall: - 1,615 3/2.5 2 2 $650,900 $0 $0 $19,527 $3,255 $673,682 $417 -$3,000 $356 1.2% 0.3% $4,237 $169,482 Sales Pace L3M: - 1,632 3/2.5 2 2 $660,900 $0 $0 $19,827 $3,305 $684,032 $419 -$3,000 $356 1.2% 0.3% $4,294 $171,763 1,553 $640,400 $0 $0 $19,212 $3,202 $662,814 $427 -$3,000 $356 1.2% 0.3% $4,177 $167,087 2 Jade at Sunrise │ Lennar │ Sunrise │ San Marcos │ Townhomes - ATT OR ATT │ Expected Sell-Out By 02/23 at 8.68 per mo.

Total Units/Remaining: 92 / 62 1,231 2/2.5 3 2 $559,900 $0 $0 $16,797 $2,800 $579,497 $471 -$3,000 $356 1.2% 0.4% $3,718 $148,727 Contracts: 30 1,501 3/3 3 2 $612,900 $0 $0 $18,387 $3,065 $634,352 $423 -$3,000 $356 1.2% 0.3% $4,020 $160,815 Sales Pace Overall: 8.7 1,858 3/3.5 3 2 $655,900 $0 $0 $19,677 $3,280 $678,857 $365 -$3,000 $356 1.2% 0.3% $4,266 $170,622 Sales Pace L3M: 9.0 1,911 4/3.5 3 2 $680,900 $0 $0 $20,427 $3,405 $704,732 $369 -$3,000 $356 1.2% 0.3% $4,408 $176,324 1,934 4/3.5 3 2 $680,900 $0 $0 $20,427 $3,405 $704,732 $364 -$3,000 $356 1.2% 0.3% $4,408 $176,324 1,687 $638,100 $0 $0 $19,143 $3,191 $660,434 $398 -$3,000 $356 1.2% 0.3% $4,164 $166,563 3 Mission Villas 2 │ KB Home │ San Marcos │ Townhomes - 3-story BTB │ Expected Sell-Out By 09/22 at 5.88 per mo.

Total Units/Remaining: 67 / 10 1,105 2/2.5 3 2 $647,990 $0 $0 $19,440 $3,240 $670,670 $607 $0 $337 1.1% 0.1% $4,093 $163,721 Contracts: 57 1,331 3/2.5 3 2 $741,990 $0 $0 $22,260 $3,710 $767,960 $577 $0 $337 1.1% 0.1% $4,626 $185,030 Sales Pace Overall: 5.9 1,685 3/3.5 3 2 $797,990 $0 $0 $23,940 $3,990 $825,920 $490 $0 $337 1.1% 0.1% $4,943 $197,724 Sales Pace L3M: 7.3 - - - - - - - - - - - - - - - - -
1,374 $729,323 $0 $0 $21,880 $3,647 $754,850 $558 $0 $337 1.1% 0.1% $4,554 $182,158 4 Silverado │ KB Home │ Vista │ Townhomes - 2-Story Row │ Expected Sell-Out By 03/23 at 4.63 per mo.

Total Units/Remaining: 62 / 36 1,679 3/2.5 2 2 $699,990 $0 $0 $21,000 $3,500 $724,490 $432 $0 $300 1.2% 0.0% $4,315 $172,614 Contracts: 26 1,908 3/2.5 2 2 $786,845 $0 $0 $23,605 $3,934 $814,385 $427 $0 $300 1.2% 0.0% $4,814 $192,543 Sales Pace Overall: 4.6 1,918 3/2.5 2 2 $795,320 $0 $0 $23,860 $3,977 $823,156 $429 $0 $300 1.2% 0.0% $4,862 $194,488 Sales Pace L3M: 3.3 - - - - - - - - - - - - - - - - -
1,835 $760,718 $0 $0 $22,822 $3,804 $787,343 $429 $0 $300 1.2% 0.0% $4,664 $186,548 5 Eclipse │ California West Communities │ Escondido │ Townhomes - 3-story Row │ Expected Sell-Out By 04/23 at 6.57 per mo.

Total Units/Remaining: 113 / 56 1,140 2/2.5 3 2 $604,900 $0 $0 $18,147 $3,025 $626,072 $549 $0 $274 1.8% 0.0% $4,046 $161,859 Contracts: 57 1,290 2/2.5 3 2 $621,900 $0 $0 $18,657 $3,110 $643,667 $499 $0 $274 1.8% 0.0% $4,153 $166,100 Sales Pace Overall: 6.6 1,534 4/3.5 3 2 $647,900 $0 $0 $19,437 $3,240 $670,577 $437 $0 $274 1.8% 0.0% $4,315 $172,586 Sales Pace L3M: 6.7 1,568 3/2.5 3 2 $685,900 $0 $0 $20,577 $3,430 $709,907 $453 $0 $274 1.8% 0.0% $4,552 $182,066 1,383 $640,150 $0 $0 $19,205 $3,201 $662,555 $485 $0 $274 1.8% 0.0% $4,266 $170,653 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 43 Silverado – KB Home, San Marcos/Vista 92078
2-story row-town
Jade at Sunrise – Lennar, San Marcos 92078
3-story row-town
For-Sale Attached Competitors Located in San Marcos (92069, 92078) Competitive For-Sale Market Analysis
Mission Villas 2 – KB Home, San Marcos 92069
3-story B2B towns
Amber at Sunrise – Lennar, San Marcos 92078
2-story row-town
Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 44 Eclipse – California West Homes, Escondido 92025
3-story row-town
For-Sale Competitors Located in Escondido (92025, 92026) Competitive For-Sale Market Analysis
The five afore-mentioned for-sale competitive communities were used to establish a potential value for the proposed land use as townhomes. The following section details the competitive trade market area used to establish value as the original land use designation.

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 45 Competitive Market
Rate Apartment Positioning
46 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos Competitive Project Location Summary
Competitive For-Rent Market Analysis
Zonda considered comparable apartment communities proximate to the Subject, located in San Marcos, Vista, and Carlsbad. All apartments were built after 2014, with Breeze Hill and Anden Townhomes being the newest built in 2019. Marisol Carlsbad located south of the Highway 78 is considered the upper end of this Submarket, and Anden Townhomes provides a perspective for three-bedroom unit rents.

Marc San Marcos
Marisol
Carlsbad
Breeze Hill
Block C
Management Company/ Unit Size Range Rent Range Rent/SF Avg. Eff. Rent Range Eff. Rent/SF # Community/Project Builder Story Total Occ. Min Max Avg Min Max Avg Min Max Avg Conc. Min Max Avg Min Avg Avg Traditional Apartment Competitors 231 762 1,282 1,020 $2,715 $4,012 $3,332 $2.90 $3.89 $3.36 $0 $2,715 $4,012 $3,332 $2.90 $3.78 $3.36 1 Marc San Marcos MG Properties Three 416 97.3% 749 1,357 1,035 $2,433 $3,623 $3,143 $2.67 $3.54 $3.08 $0 $2,433 $3,623 $3,143 $2.67 $3.39 $3.08 2 Block C MG Properties Five 198 97.4% 579 1,010 773 $2,646 $3,572 $3,135 $3.42 $5.22 $4.21 $0 $2,646 $3,572 $3,135 $3.42 $4.90 $4.21 3 Anden THs Greystar Three 118 97.5% 1,235 1,486 1,359 $3,649 $4,604 $4,167 $2.95 $3.15 $3.06 $0 $3,649 $4,604 $4,167 $2.95 $3.15 $3.06 4 Marisol Carlsbad Quarterra Three 278 93.0% 772 1,393 1,107 $2,952 $4,591 $3,609 $2.99 $3.83 $3.30 $0 $2,952 $4,591 $3,609 $2.99 $3.83 $3.30 5 Breeze Hill Sunrise Three 88 95.5% 471 1,036 772 $2,112 $3,396 $2,946 $3.18 $4.80 $3.91 $0 $2,112 $3,396 $2,946 $3.18 $4.64 $3.91 6 Skye Fairfield Three 290 95.2% 791 1,244 1,021 $2,740 $4,260 $3,251 $2.67 $3.59 $3.21 $0 $2,740 $4,260 $3,251 $2.67 $3.53 $3.21 Anden TH
Skye
47 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos Total Rent Positioning vs Competitive Market
Competitive For-Rent Market Analysis
Proposed total rents are positioned consistently with Marc San Marcos, and below the rest of the comparables with more desirable locations and product. This positioning adjusts for the perceived premium for new construction at the Subject, and it considers location, which is in a walkable area but less desirable than the comparables. $2,000
$2,250
$2,500
$2,750
$3,000
$3,250
$3,500
$3,750
$4,000
$4,250
$4,500
$4,750
400 600 800 1,000 1,200 1,400 1,600 1,800
Average Rent/ Monthly Payment
Unit Size (Square Feet)
Subject (Five-Story) DTA - San Marcos, 20/Mo.

Marc San Marcos - 2017, Three-Story, 97.3% Occ.

Block C - 2016, Five-Story, 97.4% Occ.

Anden THs - 2019, Three-Story, 97.5% Occ.

Marisol Carlsbad - 2018, Three-Story, 93.0% Occ.

Breeze Hill - 2019, Three-Story, 95.5% Occ.

Skye - 2016, Three-Story, 95.2% Occ.

Source: Zonda Advisory; Individual Community Management Offices 48 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos Competitive For-Sale Market Detail
Competitive For-Rent Market Analysis
Traditional Apartment Competitors Floorplan Summary
Project Size Pkg Current Rents Current Rent $/SF Rent Concessions Net Effective Net Effective $/SF Project Detail SF Bed Bath Level Pkg Type Low - High Avg. Low - High Avg. Direct Indirect Total Low - High Avg. Low - High Avg. 1 MARC SAN MARCOS │ MG PROPERTIES │ SAN MARCOS │ THREE-STORY │ YEAR BUILT - 2017 % Leased/Occupancy: 97.3/97.3 749 1 1.0 1 1 O $2,433 - $2,649 $2,541 $3.25 - $3.54 $3.39 $0 $0 $0 $2,433 - $2,649 $2,541 $3.25 - $3.54 $3.39 Total Units/Leased: 416/405 924 2 2.0 1 1 O $2,764 - $2,764 $2,764 $2.99 - $2.99 $2.99 $0 $0 $0 $2,764 - $2,764 $2,764 $2.99 - $2.99 $2.99 Available Units: 11 974 2 2.0 1 1 O $3,242 - $3,294 $3,268 $3.33 - $3.38 $3.36 $0 $0 $0 $3,242 - $3,294 $3,268 $3.33 - $3.38 $3.36 Turnover/Monthly: - 1,053 2 2.0 1 1 O $3,385 - $3,385 $3,385 $3.21 - $3.21 $3.21 $0 $0 $0 $3,385 - $3,385 $3,385 $3.21 - $3.21 $3.21 Lease-Up Rate: - 1,155 2 3.0 2 1 O $3,278 - $3,278 $3,278 $2.84 - $2.84 $2.84 $0 $0 $0 $3,278 - $3,278 $3,278 $2.84 - $2.84 $2.84 1,357 2 2.0 2 1 O $3,620 - $3,623 $3,622 $2.67 - $2.67 $2.67 $0 $0 $0 $3,620 - $3,623 $3,622 $2.67 - $2.67 $2.67 1,035 $2,433 - $3,623 $3,143 $2.67 - $3.54 $3.04 $0 $0 $0 $2,433 - $3,623 $3,143 $2.67 - $3.54 $3.04 2 BLOCK C │ MG PROPERTIES │ SAN MARCOS │ FIVE-STORY │ YEAR BUILT - 2016 % Leased/Occupancy: 97.4/97.4 579 1 1.0 1 1 O $2,646 - $3,024 $2,835 $4.57 - $5.22 $4.90 $0 $0 $0 $2,646 - $3,024 $2,835 $4.57 - $5.22 $4.90 Total Units/Leased: 198/193 595 1 1.0 1 1 O $2,677 - $2,987 $2,832 $4.50 - $5.02 $4.76 $0 $0 $0 $2,677 - $2,987 $2,832 $4.50 - $5.02 $4.76 Available Units: 5 906 2 2.0 1 1 O $3,096 - $3,531 $3,314 $3.42 - $3.90 $3.66 $0 $0 $0 $3,096 - $3,531 $3,314 $3.42 - $3.90 $3.66 Turnover/Monthly: - 1,010 2 2.0 1 1 O $3,543 - $3,572 $3,558 $3.51 - $3.54 $3.52 $0 $0 $0 $3,543 - $3,572 $3,558 $3.51 - $3.54 $3.52 Lease-Up Rate: -
773 $2,646 - $3,572 $3,135 $3.42 - $5.22 $4.06 $0 $0 $0 $2,646 - $3,572 $3,135 $3.42 - $5.22 $4.06 3 ANDEN THS │ GREYSTAR │ SAN MARCOS │ THREE-STORY │ YEAR BUILT - 2019 % Leased/Occupancy: 97.5/97.5 1,235 2 2.5 3 2 DAG $3,649 - $3,649 $3,649 $2.95 - $2.95 $2.95 $0 $0 $0 $3,649 - $3,649 $3,649 $2.95 - $2.95 $2.95 Total Units/Leased: 118/115 1,357 3 3.0 3 3 DAG $4,279 - $4,279 $4,279 $3.15 - $3.15 $3.15 $0 $0 $0 $4,279 - $4,279 $4,279 $3.15 - $3.15 $3.15 Available Units: 3 1,486 3 3.0 3 4 DAG $4,544 - $4,604 $4,574 $3.06 - $3.10 $3.08 $0 $0 $0 $4,544 - $4,604 $4,574 $3.06 - $3.10 $3.08 Turnover/Monthly: -
Lease-Up Rate: -
1,359 $3,649 - $4,604 $4,167 $2.95 - $3.15 $3.07 $0 $0 $0 $3,649 - $4,604 $4,167 $2.95 - $3.15 $3.07 49 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos Competitive For-Sale Market Detail
Competitive For-Rent Market Analysis
Traditional Apartment Competitors Floorplan Summary
Project Size Pkg Current Rents Current Rent $/SF Rent Concessions Net Effective Net Effective $/SF Project Detail SF Bed Bath Level Pkg Type Low - High Avg. Low - High Avg. Direct Indirect Total Low - High Avg. Low - High Avg. 4 MARISOL CARLSBAD │ QUARTERRA │ CARLSBAD │ THREE-STORY │ YEAR BUILT - 2018 % Leased/Occupancy: 93.0/93.0 772 1 1.0 1 1 O $2,954 - $2,954 $2,954 $3.83 - $3.83 $3.83 $0 $0 $0 $2,954 - $2,954 $2,954 $3.83 - $3.83 $3.83 Total Units/Leased: 278/259 781 1 1.0 1 1 O $2,952 - $2,952 $2,952 $3.78 - $3.78 $3.78 $0 $0 $0 $2,952 - $2,952 $2,952 $3.78 - $3.78 $3.78 Available Units: 19 1,123 2 2.0 1 1 O $3,508 - $3,508 $3,508 $3.12 - $3.12 $3.12 $0 $0 $0 $3,508 - $3,508 $3,508 $3.12 - $3.12 $3.12 Turnover/Monthly: - 1,135 2 2.0 1 1 O $3,396 - $3,396 $3,396 $2.99 - $2.99 $2.99 $0 $0 $0 $3,396 - $3,396 $3,396 $2.99 - $2.99 $2.99 Lease-Up Rate: - 1,142 2 2.0 1 1 O $3,478 - $3,478 $3,478 $3.05 - $3.05 $3.05 $0 $0 $0 $3,478 - $3,478 $3,478 $3.05 - $3.05 $3.05 1,152 2 2.0 1 1 O $3,463 - $3,463 $3,463 $3.01 - $3.01 $3.01 $0 $0 $0 $3,463 - $3,463 $3,463 $3.01 - $3.01 $3.01 1,360 3 2.0 1 1 O $4,526 - $4,526 $4,526 $3.33 - $3.33 $3.33 $0 $0 $0 $4,526 - $4,526 $4,526 $3.33 - $3.33 $3.33 1,393 3 2.0 1 1 O $4,591 - $4,591 $4,591 $3.30 - $3.30 $3.30 $0 $0 $0 $4,591 - $4,591 $4,591 $3.30 - $3.30 $3.30 1,107 $2,952 - $4,591 $3,609 $2.99 - $3.83 $3.26 $0 $0 $0 $2,952 - $4,591 $3,609 $2.99 - $3.83 $3.26 5 BREEZE HILL │ SUNRISE │ VISTA │ THREE-STORY │ YEAR BUILT - 2019 % Leased/Occupancy: 95.5/95.5 471 0 1.0 1 1 O $2,112 - $2,262 $2,187 $4.48 - $4.80 $4.64 $0 $0 $0 $2,112 - $2,262 $2,187 $4.48 - $4.80 $4.64 Total Units/Leased: 88/84 661 1 1.0 1 1 O $2,949 - $2,949 $2,949 $4.46 - $4.46 $4.46 $0 $0 $0 $2,949 - $2,949 $2,949 $4.46 - $4.46 $4.46 Available Units: 4 682 1 1.0 1 1 O $2,893 - $2,893 $2,893 $4.24 - $4.24 $4.24 $0 $0 $0 $2,893 - $2,893 $2,893 $4.24 - $4.24 $4.24 Turnover/Monthly: - 700 1 1.0 1 1 O $3,164 - $3,164 $3,164 $4.52 - $4.52 $4.52 $0 $0 $0 $3,164 - $3,164 $3,164 $4.52 - $4.52 $4.52 Lease-Up Rate: - 722 0 1.0 1 1 O $2,838 - $2,838 $2,838 $3.93 - $3.93 $3.93 $0 $0 $0 $2,838 - $2,838 $2,838 $3.93 - $3.93 $3.93 741 2 2.0 1 1 O $2,671 - $2,721 $2,696 $3.60 - $3.67 $3.64 $0 $0 $0 $2,671 - $2,721 $2,696 $3.60 - $3.67 $3.64 851 2 2.0 1 1 O $2,866 - $3,066 $2,966 $3.37 - $3.60 $3.49 $0 $0 $0 $2,866 - $3,066 $2,966 $3.37 - $3.60 $3.49 876 2 2.0 1 1 O $3,071 - $3,286 $3,179 $3.51 - $3.75 $3.63 $0 $0 $0 $3,071 - $3,286 $3,179 $3.51 - $3.75 $3.63 984 2 2.0 1 1 O $3,131 - $3,249 $3,190 $3.18 - $3.30 $3.24 $0 $0 $0 $3,131 - $3,249 $3,190 $3.18 - $3.30 $3.24 1,036 2 2.0 1 1 O $3,396 - $3,396 $3,396 $3.28 - $3.28 $3.28 $0 $0 $0 $3,396 - $3,396 $3,396 $3.28 - $3.28 $3.28 772 $2,112 - $3,396 $2,946 $3.18 - $4.80 $3.81 $0 $0 $0 $2,112 - $3,396 $2,946 $3.18 - $4.80 $3.81 6 SKYE │ F AIRFIELD │ VISTA │ THREE-STORY │ YEAR BUILT - 2016 % Leased/Occupancy: 95.2/95.2 791 1 1.0 1 1 O $2,740 - $2,840 $2,790 $3.46 - $3.59 $3.53 $0 $0 $0 $2,740 - $2,840 $2,790 $3.46 - $3.59 $3.53 Total Units/Leased: 290/276 839 1 1.0 1 1 O $2,830 - $2,965 $2,898 $3.37 - $3.53 $3.45 $0 $0 $0 $2,830 - $2,965 $2,898 $3.37 - $3.53 $3.45 Available Units: 14 1,082 2 2.0 1 1 O $3,075 - $3,290 $3,183 $2.84 - $3.04 $2.94 $0 $0 $0 $3,075 - $3,290 $3,183 $2.84 - $3.04 $2.94 Turnover/Monthly: - 1,150 2 2.0 1 1 O $3,075 - $3,170 $3,123 $2.67 - $2.76 $2.72 $0 $0 $0 $3,075 - $3,170 $3,123 $2.67 - $2.76 $2.72 Lease-Up Rate: - 1,244 3 2.0 1 1 O $4,260 - $4,260 $4,260 $3.42 - $3.42 $3.42 $0 $0 $0 $4,260 - $4,260 $4,260 $3.42 - $3.42 $3.42 1,021 $2,740 - $4,260 $3,251 $2.67 - $3.59 $3.18 $0 $0 $0 $2,740 - $4,260 $3,251 $2.67 - $3.59 $3.18 50 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos Anden TownhomesMarc San Marcos
Traditional Apartment Comparables
Competitive For-Rent Market Analysis
Block C
Breeze Hill

51 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos SkyeMarisol Carlsbad
Traditional Apartment Comparables
Competitive For-Rent Market Analysis

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 52 The following Multifamily sales were used to help determine a likely sale price for the Multifamily component. Zonda priced the Subject Multifamily building at $500 per square foot average. Cap rates were not available for most apartment buildings, but Zonda used 4.90% per the Submarket average.

Proposed Use: Multifamily Sales
Competitive For-Rent Market Analysis
Property Name Total
Address Type Zoning Acreage List Price Sale Date Year Built # Units Square Feet Total SF Sale Price Sale $/SF Sale $/Unit Cap Rate NOI The Rylan Class B Apt - $52,500,000 7/29/2022 2020 126 926 116,676 $52,500,000 $450 $416,667 100 Main St
Vista, 92083
Palomar Station Class A Apt 14.82 $195,000,000 10/11/2021 2014 386 959 424,100 $195,000,000 $460 $505,181 4.71% $9,184,500 1257 Armorlite Drive
San Marcos, 92069
Piazza D'Oro Class B Apt - $112,000,000 10/16/2020 2010 221 1,506 332,826 $112,000,000 $337 $506,787 3402 Piazza De Oro Way
Oceanside, 92056
Sofi Ocean Hills Class A Apt 24.15 $196,000,000 1987 404 858 346,632 $196,000,000 $565 $485,149 3500 Windrift Way
Oceanside, 92056
Min: 1987 126 858 116,676 $52,500,000 $337 $416,667 - - Max: 2020 404 1,506 424,100 $196,000,000 $565 $506,787 - - Median 2012 304 942 339,729 $153,500,000 $455 $495,165 4.7% $9,184,500 Average: 2008 284 1,062 305,059 $138,875,000 $453 $478,446 4.7% $9,184,500 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 53 Location Analysis
Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 54 Current Site Photos
Location Analysis
Current site from Linda Vista
Drive looking northeast
towards site
Industrial zones north of
Subject
Current site from La Mirada
Drive looking towards site
Current site from La
Mirada Drive looking west
55 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos The Subject is a 7.6-acre vacant site located surrounded by high traffic industrial, commercial, and residential zones. Rezoning the site from Industrial (I) to Specific Plan Area (SPA) which would allow the development of the for-sale rowhomes and villas, the rental apartment units, and the affordable flats. The Grand Plaza shopping mall is across the street from the eastern portion of the site. It provides shopping, services, and food options within a short walk or drive.

Source: City of San Marcos – Creek District Specific Plan Aerial Location Map
Location Analysis
San Marcos View
Estates
Grand Plaza
Shopping Mall
Palomar
Estates
Rancho Vallecitos
Mobile Home Park
Lakeview
Mobile Estates

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 56 Employees by Zip Code Drive Time Map
Location Analysis
Collectively there are 35,974 employees in the two San Marcos zip codes, with 18,046 in the Subject zip code 92078. The greatest concentration of local residents commute to destinations along the Highway 78 Corridor, although some do travel as far as Temecula and Downtown San Diego for work.
15-minute
drive time
30-minute
drive time
45-minute
drive time

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 57 Local Resident Commute Patterns
Location Analysis
The City of San Marcos accounts for almost 13% of employment for local residents. The greatest concentration (18.8%) of local residents commute to San Diego for work, while a further 10.7% commute to Carlsbad. Vista and Escondido are also employment centers which account for +/- 8% of resident commuter destinations. A large share (48%) of local residents travel less than 10 miles to work, with am additional 24% travelling 10 to 24 miles each way per day. It should be noted that the City of San Diego also includes Rancho Bernardo south along the I-15, which is less than 10 miles away.

58 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos General Location:
• The Subject is ideally located for a for-sale and rental development owing to the close proximity of supporting commercial uses in the immediate area.
• The Subject is located across the street from the Grand Plaza shopping center that includes retail, restaurants, Sprouts Farmers Market, • The site is proximate to the Palomar College Breeze Bus stops which provides access west to Oceanside and east to Escondido.

Existing Site Conditions and Zoning:

The Subject parcel is currently vacant disturbed vegetation with Industrial (I) zoning. The site is located less than one mile northeast of State Route 78 (SR 78) which will feed prospective renters and buyers toward the site. • Existing Improvements:
– Concrete sidewalk runs along N Las Posas Rd.
– Bike lane runs along both N Las Posas Rd.
– All sides of the Subject can provide different entries to each individual product. – Across the street from the site on N Las Posas Rd is the Grand Plaza shopping mall, retail, restaurants, and fast-food. – North, west, and south of the site are industrial buildings. – Southwest from the Subject along Linda Vista Dr. is Bradley Park, which has dedicated baseball and soccer areas, a park, walking paths, and sitting areas.
• Topography: The site is relatively flat, with only existing disturbed vegetation Source: City of San Marcos
Current Site Conditions
Location Analysis
59 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos Power Inn Apartments│ Virtua Opportunity Zone Fund I, LLC │ 59 The Subject has excellent access to public transportation options including the Breeze Bus line, the Inland Rail Trail and Rail Sprinter lines.

Area Public Transit
Location Analysis
The nearest Breeze bus stop is the Palomar
College Transit Center and is located less than
one mile east of the Subject along W Mission
Rd. The Sprinter Rail Line runs along Mission
Rd., and the closest Sprinter Rail line stop is
also at the Palomar College Transit Center less
than one mile from the Subject.
60 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos The Sprinter light rail is a 22-mile rail system that connects Oceanside, Vista, San Marcos, and Escondido, serving 15 stations along the Highway 78 corridor. The nearest Sprinter stop is the Palomar College Station stop, located less than one mile to the west along Mission Road.

Source: North County Transit District
Sprinter Transit Map
Location Analysis
61 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos Subject Close-Up

1.5-mile
Source: ESRI
The high surface street traffic counts in the City of San Marcos on S. Las Posas Rd will positively impact the success of the site as both an industrial center or residential villas, rowhomes, and apartments. The average daily traffic count along S. Las Posas Rd in a 1.5-mile radius ranges from 14,000 to 30,000, which is very high, and conducive to the Proposed site plans.

Average Daily Traffic Count
Location Analysis

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 62 Land Use & Zoning Analysis
63 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos The Subject is located in the City of San Marcos. The San Marcos General Plan is shown below with the Subject outlined in red. The zoning for the site is currently Industrial (I). The proposed rezone for the Subject is to Specific Plan Area (SPA).

Source: City of San Marcos
Land Use Map
Location, Land Use & Zoning Analysis

64 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos The applicant is seeking a General Plan
Amendment and a Rezone for the site
which currently falls under Industrial (I).

Under the Original Use, the Subject 33.2-
acre property at northwest corner of S. Las
Posas Rd. and Linda Vista Dr. could support
400,000 to 480,000 square feet of
industrial space and up to 1,440 parking
spaces in 15.09 acres. Rezoning the land to
Specific Plan Area (SPA) would support the
proposed 449 homes and 900 parking
spaces on 14.58 acres.

Land Use Map Detail & Alternative Plan
Location, Land Use & Zoning Analysis
Source: City of San Marcos
65 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos Source: City of San Marcos
According to the zoning maps from the City of San Marcos, the Subject is zoned Industrial (I). Under the current zoning, industrial sites have a limit of 60 feet maximum building height. The Original Scenario proposes a height limit of 45 feet.

Zoning Map Detail
Location, Land Use & Zoning Analysis

66 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos Source: City of San Marco Zoning Ordinance
Permitted Uses Under the “I” Land Use Designations
Location, Land Use & Zoning Analysis
Properties with the General Plan land use designation of “Industrial” can include a mix of recreation/education/public assembly, office/professional/business support services, service uses, industrial/manufacturing/processing uses, recycling facilities, or transportation/communication/utility uses. Specific Plan Area (SPA) Zones allow flexibility to developers regarding land development, however there are some regulations. SPA Zone Specific Plans on properties with the General Plan land use designation of “Mixed Use” shall include a mixed-use component. All other properties that are designated with a “Special Consideration” designation on the General Plan Land Use map shall include a development proposal that is consistent with the General Plan land use, which may include residential, senior residential, commercial, or industrial development. Below are permitted land uses for the current zoning of Industrial zones.

67 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos The Proposed Use is to rezone the Subject site to a Specific Plan Area (SPA) that will allow for the development of 449 residential units including three-story rowhomes and villas, apartment units within a five-story podium, and affordable flats within a four-story building.

The site is 14.58 net acres with four proposed product types (villas & rowhomes for-sale, rental apartments, and affordable flats for-rent).

The project is proposing a Specific Plan which dictates the density on the site between 12.1 – 15 du/ac based on the gross acreage for each Proposed Use. The proposal of 449 total units equates to a density of 13.51 du/ac. Under the Proposed SPA zoning, no specific building restrictions are assigned.

Source: City of San Marcos
Permitted “SPA” Land Uses
Location, Land Use & Zoning Analysis
68 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos Source: City of San Marcos
Permitted Industrial Land Uses
Location, Land Use & Zoning Analysis
The following charts represent the permitted uses for an Industrial zone in the City of San Marcos. The land uses Light Industrial (L-I), Business Park (BP), Industrial (I), and Industrial-2 (I- 2) all fall under Industrial Zoning. The original zoning at the site is Industrial (I) highlighted below.
69 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos Permitted Industrial Land Uses
Location, Land Use & Zoning Analysis

70 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos Title Rate
COUNTY-PROPOSITION 13 1.00000
PALOMAR HEALTH 2005A - DEBT SERVICE 0.02100
UNIF BOND SAN MARCOS SFID #1-6/04/96, 2004-1 REF 0.01223 UNIF BOND SAN MARCOS-PROP K 11/02/2010, SER 2010A 0.00761 UNIF BOND SAN MARCOS-PROP K 11/02/2010, SER 2010B 0.00189 UNIF BOND SAN MARCOS-PROP K 11/02/2010, SER 2010C 0.01305 UNIF BOND SAN MARCOS-PROP K 11/02/2010, 2017 REF 0.01325 UNIF BOND SAN MARCOS-PROP K 11/02/2010, SER 2010D 0.01842 PALOMAR COMMUNITY COLL PROP M 11/07/06, SER 2006B 0.00371 PALOMAR COMMUNITY COLL PROP M 11/07/06, 2015 REF 0.00642 PALOMAR COMMUNITY COLL PROP M 11/07/06, SER 2006C 0.00712 PALOMAR COMMUNITY COLL PROP M 11/07/06, SER 2017D 0.00365 PALOMAR COMMUNITY COLL PROP M 11/07/06, 2017 REF 0.00000 MWD D/S REMAINDER OF SDCWA 15019999 0.00350
Total Tax Rate: 1.11185
Source: SanGIS, http://www2.sdcounty.ca.gov/pts/trasearch.asp The Subject parcel is assigned to the tax rate area (TRA) 13115. An analysis of the base tax rate and additional tax obligations brings the total tax rate to 1.11185%. The breakdown of the additional tax breakdowns are listed below. The TRA (13115) is shown below in yellow.

Tax Rate Area Map
Location, Land Use & Zoning Analysis
Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 71 Demographic Overview
Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 72 20-Minute Drive Time CMA
Demographic Overview
The following section focuses on demographics in the competitive market area (CMA) which is defined as a 20-Minute Drive time from the Subject, and includes the areas of San Marcos, Vista, Escondido, Oceanside, Carlsbad, Rancho Bernardo and Encinitas.

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 73 Median Household Income in the CMA
Demographic Overview
The Subject Zip code 92078 has a median income of about $110,000, with concentrations of higher incomes in the census tracts south of the Subject. Incomes by zip code are shown on the inset map below, and at a census tract level on the larger map. 20-minute
drive time
30-minute
drive time
45-minute
drive time

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 74 Average Net Worth in the CMA
Demographic Overview
Average net worth in the Subject zip code
92078 is a little over $1.4M and much higher
than neighboring San Marcos zip code 92069
at about $1M. Net worth is a strong indicator
of area wealth as it adjusts for retirees who
may no longer be working but are
nevertheless affluent.
20-minute
drive time
30-minute
drive time
45-minute
drive time

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 75 Population, Household Profile and Age
Demographic Overview
The City of San Marcos has a population of just under 100,000 living in 31,000 households which tend to be larger in size at 3.0 people compared with 2.8 for the CMA and the Subject’s zip code 92078. Median age in San Marcos overall is slightly younger than the CMA, which mirrors the 92078-zip code.

Paste Paste
Paste Paste
Source: ESRI

38.0 34.8

37.5 33.0

34.0 35.0

36.0 37.0

38.0 39.0
CMA - 20-Minute Drive Time City of San Marcos Subject Zip Code 92078 Median Age (2022)

2.8 3.0

2.8 2.7

2.7 2.8

2.8 2.9

2.9 3.0

3.0 3.1
CMA - 20-Minute Drive Time City of San Marcos Subject Zip Code 92078 Avg. HH. Size (2022)
739,225
96,062 53,836
0 100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
CMA - 20-Minute Drive
Time
City of San Marcos Subject Zip Code 92078
Total Population (2022)
260,563
30,943 18,427
0 50,000
100,000
150,000
200,000
250,000
300,000
CMA - 20-Minute Drive
Time
City of San Marcos Subject Zip Code 92078
Total Households (2022)
Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 76 Income, Net Worth, Occupation & Education
Demographic Overview
The Subject’s zip code 98078 has the highest income and net worth compared to the CMA and city of San Marcos. The CMA, City of San Marcos, and Zip Code 92078 all have under 60% educational attainment and more than 60% of residents working in white-collar jobs. The north San Marcos zip code has a lower proportion of high earning professionals than the south zip code.

Paste Paste
Paste Paste
Source: ESRI
$98K
$101K
$109K
$90,000
$92,000
$94,000
$96,000
$98,000
$100,000
$102,000
$104,000
$106,000
$108,000
$110,000
$112,000
CMA - 20-Minute Drive Time City of San Marcos Subject Zip Code 92078 HH. Income (2022)
$212K
$219K
$244K
$190,000
$200,000
$210,000
$220,000
$230,000
$240,000
$250,000
CMA - 20-Minute Drive Time City of San Marcos Subject Zip Code 92078 Net Worth (2022)

52.0%

50.4%

59.1%

46.0%

48.0%

50.0%

52.0%

54.0%

56.0%

58.0%

60.0%
CMA - 20-Minute Drive Time City of San Marcos Subject Zip Code 92078 Educational Attainment - Bachelor's or Higher (2022)

64.4% 64.0%

74.2%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%
CMA - 20-Minute Drive Time City of San Marcos Subject Zip Code 92078 Occupation (2022)
White Collar Services Blue Collar
Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 77 Demographic Tapestry Profile
Demographic Overview
CMA - 20-Minute Drive Time
Rank Cluster Lifestyle Group Household Type Diversity Index
Ow n vs.

Rent Preferred Housing Age HH
Size HH Income Net Worth Home
Value HH % Age HH
Size HH Income Net Worth Home
Value HH %
1 2B: Pleasantville Upscale Avenues 60 83% Single Family 42.3 2.9 $89,300 $314,900 $355,600 2.1% 41.3 3.1 $120,437 $425,810 $875,263 10.1% 2 1E: Exurbanites Affluent Estates Married Couples 34 85% Single Family 50.4 2.5 $101,800 $483,900 $399,400 1.9% 49.2 2.7 $137,295 $654,333 $983,071 7.0% 3 1C: Boomburbs Affluent Estates Married Couples 62 84% Single Family 33.7 3.2 $111,200 $348,600 $353,200 1.9% 32.9 3.5 $149,973 $471,380 $869,356 6.1% 4 8C: Bright Young Professionals Middle Ground Married Couples 66 43% Single Family; Multi-Units 32.6 2.4 $53,900 $35,700 $193,900 2.3% 31.8 2.6 $72,694 $48,274 $477,260 5.6% 5 2D: Enterprising Professional Upscale Avenues Married Couples 72 52% Multi-Units; Single Family 35.1 2.5 $81,500 $93,100 $342,400 1.5% 34.3 2.7 $109,917 $125,891 $842,773 5.3% 6 7B: Urban Villages Ethnic Enclaves Married Couples 86 70% Single Family 33.6 3.8 $58,900 $114,300 $279,400 1.0% 32.8 4.1 $79,437 $154,557 $687,707 5.3% 7 2A: Urban Chic Upscale Avenues Married Couples 47 66% Single Family 42.9 2.4 $103,600 $272,500 $577,200 1.3% 41.9 2.6 $139,723 $368,477 $1,420,702 5.2% 8 13C: NeWest Residents Next Wave Married Couples w / Kids 87 17% Multi-Unit Rentals 27.2 3.3 $30,000 $11,000 $140,700 0.8% 26.6 3.6 $40,460 $14,874 $346,315 5.1% 9 13A: Diverse Convergence Next Wave Married Couples w / Kids 89 28% High Density Apts; Single Family 32.6 3.0 $42,900 $15,100 $338,900 1.2% 31.8 3.3 $57,858 $20,418 $834,158 5.1% 10 9E: Retirement Communities Senior Styles Singles 48 45% Multi-Units; Single Family 52.8 1.9 $36,900 $43,500 $175,900 1.2% 51.6 2.0 $49,766 $58,821 $432,955 4.2% City of San Marcos
Rank Cluster Lifestyle Group Household Type Diversity Index
Ow n vs.

Rent Preferred Housing Age HH
Size HH Income Net Worth Home
Value HH % Age HH
Size HH Income Net Worth Home
Value HH %
1 1C: Boomburbs Affluent Estates Married Couples 62 84% Single Family 33.7 3.2 $111,200 $348,600 $353,200 1.9% 30.1 3.8 $154,418 $487,039 $822,572 24.2% 2 8C: Bright Young Professionals Middle Ground Married Couples 66 43% Single Family; Multi-Units 32.6 2.4 $53,900 $35,700 $193,900 2.3% 29.2 2.8 $74,848 $49,877 $451,576 9.3% 3 13C: NeWest Residents Next Wave Married Couples w / Kids 87 17% Multi-Unit Rentals 27.2 3.3 $30,000 $11,000 $140,700 0.8% 24.3 3.9 $41,660 $15,368 $327,678 8.8% 4 4A: Workday Drive Family Landscapes Married Couples 49 85% Single Family 36.8 3.0 $88,600 $272,200 $259,400 3.1% 32.9 3.5 $123,035 $380,298 $604,120 8.5% 5 7B: Urban Villages Ethnic Enclaves Married Couples 86 70% Single Family 33.6 3.8 $58,900 $114,300 $279,400 1.0% 30.1 4.5 $81,792 $159,692 $650,698 6.8% 6 13A: Diverse Convergence Next Wave Married Couples w / Kids 89 28% High Density Apts; Single Family 32.6 3.0 $42,900 $15,100 $338,900 1.2% 29.2 3.6 $59,573 $21,097 $789,269 6.5% 7 2B: Pleasantville Upscale Avenues Married Couples 60 83% Single Family 42.3 2.9 $89,300 $314,900 $355,600 2.1% 37.8 3.4 $124,007 $439,955 $828,162 6.4% 8 9D: Senior Escapes Senior Styles Married Couples w /No Kids 43 75% SF; Mobile Homes/Seasonal 53.4 2.2 $37,300 $102,000 $121,600 0.9% 47.8 2.6 $51,797 $142,507 $283,196 5.1% 9 9E: Retirement Communities Senior Styles Singles 48 45% Multi-Units; Single Family 52.8 1.9 $36,900 $43,500 $175,900 1.2% 47.2 2.2 $51,241 $60,775 $409,656 4.7% 10 4B: Home Improvement Family Landscapes Married Couples 64 80% Single Family 37.4 2.9 $69,600 $186,300 $199,000 1.7% 33.5 3.4 $96,650 $260,285 $463,454 4.7% Subject Zip Code 92078
Rank Cluster Lifestyle Group Household Type Diversity Index
Ow n vs.

Rent Preferred Housing Age HH
Size HH Income Net Worth Home
Value HH % Age HH
Size HH Income Net Worth Home
Value HH %
1 1C: Boomburbs Affluent Estates Married Couples 62 84% Single Family 33.7 3.2 $111,200 $348,600 $353,200 1.9% 32.5 3.5 $167,800 $542,422 $916,952 35.3% 2 9E: Retirement Communities Senior Styles Singles 48 45% Multi-Units; Single Family 52.8 1.9 $36,900 $43,500 $175,900 1.2% 50.9 2.0 $55,682 $67,686 $456,659 15.9% 3 8C: Bright Young Professionals Middle Ground Married Couples 66 43% Single Family; Multi-Units 32.6 2.4 $53,900 $35,700 $193,900 2.3% 31.4 2.6 $81,335 $55,549 $503,389 15.7% 4 4A: Workday Drive Family Landscapes Married Couples 49 85% Single Family 36.8 3.0 $88,600 $272,200 $259,400 3.1% 35.5 3.2 $133,697 $423,544 $673,435 9.5% 5 9C: The Elders Senior Styles Married Couples w /No Kids 21 82% SF; High-Rises; Mob. Hm/Seas. 72.0 1.7 $38,200 $209,800 $180,100 0.7% 69.4 1.8 $57,643 $326,449 $467,562 6.2% Source: ESRI
National Cluster Characteristics Locally Adjusted Characteristics National Cluster Characteristics Locally Adjusted Characteristics National Cluster Characteristics Locally Adjusted Characteristics Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 78 CMA Demographic Profile
Demographic Overview
The San Marcos area is characterized by a mix of lower and high income households, ranging from young to old. Top Lifestyle Groups include affluent “Boomburbs,” Young Professional Couples, low income New Wave Married Couples with Kids, Comfortable Families, above average earning Ethnic Families, and Retirees. Lifestyle Groups are shown below in order of income, with Boomburbs as the highest earners ($150,000+) and NeWest Residents as the lowest earners ($40,000).

Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 79 Economic Overview
Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 80 Population Growth
MSA Economic Trends
Population growth in the MSA is expected to remain at similar levels to 2021 through 2023 and slow from 2023 to 2026. Positive population growth bodes well for the development of new multifamily development, especially with rent increases and limited availability. 0 5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022F 2023F 2024F 2025F 2026F Annual Population Growth
Source: Moody's Analytics; U.S. Census Bureau (BOC)
San Diego-Carlsbad, CA Metropolitan Statistical Area - Moody's Analytics Five-Year Forecast Category 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022F 2023F 2024F 2025F 2026F Total Population 3,174,335 3,209,768 3,248,877 3,280,850 3,306,089 3,321,237 3,333,861 3,338,330 3,343,147 3,355,342 3,367,871 3,381,715 3,391,296 3,397,936 3,404,225 Prior Year Change 37,179 35,433 39,109 31,973 25,239 15,148 12,624 4,469 4,817 12,194 12,529 13,845 9,581 6,640 6,289 Annual % Change 1.2% 1.1% 1.2% 1.0% 0.8% 0.5% 0.4% 0.1% 0.1% 0.4% 0.4% 0.4% 0.3% 0.2% 0.2% Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 81 Residential Building Permits
MSA Economic Trends
Building permits in the MSA are expected to continue to increase through 2024 and stay above the historical average of +/- 9,513 units through 2026. The area demand for new homes in turn triggers demand for sale and rental homes such as the proposed site. 0 2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022F 2023F 2024F 2025F 2026F Residential Building Permits
SFD Building Permits MF Building Permits Historical AverageSource: Moody's Analytics; U.S. Bureau of Labor Statistics (BLS) San Diego-Carlsbad, CA Metropolitan Statistical Area - Moody's Analytics Five-Year Forecast Category 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022F 2023F 2024F 2025F 2026F Total Building Permits 5,666 8,264 6,875 9,883 10,791 10,441 9,834 8,216 9,472 10,048 11,959 13,233 13,502 12,627 11,430 Annual % Change 5.5% 45.9% -16.8% 43.8% 9.2% -3.2% -5.8% -16.5% 15.3% 6.1% 19.0% 10.7% 2.0% -6.5% -9.5% SFD Building Permits 2,197 2,565 2,487 3,222 2,351 4,056 3,489 3,019 2,900 3,227 5,143 6,591 6,728 6,359 5,906 Annual % Change -2.1% 16.8% -3.0% 29.6% -27.0% 72.5% -14.0% -13.5% -3.9% 11.3% 59.4% 28.1% 2.1% -5.5% -7.1% MF Building Permits 3,469 5,699 4,388 6,661 8,440 6,385 6,345 5,197 6,572 6,821 6,815 6,642 6,774 6,268 5,525 Annual % Change 11.0% 64.3% -23.0% 51.8% 26.7% -24.3% -0.6% -18.1% 26.5% 3.8% -0.1% -2.5% 2.0% -7.5% -11.9% Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 82 Employment
MSA Economic Trends
After 118,000 job losses in the MSA in 2020, unemployment started to recover in 2021 and is forecasted to recover by 2022. Moody’s projects employment will grow at a lower rate from 2023 through 2026. Unemployment spiked to 9.3% in 2020 and is forecast to reach pre-pandemic levels by 2023.

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%
-150,000
-100,000
-50,000
0 50,000
100,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022F2023F2024F2025F2026F Unemployment Rate
Annual Non-Farm Employment Growth
Prior Year Change Unemployment RateSource: Moody's Analytics; U.S. Bureau of Labor Statistics (BLS) San Diego-Carlsbad, CA Metropolitan Statistical Area - Moody's Analytics Five-Year Forecast Category 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022F 2023F 2024F 2025F 2026F Non-Farm Employment 1,282,800 1,316,200 1,344,933 1,384,833 1,422,617 1,452,292 1,482,208 1,503,083 1,385,808 1,437,600 1,514,938 1,542,430 1,562,751 1,575,994 1,583,384 Prior Year Change 32,667 33,400 28,733 39,900 37,783 29,675 29,917 20,875 (117,275) 51,792 77,338 27,492 20,321 13,242 7,390 Annual % Change 2.6% 2.6% 2.2% 3.0% 2.7% 2.1% 2.1% 1.4% -7.8% 3.7% 5.4% 1.8% 1.3% 0.8% 0.5% Unemployment Rate 9.3% 7.9% 6.5% 5.2% 4.7% 4.1% 3.4% 3.3% 9.5% 6.5% 3.8% 3.1% 3.2% 3.3% 3.5% Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 83 Employment by Sector
MSA Economic Trends
The pandemic year saw a sharp decline in most job sectors, but year over year, San Diego is seeing growth in all categories. Leisure & Hospitality, one of the hardest hit industries from the pandemic, has seen the strongest job growth with over 30,000 added jobs since July 2021, followed by Professional & Business Services, and Trade, Transportation & Utilities. Though still positive, Financial Activities, Information, and Manufacturing all saw less than 1,000 jobs added since July 2021. 87 102
13,989
1,477
3,286
5,461
30,691
150
5,717 4,664
0 5,000
10,000
15,000
20,000
25,000
30,000
35,000
Financial
Activities
Information Professional &
Business
Services
Construction &
Mining
Education &
Health Services
Government Leisure &
Hospitality
Manufacturing Other Services Trade, Transp.
and Utilities
Annual Non-Farm Employment Growth
Source: Moody's Analytics; U.S. Bureau of Labor Statistics (BLS) Category Financial
Activities Information
Professional &
Business
Services
Construction &
Mining
Education &
Health Services Government Leisure &
Hospitality Manufacturing Other Services Trade, Transp. and Utilities
Current Month (Jul-2022) 75,715 22,386 282,115 85,332 220,105 243,458 197,914 114,396 54,022 223,150 Current Month (Jul-2021) 75,628 22,284 268,126 83,856 216,820 237,997 167,223 114,246 48,305 218,486 12-Month Change 87 102 13,989 1,477 3,286 5,461 30,691 150 5,717 4,664 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 84 E/P Ratio
MSA Economic Trends
E/P Ratios in excess of 1.2 indicate a supply-constrained housing market with implied price growth. Moody’s Economy.com predicts an E/P ratio jump to over six in 2022 followed by decreasing ratios through 2026. The E/P ratio in the San Diego MSA has not been at what is considered equilibrium (1.2) since 2007 and has been above two since 2021 (excluding 2020 due to the COVID-19 pandemic).

0.9 0.6

1.4 1.6

2.2 1.2
-1.4
-22.4
-2.5

1.9 5.8

4.0 4.2

4.0 3.5

2.8 3.0

2.5 -12.4

5.2 6.5

2.1 1.5

1.0 0.6
-25.0
-20.0
-15.0
-10.0
-5.0

0.0 5.0

10.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022F 2023F 2024F 2025F 2026F EP Ratio
Source: Moody's Analytics; U.S. Bureau of Labor Statistics (BLS) San Diego-Carlsbad, CA Metropolitan Statistical Area - Moody's Analytics Five-Year Forecast Category 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022F 2023F 2024F 2025F 2026F Non-Farm Employment 1,282,800 1,316,200 1,344,933 1,384,833 1,422,617 1,452,292 1,482,208 1,503,083 1,385,808 1,437,600 1,514,938 1,542,430 1,562,751 1,575,994 1,583,384 Prior Year Change 32,667 33,400 28,733 39,900 37,783 29,675 29,917 20,875 (117,275) 51,792 77,338 27,492 20,321 13,242 7,390 Building Permits 5,666 8,264 6,875 9,883 10,791 10,441 9,834 8,216 9,472 10,048 11,959 13,233 13,502 12,627 11,430 Employment/Housing 5.8 4.0 4.2 4.0 3.5 2.8 3.0 2.5 -12.4 5.2 6.5 2.1 1.5 1.0 0.6 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 85 Affordability Index
MSA Economic Trends
The Affordability Index is expected to drop (ie: become less affordable) over the next five years, implying higher priced homes in reaction to lower new home building activity, high interest rates, and the current trend where existing home prices inch ever closer to new home prices. As the existing home market price rises, so new home prices are pushed up, and Moody’s Economy.com predicts that the ratio will remain at +/- 58 the next few years. Affordability in the San Diego MSA has been less than (or equal to) 100 for the last twenty years meaning it has a history of being unaffordable.
71 67
54 49 47
52 78
95 86
95 100
85 82 79 82 79
74 81 85
79 57 56 57 58 57
0 25
50 75
100
125
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022F 2023F 2024F 2025F 2026F Affordability Index
Source: Moody's Analytics; National Association of Realtors (NAR) San Diego-Carlsbad, CA Metropolitan Statistical Area - Moody's Analytics Five-Year Forecast Category 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022F 2023F 2024F 2025F 2026F Affordability Index 100.4 85.2 81.9 78.9 81.8 79.1 73.8 81.2 84.8 78.5 56.9 55.7 56.8 57.5 57.5 Pacific Specific Plan SP22-0001 Update – DTA and City of San Marcos 86 Appendix
Thank you!
Zonda
435 S. Cedros Ave, Suite 304
Solana Beach, CA 92075
(858) 381-4381

San Marcos City CouncilJuly 23, 2024

San Marcos City Council
July 23, 2024