Property Appraisal Report — City Council and Authorities Concurrent, May 24, 2022

Appraisal Report
Loyalton Ranch Property
East of Loyalton and West of Cold Springs in Sierra and Lassen Counties

Report Date: April 18, 2022

FOR:

City of Santa Clara
Mr. Joseph Bruzzone P.E.

Electric Utility Engineer
1500 Warburton Avenue
Santa Clara, California 95050

Valbridge Property Advisors |
Northern California

2813 Coffee Road, Suite E2
Modesto, CA 95355
209.569.0450 phone Valbridge File Number:
408.279.3428 fax CA05-22-0120
valbridge.com

2813 Coffee Road, Suite E2
Modesto, CA 95355
209.569.0450 phone
408.279.3428 fax
valbridge.com

April 18, 2022
John A. Hillas, MAI, SRA
209.569.0450, ext. 7301
[email protected]

Mr. Joseph Bruzzone P.E.

Electric Utility Engineer
City of Santa Clara
1500 Warburton Avenue
Santa Clara, California 95050

RE: Appraisal Report
Loyalton Ranch Property
East of Loyalton and West of Cold Springs in Sierra and Lassen Counties

Dear Mr. Bruzzone,

In accordance with your request, we have performed an appraisal of the above referenced property.

This appraisal report sets forth the pertinent data gathered, the techniques employed, and the reasoning leading to our opinions and conclusions. This letter of transmittal alone does not constitute an appraisal report and the rationale behind the value opinion(s) reported cannot be adequately understood without the accompanying appraisal report.

The subject property, as referenced above, is locate d within Sie rra and Lassen Counties, East of Loyalton and West of Cold Springs, and is further identified as tax parcel number s 147-040-02, 174- 050-02, 147-050-03, 147-050-19, 147-050-20, 147-070-04, 147-070-05, 147-080-01, 147-080-03, 147- 080-11, 147 -080-14, 147 -080-15, 016 -070-012, 016 -080-007, 016 -080-008, 016 -090-011, 016 -090- 059, 016-100-001, 016-100-004, 016-100-005, 016-100-006, 021-010-003, 021-010-006, 021-010-012, 021-010-013, 021-020-001. The subject is a 10,273.95-acre ranch with several smaller components as will be discussed herein.

We developed our analyses, opinions, and conclusions and prepared this report in conformity with the Uniform Standards of Professional Appraisal Pra ctice (USPAP) of the Appraisal Foundation and the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute.

Mr. Joseph Bruzzone P.E
City of Santa Clara

Page 2 ends

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California The client in this assignment is Joseph Bruzzone with the City of Santa Clara and the intended user of this report is Joseph Bruzzone with the City of Santa Clara and no others. The sole intended use is to determine a value for a possible sale of the property.. The value opinions reported herein are subject to the definitions, assumptions, limiting conditions, and certifications contained in this report.

The findings and conclusions are further contingent upon the following extraordinary assumptions and/or hypothetical conditions, the use of which might have affected the assignment results:

Extraordinary Assumptions:
• In terms of physical characteristics of the property, we relied on information provided by our client, along with public record information and technology platforms including google earth.

It is an extrao rdinary assumption of the appraisal that the information contained herein is accurate
• Legal access is assumed to exist for each of the three main property components. It is reported that the acreage has been used for grazing of livestock, and the acreage is thus assumed to be suitable for this use.

Hypothetical Conditions:
• None

Based on the analysis contained in the following report, our value conclusion is as follows:

Respectfully submitted,
Valbridge Property Advisors | Northern California

John A. Hillas, MAI, SRA
Managing Director
California Certified License #AG002432

Component As Is
Value Type Market Value
Property Rights Appraised Fee Simple Estate
Effective Date of Value April 1, 2022
Value Conclusion $4,370,000
$425 per acre
Value Conclusion

LOYALTON RANCH PROPERTY

TABLE OF CONTENTS

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page i Table of Contents
Cover Page
Letter of Transmittal
Table of Contents ....................................................................................................................................................................... i Summary of Salient Facts ....................................................................................................................................................... ii Aerial Photograph .................................................................................................................................................................... iii Location Map ............................................................................................................................................................................. iv Introduction ................................................................................................................................................................................. 1 Scope of Work ............................................................................................................................................................................ 3 Regional and Market Area Analysis .................................................................................................................................... 5 Site Description ....................................................................................................................................................................... 10 Assessment and Tax Data ................................................................................................................................................... 16 Economic Outlook .................................................................................................................................................................. 18 Highest and Best Use ............................................................................................................................................................ 20 Sales Comparison Approach .............................................................................................................................................. 22 Reconciliation ........................................................................................................................................................................... 38 Exposure Time and Marketing Period ....................................................................................................................... 38 General Assumptions and Limiting Conditions .......................................................................................................... 39 Certification – John A. Hillas, MAI, SRA .......................................................................................................................... 44 Addenda .................................................................................................................................................................................... 45 Glossary ................................................................................................................................................................................. 46 Qualifications ...................................................................................................................................................................... 53 Valbridge Property Advisors Information / Office Locations ........................................................................... 56

LOYALTON RANCH PROPERTY

SUMMARY OF SALIENT FACTS

Property Identification
Property Name Loyalton Ranch Property
Property Address East of Loyalton and West of Cold Springs in Sierra and Lassen Counties
Latitude & Longitude 39.67918, -120.130868
Tax Parcel Number
147-040-02, 174-050-02, 147-050-03, 147-050-19, 147-050- 20, 147-070-04, 147-070-05, 147-080-01, 147-080-03, 147- 080-11, 147-080-14, 147-080-15, 016-070-012, 016-080-007, 016-080-008, 016-090-011, 016-090-059, 016-100-001, 016- 100-004, 016-100-005, 016-100-006, 021-010-003, 021-010- 006, 021-010-012, 021-010-013, 021-020-001
Property Owner City of Santa Clara Electric Department
Site
Zoning General Forest, Mixed-industrial, Open Space (GF,MI,OS) FEMA Flood Map No. 06091C0250C
Flood Zone Zone X, Not a Designated Flood Prone Area
Gross Land Area 10,273.950 acres
Sierra County Acres 6,371.46 acres
Lassen County Acres 3,902.49 acres
Usable Land Area 10,273.950 acres
Valuation Opinions
Highest & Best Use - As Vacant Grazing land
Reasonable Exposure Time Four to Six Months
Reasonable Marketing Time Four to Six Months
Approach to Value As Is
Sales Comparison $4,370,000
Cost Not Applicable
Income Capitalization Not Applicable
Component As Is
Value Type Market Value
Property Rights Appraised Fee Simple Estate
Effective Date of Value April 1, 2022
Value Conclusion $4,370,000
$425 per acre
Value Indications
Value Conclusion

LOYALTON RANCH PROPERTY

AERIAL PHOTOGRAPH

AERIAL VIEW

LOYALTON RANCH PROPERTY

LOCATION MAP

LOYALTON RANCH PROPERTY

INTRODUCTION

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 1 Introduction
Client and Intended Users of the Appraisal
The client in this assignment is City of Santa Clara and the sole intended user of this report is Joseph Bruzzone with the City of Santa Clara.

Intended Use of the Appraisal
The sole intended use of this report is to determine a value for a possible sale of the property..

Real Estate Identification
The subject is located within Sierra and Lassen counties, East of Loyalton and West of Cold Springs, and is further identified by tax parcel numbers 147-040-02-11,147-050-02-11,147-050-03-11,147-050- 19-11,147-050-20-11,147-070-04-11,147-070-05-11,147-080-01-11,147-080-03-11, 147 -080-11- 11,147-080-14-11,147-080-15-11,021-010-003,021-020-001,016-100-004, 016-090-059, 021 -010- 006, 021-010-012, 016-100-005, 016-080-008, 016-070-012, 016-090-011, 021-010-013, 016-100-001, 016-100-006 and 016-080-007.

Legal Description
A legal description of the property was not provided. The assessor parcel numbers, maps, and exhibits herein are considered to adequately identify the property.

Use of Real Estate as of the Effective Date of Value
As of the effective date of value, the subject was agricultural undeveloped land.

Use of Real Estate as Reflected in this Appraisal
Same as above.

Ownership of the Property
According to ParcelQuest, title to the subject property is vested as follows: City of Santa Clara Electric Department.

History of the Property
Ownership of the subject has not changed within the past three years. According to the City of Santa Clara, the property was purchased in 1977 for $1,613,850 ($157/acre). We have considered and analyzed the known history of the subject in the development of our opinions and conclusions.

Analysis of Listings/Offers/Contracts
The subject property is not offered for sale on the open market. There have been no known offers to purchase the subject property.

Type and Definition of Value
The appraisal problem is to develop an opinion of the market value of the subject property. “Market Value,” as used in this appraisal, is defined as “the most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus.”

LOYALTON RANCH PROPERTY

INTRODUCTION

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 2 Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

• Buyer and seller are typically motivated.
• Both parties are well informed or well advised, each acting in what they consider their own best interests;
• A reasonable time is allowed for exposure in the open market; • Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and
• The price represents the normal consideration for the property sold unaffected by special or creative financing or sale concessions granted by anyone associated with the sale.”1

The value conclusions apply to the value of the subject under the market conditions presumed on the effective date of value. Please refer to the Glossary in the Addenda section for additional definitions of terms used in this report.

Valuation Scenarios, Property Rights Appraised, and Effective Dates of Value Per the scope of our assignment we developed an opinion of value for the subject property under the following scenario of value:

Date of Report
The date of this report is April 14, 2022.

Assumptions and Conditions of the Appraisal
This appraisal assignment and the opinions reported herein are subject to the General Assumptions and Limiting Conditions contained in the report and the following extraordinary assumptions and/or hypothetical conditions, the use of which might have affected the assignment results.

Extraordinary Assumptions
• In terms of physical characteristics of the property, we relied on information provided by our client, along with public record information and technology platforms including google earth.

It is an extraordina ry assumption of the appraisal that the information contained herein is accurate
• Legal access is assumed to exist for each of the three main property components. It is reported that the acreage has been used for grazing of livestock, and the acreage is thus assumed to be suitable for this use.

Hypothetical Conditions
• None

1 Source: Code of Federal Regulations, Title 12, Banks and Banking, Part 722.2-Definitions Valuation Scenario Effective Date of Value
As Is Market Value of the Fee Simple Estate April 1, 2022

LOYALTON RANCH PROPERTY

SCOPE OF WORK

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 3 Scope of Work
The elements addressed in the Scope of Work are (1) the extent to which the subject property is identified, (2) the extent to which the subject is inspected, (3) the type and extent of data researched, (4) the type and extent of analysis applied, (5) the t ype of appraisal report prepared , and (6) the inclusion or exclusion of items of non-realty in the development of the value opinion. These items are discussed as below.

Extent to Which the Property Was Identified
The three components of the property identification are summarized as follows:
• Legal Characteristics - The subject was legally identified via county records and assessor plats from Lassen and Sierra County.
• Economic Characteristi cs - Economic characteristics of the subject were identified via information provided by the client, as well as a comparison to properties with similar locational and physical characteristics
• Physical Characteristics - The subject was physically identified via information provided by our client, as well as aerial photography from Google Earth, topographic maps, and other technology resources..

Extent to Which the Property Was Inspected
The property was not physically inspected by the appraiser. The subject property consists of over 10,000 acres of rural acreage, much of which has limited accessibility. Our analyses of available aerial photography and topographic maps was considered the best way to understand the physical characteristics of the property. The appraiser also has familiarity with the general area.

Type and Extent of Data Researched
We researched and analyzed: (1) market area data, (2) property-specific market data, (3) zoning and land-use data, and (4) current data on comparable listings and transactions. We also interviewed people familiar with the subject market/property type.

Type and Extent of Analysis Applied (Valuation Methodology) We observed surrounding land use trends, the condition of any improvements, demand for the subject property, and relevant legal limitations in concluding a highest and best use. We then valued the subject based on that highest and best use conclusion.

Appraisers develop an opinion of property value w ith specific appraisal procedures that reflect three distinct methods of data analysis: the Cost Approach, Sales Comparison Approach, and Income Capitalization Approach. One or more of these approaches are used in all estimations of value.

All of these approaches to value were considered. We assessed the availability of data and applicability of each approach to value within the context of the characteristics of the subject property and the needs and requirements of the client. Based on this assessment, we relied upon the Sales Comparison Approach. The Cost Approach was not used because this is an appraisal of land only and there are no improvements for which costs can be estimated and accrued depreciation quantified. The Income

LOYALTON RANCH PROPERTY

SCOPE OF WORK

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 4 Capitalization Approach was not used because this is an appraisal of land only and market participants do not employ this approach for valuing land only. Such acreage is not traded on the basis of the revenue it would generate, but rather on the sale price per acre of land area (Sal es Comparison Approach.)
Appraisal Conformity and Report Type
We developed our analyses, opinions, and conclusions and prepared this report in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP) of the Appraisal Foundation and the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute.

This is an Appraisal Report as defined by the Uniform Standards of Professional Appraisal Practice under Standards Rule 2-2a.

Personal Property/FF&E
All items of non-realty are excluded from this analysis. The opinion of market value developed herein is reflective of real estate only.

LOYALTON RANCH PROPERTY

REGIONAL AND MARKET AREA ANALYSIS

REGIONAL MAP

Overview
The subject property is located near Loyalton, California with parcels sitting in both Sierra and Lassen counties. This area is on the northern/northeastern portion of the State. Both counties border the state of Nevada in a mountainous area rich in forestry and full of wildlife. These counties have a combined population of approximately 37,000 with only roughly 700 of those people residing in Loyalton. The area was settled in the 1950s, with the City being established in 1864. Loyalton is much the same today as it was back then and even referring to itself as the “city with more animals than people.”

Note that much of the following pertains to Sierra County but would be similar for Lassen County.

Population
Sierra county has a very small population with only about 3,214 residents, and while Lassen county is larger in population, housing 32,981 residents as of 2019, both counties are still very small compared to the rest of the state.

According to the Site to Do Business projections, presented below, both Sierra and Lassen counties are expected to see a decrease in population with a change of -0.4% and -0.6% annually between 2021-2026

LOYALTON RANCH PROPERTY

REGIONAL AND MARKET AREA ANALYSIS

T ransportation
Public transportation in Sierra County is very limited. There is no fixed route transit service, but public transportation is provided by two non -profit transit services, which services both Sierra County and the City of Loyalton. These services are open to the general public but primarily specialize in the elderly and disabled population. Considering the small population and the rural nature of Sierra County, there are currently no plans to increase or add public bus services as it is not necessary or financially feasible at this time.

Air service in the area is very minimal. The Sierraville Dearwater Field Airport is the only designated airport in Sierra County, and it is classified as a Basic Utility airfield. The airport provides a link for local and regional aviation uses. The field is used for recreation, ingress and egress for regional events, Population
Estimated
Annual %
Change Projected
Annual %
Change
Area 2010 2021 2010 - 21 2026 2021 - 26
United States 308,745,538 333,793,107 0.7% 333,934,112 0.0% California 37,253,956 39,476,705 0.5% 40,507,842 0.5%
Sierra County 3,240 3,169 -0.2% 3,080 -0.6%
Lassen County 34,895 32,284 -0.3% 32,284 -0.4%
Source: ESRI (ArcGIS)

LOYALTON RANCH PROPERTY

REGIONAL AND MARKET AREA ANALYSIS

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 7 occasional charter services and emergency services. Air freight in the county is limited to occasional service by private aircraft. Residents in Sierra County typically use airports in Reno, Sacramento, and San Francisco for their commercial needs.

With such a small population, traffic congestion is not usually a problem in the City of Loyalton or the Sierra/Lassen County areas. About 64 miles of State Route 49 runs east-west through Sierra County and Loyalton. State Route 89 runs from Nevada County to the Plumas County line, crossing through about 30 miles of Sierra County. SR 89 largely carries local, commercial, and recreational traffic through undeveloped forest land with restricted access. US 395 runs through the northeastern corner of the county. A 1.6-mile- long section of I-80 passes through the southeastern corner of Sierra County.

Unemployment
The unemployment rate in Sierra County is currently less than the rates of the state and nation. The County unemployment rate was 4. 1% as of December 2021 (most recent available). The State of California was at 7.3% while the Nation was at 5.3% for the same time period.

Median Household Income
Lassen and Sierra Counties have a median household income which is quite a bit lower than that of the state and national average but is expected to grow by about 1.7-2.4 percent over the next four years. Total median household income for the region is presented in the following table. Overall, the subject compares unfavorably to the state and the country

Conclusions
Sierra County and Lassen County are well up into the Sierra Nevada and consist mostly of rural/remote acreage and small communities. With a decreasing population, aging work force and limited local training options, the pool of workers in this area is quite small and talent attraction is difficult due to lack of housing availability. Most of the housing is owner occupied with limited rental options. There is a significant amount of land that is owned by the Federal or State Government. Although Loyalt on is the biggest community within Sierra County it has been called “the loneliest town in America” Unemployment Rates
Area YE 2016 YE 2017 YE 2018 YE 2019 YE 2020 2021¹
United States 4.9% 4.4% 3.9% 3.7% 8.1% 5.3%
California 5.5% 4.8% 4.3% 4.1% 10.2% 7.3%
Sierra County, CA 7.0% 5.6% 4.8% 4.7% 7.1% 4.1%
Source: www.bls.gov data not seasonally adjusted; ¹Annual - most recent for US, others lag by 1-2 mos.) Median Household Income
Estimated Projected Annual % Change
Area 2021 2026 2021 - 26
United States $62,203 $67,325 1.6%
California $80,044 $90,664 2.5%
Sierra County $57,732 $65,063 2.4%
Lassen County $60,572 $65,927 1.7%
Source: ESRI (ArcGIS)

LOYALTON RANCH PROPERTY

REGIONAL AND MARKET AREA ANALYSIS

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 8 because visitors are few and far between. Despite the scenic views and pleasant small -town atmosphere, there is not much to attract tourism keeping the town much as it was 150 years ago:
small, quiet, and full of wildlife and natural beauty

With regard to economic conditions, the real estate market in general was several years into positive trends after a period of deep recession until the pandemic in the first quarter of 2020.

The outlook is still somewhat clouded by the unknowns associated with COVID -19. There were increasing impacts on many businesses as people continued to curb their activity, and certain industries in particular have been severely affected. While California “re-opened for business” in June 2021, mask requirements subsequently returned and vaccination mandates were announced, but these are now waning again. On March 1, 2022, the State of California requirement for unvaccinated people to mask in indoor settings was changed to a recommendation that all persons continue indoor masking, regardless of covid vaccination status.

Many market participants had been becoming more optimistic, thanks in large part to the vaccination rollouts, but the forceful return of Covid protocols in the winter of 2021-22, and both government and private sector mandates had a dampening effect. Now, as the pandemic recedes, continued supply chain issues and inflation, exacerbated no w by the war in Europe, and possible greater implications, have extended national and global concern and uncertainty, and the economy will continue to be adversely impacted.

The timeline for a return to normalcy remains unknown, but the historic reasons f or growth in the region remain the same. The timeline for a return to normalcy remains unknown, but the historic reasons for growth in the region remain the same, and thus the expectation is that normal growth will resume over time.

LOYALTON RANCH PROPERTY

SITE DESCRIPTION

GOOGLE AERIAL

LOYALTON RANCH PROPERTY

SITE DESCRIPTION

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 10 Site Description
The subject site is located in northeastern California, about 100 air miles northeast of Sacramento and 20 miles northwest of Reno. The property is east of Loyalton, and northwest of Cold Springs, Nevada.

The characteristics of the site are summarized as follows:

Site Characteristics
Summary The property consist of acreage that is remote and in a generally native state. The acreage has been used as seasonal grazeland.

Location The acreage is within Sierra County and Lassen County, CA, just east of Loyalton, CA and just west of Cold Springs, Nevada Gross Land Area: 10,273.95 Acres
Lassen County Acres 3,902.49 acres
Sierra County Acres 6,371.46 acres
Shape: Generally Rectangular
Topography:

Western Acreage:

Topography ranges from lower mildly sloping flatlands to steep sloping areas and peaks. Following is a brief description of each of the three main components of the property.

The western acreage, just east of Loyalton, is relatively flat in the western portion at about 5,000 feet elevation, extending easterly to peaks that are almost 7,500 feet high. There is somewhat of a valley that extends upward in elevation from the west to the east, sloping up also toward the north and south. There are several “jeep” trails identified on the topographic map, and one named “road” (Staverville Road) that is basically a trail.

LOYALTON RANCH PROPERTY

SITE DESCRIPTION

There are several high peaks in this portion of the property.

Notably, there are two “islands” of public land reflected in the white shaded areas in the aerial image above.

Northeastern Acreage: The northeastern acreage is southwest of the intersection of Highway 70 and the 395 Freeway, just east of Reno Junction. This is considered the main ranch area with a farmstead in the northern portion.

This acreage has a significant amount of nearly level or gently sloping acreage, sloping up to the south and southeast, as well as to the northwest. The lower area in the northeast part of this acreage is at about 5,000 feet elevation, extending southerly to just over 6,000 feet, with higher areas up to 7,000 feet to the southwest.

LOYALTON RANCH PROPERTY

SITE DESCRIPTION

There is publicly owned land adjacent to the south. One small portion of the subject is an island within this public land.

Southeastern Acreage: The southeastern component of the property is similar to the others in that it has valley areas and high peaks, but it differs from the other two property components in that it has inferior access.

As reflected in the aerial photo below, there is a portion of public land (white shaded) that extends into the subject acreage, with additional subject acreage north of that. Aside from “touching” the southern edge of the northeastern part of the property, it is not technically adjoining.

LOYALTON RANCH PROPERTY

SITE DESCRIPTION

Note in the topographic map above where the Lassen/Sierra County line crosses the property.

Utilities Electric power is believed to exist at the western edge near Loyalton, and in the northeastern part of the property near the existing farmstead. The main ranch site has a domestic well.

Access The acreage is considered remote. The property is accessible from the southwest corner where Garbage Pit Road connects with Staverville Road. Staverville Road runs W est-East through the Southern portion of the Sierra County parcels.

There is also access from the northeast, with ranch roads extending southwesterly. There is also a ranch road which appears to extend easterly from the northeast acreage to Bringman Road and the 395 freeway.

LOYALTON RANCH PROPERTY

SITE DESCRIPTION

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 14 The southeast part of the property has inferior access when compared to the other two property components. There is a trail/road which extends from the 395 freeway toward the southeastern part of this southeastern acreage, but it woul d require an offroad vehicle.

Significantly, legal access is assumed to exist for each of the three main property components. It is reported that the acreage has been used for grazing of livestock, and the acreage is thus assumed to be suitable for this use.

Drainage: Assumed adequate for intended use
Interior or Corner: Interior
Signalized Intersection: No
Flood Zone Data
Flood Map Panel/Number: 06091C0250C
Flood Map Date: 02-02-2012
Portion in Flood Hazard Area: 0.00%
Flood Zone: Zone X – not a flood zone
Other Site Conditions
Soil Type: This is remote hilly acreage at 5,000 to 7,500 feet elevation. It is rocky and typically consists of soils that would not be highly rated for productive agriculture, other than seasonal grazeland.

Environmental Issues: An environmental site assessment report was not furnished for our review. An inspection of the property did not reveal any visible or factual evidence of apparent environmental impairment to the site.

The appraisers are not considered experts in hazardous materials.

The client is advised to obtain an environmental report if further investigation is desired. In addition, a drive -by inspection of the immediate vicinity surrounding the subject did not reveal any uses or hazards that would be expected to pose an apparent risk to the site or would restrict its use.

Easements/Encroachments: None known that would adversely affect development of the site.

Earthquake Zone: The property is not located in an Alquist -Priolo Special Studies Zone for earthquake hazard. Earthquake hazard is typical for the overall area.

Zoning Designation
Zoning Jurisdiction: Sierra County and Lassen County
Zoning Classification: Sierra: GF (General Forest) and A1 (Agriculture 1) Lassen: OS (Open Space)

LOYALTON RANCH PROPERTY

SITE DESCRIPTION

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 15 General Plan Designation: Sierra: Agricultural, Forest
Lassen: Extensive Agriculture
Permitted Uses: Permitted uses are primarily agricultural in nature. Limited residential use is also allowed. The forest designation provides for the harvest of timber where there is adequate supply/access.

Analysis/Comments on Site
The subject consists of acreage in the northeast part of the state of California, just northwest of Reno, Nevada. It includes ±6,371.46 acres in Sierra County, and ±3,902.49 acres in Lassen County. There are three separate ranch components, including the ±3,582.49 acre main headquarters ranch accessible from the north, ±4,272.46 acres in the southwest portion, just east of Loyalton, and a third component east of Loyalton and south of the main headquarters ranch. This third component in the southeast is more remote with inferior access. It amounts to ±2,419 acres. The main headquarters ranch includes a farmstead, but the property is otherwise unimproved but for fencing. There are no known developed irrigation systems, the acreage is served by natural ponds and creeks, etc.

The property has historically been used for seasonal grazeland. With elevations of 5,000 to over 7,000 feet in the Sierra Nevada, snow limits grazing during winter and into the early spring.

Much of the ranch was damaged by a wildland fire that occurred in 2020. Some fencing was damaged but has since been fixed to allow for continued cattle operations. The rancher/operator stated that the property is functional, but there is additional work that could be done to repair fire damage.

LOYALTON RANCH PROPERTY

ASSESSMENT AND TAX DATA

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 16 Assessment and Tax Data
Assessment Methodology
The State of California has provided for a unified system to assess real estate for property taxes.

Assessment Districts are established on a county basis to assess real estate within the county. The appraised property falls under the taxing jurisdiction of Santa Clara County and is subject to both general taxes and direct assessments.

Assessed Values and Property T axes
The subject’s assessed values, a pplicable tax rates and total taxes including direct assessments are shown in the following table. The first 14 parcels are in Sierra County and the others are in Lassen County.

There are no tax bills for two of the subject parcels.

General Taxes
The amount of General Taxes due is quantified by multiplying the assessed value by the tax rate. In the State of California, real estate is assessed at 100% of market value as determined by the County Assessor’s Office. The tax rate consists of a base rate of 1% plus any bonds or fees approved by the voters. The County Tax Rate for the Sierra county acreage is 1.40%. The rate in Lassen County is 1.0% Tax Schedule
Parcel
Assessor's
Appraised
Assessor's
Appraised Assessed Effective Special Tax
Tax Year Number Value - Land Value - Imp. Value Tax Rate Assessments Expense 1 2021 016-070-012 $110,759 $110,759 1.040000% $72 $1,224 2 2021 016-080-007 $28,422 $28,422 1.040000% $24 $320
3 2021 016-080-008 $142,109 $142,109 1.040000% $96 $1,574 4 2021 016-090-011 $147,678 $147,678 1.040000% $96 $1,632 5 2021 016-090-059 $117,958 $117,958 1.040000% $77 $1,304 6 2021 016-100-001 $147,678 $147,678 1.040000% $96 $1,632 7 2021 016-100-004 $110,759 $110,759 1.040000% $72 $1,224 8 2021 016-100-005 $106,582 $106,582 1.040000% $26 $1,134 9 2021 016-100-006 No Data No Tax Bill
10 2021 021-010-003 $147,678 $147,678 1.040000% $1,536
11 2021 021-010-006 $26,645 $26,645 1.040000% $277
12 2021 021-010-012 $73,839 $1,281 $75,120 1.040000% $781 13 2021 021-010-013 $5,999 $5,999 1.040000% $62
14 2021 021-020-001 $128,296 $128,296 1.040000% $1,334
15 2021 147-040-002 $16,908 $16,908 1.000000% $169
16 2021 147-050-002 $23,676 $39,786 $63,462 1.000000% $635 17 147-050-030 No Data No tax Bill
18 2021 147-050-019 $13,526 $13,526 1.000000% $135
19 2021 147-050-020 $27,060 $27,060 1.000000% $271
20 2021 147-070-004 $16,476 $16,476 1.000000% $165
21 2021 147-080-001 $23,212 $23,212 1.000000% $232
22 2021 147-070-005 $13,526 $13,526 1.000000% $135
23 2021 147-080-003 $15,178 $15,178 1.000000% $152
24 2021 147-080-011 $35,875 $35,875 1.000000% $359
25 2021 147-080-014 $1,129 $1,129 1.000000% $11
26 2021 147-080-015 $8,535 $8,535 1.000000% $85
Total $1,489,503 $41,067 $1,530,570 $558 $16,583

LOYALTON RANCH PROPERTY

ASSESSMENT AND TAX DATA

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 17 Direct Assessments
Direct assessments are tax levies that are not dependent upon the assessed value of the property. They are levied regardless of assessment. According to the Santa Clara County Tax Collector’s Office, the direct assessments for the subject are as follows: $558.

Current and Future Taxes
Proposition 13 was passed by voters in June 1978 and substantially changed the taxation of real estate in California. This constitutional amendment rolled back the base year for assessment purposes to the tax year 1975-1976. Annual increases in assessed value are limited to 2 percent per year, regardless of the rate of inflation. Real estate is subject to re -appraisal to current market value upon a change in ownership or new construction. Property assessments in years subsequent to a change of ownership or new construction are referred to as factored base values.

Proposition 8, which passed in November 1978, states that the Assessor shall lower tax roll values to fair market value whenever the assessed value exceeds fair market value. It mandates that the lower of fair market value or factored base value be placed on the assessment roll. When fair market values are enrolled, the Assessor reassesses the property annually until such time as fair market value again equals or exceeds the factored base year value. For properties that have been owned for several years, the assessed value may not reflect the current fair market value. Furthermore, due to adjustments following a Prop 8 reduction, increases in assessed value can increase substantially more than 2% per year until the assessment again matches the factored base year value.

Conclusions
According to the Santa Clara County Tax Assessor the subject’s property taxes are paid as of the date of value.

LOYALTON RANCH PROPERTY

ECONOMIC OUTLOOK

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 18 Economic Outlook
While the war in Europe is foremost on everyone’s mind at this time, Covid-19 continues to impact all aspects of the economy in some way. The impact of the pandemic on commercial real estate was relatively muted in 2021. The market overall has been experiencing growth, fueled by low lending rates and inflationary pressures. Demand for investment properties was expected to increase in secondary and tertiary markets as investors look for higher yields. Inves tors and owners are also expected to continue to watch federal involvement in business loans, as government may need to intervene if inflation continues to grow. This will influence the decision of business owners to choose between buying or leasing their commercial space. Supply chain issues have the potential to impact both inflation and the ability to keep up with space demand. A shortage of supplies as well as labor is continuing to cause delays in construction across the country.

Supply for commercial space is not keeping up with demand from buyers. High net worth individuals as well as institutions are seeking real estate assets as a hedge against inflation and are taking advantage of the low interest rates while they last. Unlike past recessions, du ring the brief Covid -19 recession, there has been no shortage of capital, and this has kept several CRE sectors not just solvent, but thriving, including multi -family, certain retail properties, self -storage, healthcare and especially industrial. Office and much retail space is undergoing a shift as companies and consumers continue to adapt to both pandemic concerns as well as changes in the ability to work remote. Many companies are expected to need to offer office employees hybrid work arrangements, which not only depressed square footage demands in office but daytime retail demand nearby.

Despite the space adjustments, retail tenants are paying their rents in higher percentages since April 2020, but many retailers, especially in suburban markets, are struggling to find hourly workers, which is impacting their ability to stay open for regular business hours. Overall office trends are flat or slightly negative, as companies sort out employee policies for being in office and workers continue to opt for and insist on flexible work arrangements. The Covid -19 pandemic upended economies globally beginning in Q1 2020. Unprecedented vaccine development and manufacturing efforts, combined with mitigation strategies, helped slow the progress of the virus in many pla ces. According to the CDC as of mid-March 2022, approximately 81.5% of all persons aged five or older in the United States have received at least the first dose of a Covid-19 vaccine. While the virus is still out in the population, most who have tested positive for the Covid in late 2021/early 2022 have been infected with the Omicron variant which has mild symptoms. Mask mandates are being lifted, and most are hoping to see a return to pre-pandemic level activity later in 2022 and into 2023 for most industri es. Now there is a war in Europe and great concern about how it will impact the world economy.

Inflation is perhaps the biggest worry for CRE markets and investors. High inflation rates are being driven by both demand (stimulus, more businesses opening, h igh savings rates) and supply factors (labor shortages and supply chain disruptions). While inflation was already at the highest rate in 30 years, inflation concerns have increased dramatically now due to the Russian invasion of Ukraine.

Energy costs have increased dramatically and increases in costs of fuel and fertilizer, etc. will impact food production and transportation. Russia produces about 10% of global energy, much of which supplied Europe until just recently. On a global scale, Russia produces about 20% of wheat. Significant amounts of global corn, grains, and seeds for vegetable oil, etc. are grown in Russia and Ukraine. These supplies are now very much at risk.

LOYALTON RANCH PROPERTY

ECONOMIC OUTLOOK

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 19 The median pre-war CPI was increasing at over a 6% annual rate, which is a pace not see n since the late 80’s. As of March 2022, the rate of inflation rose to nearly 8% and is expected to increase further before improving.

Market participants had anticipated that the Fed would hike interest rates higher in 2022 and this belief reduced uncertainty around the longer path of inflation. The biggest risk is that unexpected runaway inflation would be damaging to the economy which would negatively affect property markets. This was not the expected scenario, however, but then Russia invaded Ukraine and international trade between Russia and most of the West has come to a standstill. In March 2022, The Federal Reserve raised its interest rate for the first time in three years in an effort to combat rising inflation without torpedoing economic growth. The situation has changed rapidly and continues to evolve.

LOYALTON RANCH PROPERTY

HIGHEST AND BEST USE

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 20 Highest and Best Use
The Highest and Best Use of a property is the use that is legally permissible, physically possible, and financially feasible which results in the highest value. An opinion of the highest and best use results from consideration of the criteria noted above under the market conditions or likely conditions as of the effective date of value. Determination of high est and best use results from the judgment and analytical skills of the appraiser. It represents an opinion, not a fact. In appraisal practice, the concept of highest and best use represents the premise upon which value is based.

Analysis of Highest and Best Use As Though Vacant
The primary determinants of the highest and best use of the property As Though Vacant are the issues of (1) Legal permissibility, (2) Physical possibility, (3) Financial feasibility, and (4) Maximum productivity.

Legally Permissible
The subject site is zoned General Forest, Open Space and Agriculture. The zoning controls the general nature of permissible uses but is appropriate for the location and physical elements of the subject, providing for a consistency of use with the general neighborhood. The location of the subject property is appropriate for the uses allowed, as noted previously, and a change in zoning is unlikely. There are no known easements, encroachments, covenants, or other use restrictions that would unduly limit or impede development.

Physically Possible
The physical attributes allow for a number of potential uses. Elements such as size, shape, availability of utilities, known hazards (flood, environmental, etc.), and other potential influences are described in the Site Description and have been considered. There are no items of a physical nature which would adversely impact development with the legal permitted uses. The property has historically been used or livestock grazing and recreational uses.

Financially Feasible
The probable use of the site for agricultural and recreational uses conforms to the pattern of land use in the market area. An agricultural ranch and/or recreational use is feasible and most likely. A residential use as an accessory to the agriculture use is also quite common.

Maximally Productive
Among the financially feasible uses, the use that results in the highest value (the maximally productive use) is the highest and best use. Considering these factors, the maximally productive use as though vacant is for grazing land.

Conclusion of Highest and Best Use As Though Vacant
The conclusion of the highest and best use as though vacant is for continuation of the current agricultural and recreational use.

Analysis of Highest and Best Use as Improved
In determining the highest and best use of the property as improved, the focus is on three possibilities for the property: (1) continuation of the existing use, (2) modification of the existing use, or (3) demolition and redevelopment of the land.

LOYALTON RANCH PROPERTY

HIGHEST AND BEST USE

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 21 The only improvements to the property consist of fencing and a farmstead. Retaining the improvements as they exist meets the tests for physical possibility, legal permissibility, and financial feasibility. The improvements are reportedly in average/serviceable condition and any alternative use of the existing improvements is unlikely to be economically feasible Conclusion of Highest and Best Use As Improved
The highest and best use of the subject property, as improved, is continuation of the existing agricultural and recreational use.

Most Probable Buyer
As of the date of value, the most probable buyer of the subject is an owner/user who intends to graze the acreage or use for recreational purposes.

LOYALTON RANCH PROPERTY

SALES COMPARISON APPROACH

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 22 Sales Comparison Approach
Methodology
The Sales Comparison Approach develops an indication of market value by analyzing closed sales, listings, or pending sales of properties similar to the subject, focusing on the difference between the subject and the comparables using all appropriate elements of comparison. This approach is based on principles of supply and demand, balance, externalities, and substitution, or the premise that a buyer would pay no more for a specific property that the cost of obtaining a property with the same quality, utility, and perceived benefits of ownership.

The process of developing the Sales Comparison Approach consists of the following: (1) researching and verifying transactional data, (2) selecting relevant units of comparison, (3) analyzing and adjusting the compar able sales for differences in various elements of comparison, and (4) reconciling the adjusted sales into a value indication for the subject.

Unit of Comparison
The primary unit of comparison selected depends on the appraisal problem and nature of the property.

The primary unit of comparison in the market for properties such as the subject is price paid per acre.

Elements of Comparison
Elements of comparison are the characteristics or attributes of properties and transactions that cause the prices of real estate to vary. The primary elements of comparison considered in sales comparison analysis are as follows: (1) property rights conveyed, (2) financing terms, (3) conditions of sale, (4) expenditures made immediately after purchase, (5) market conditions, ( 6) location, and (7) physical characteristics.

Comparable Sales Data
To obtain and verify comparable sales and listings of comparable properties, we conducted a search of public records, interviewed knowledgeable real estate professionals, and reviewed data from both third party and internal databases.

The sales presented in our analysis were judged to be the most comparable to develop an indication of market value for the subject property. The following is a table summarizing each sale comparable and a map illustrating the location of each in relation to the subject. Details of each comparable follow the location map.

LOYALTON RANCH PROPERTY

SALES COMPARISON APPROACH

COMPARABLE LAND SALES

Grantor Size (acres)
Sale Grantee Sale Date Struct Impr Type
No. Location Reference No. Sale Price Price/Acre Topography 1 23300 Caliente Creek Road Donna A. Douglas Et Al 3/17/2022 4,805.02 Grazing Land Caliente, Kern County The Nature Conservancy $2,500,000 Farmstead Rolling to Steep Doc#2022-42105 -$120,000 $495
$2,380,000
2 Brownell Lava Bed Road William Moore R TR 9/10/2021 1,360.00 Grazing Land Tulelake, Siskiyou County Modoc Nation $734,400 Farmstead Rolling to Steep Doc#2021-09772 $540
3 111-000 HWY 91 Weishan Family LLC 8/20/2020 2,358.00 Grazing Land Lookout, Modoc County J&J Ranch Holdings LLC $1,400,000 None Level to Gently Hilly Doc#2020-02141 $594
4 Caliente Bodfish road John & Patricia Beard 7/9/2020 5,668.17 Grazing Land Caliente, Kern County Family Trust Et Al $4,250,000 None Gently Rolling to Steeply Sloping The Nature Conservancy $750
Doc#2020-089151
5 4555 Meridian Road Diamons X Ranch LLC 10/11/2019 9,535.00 Grazing Land Vina, Tehama County Darrell & Callie family 2005 $8,500,000 Homestead Gently Rolling Revocable Trust Et Al -$500,000 $839
Doc# 2021-002096 $8,000,000 incl conservation easement
6 East of State Route 16 Pine Family Trust 9/5/2019 9,493 Grazing Land Guinda, Yolo County 360 Ranch Corp $10,000,000 Recreational Rolling to Steep Doc# 2019-030760/ -$3,000,000 $737
2019-003870 $7,000,000
7 12 Miles NE of Ravendale Roberts Trust 7/22/2016 23,500 Grazing Land Termo Lassen County Dodge Ranch LLC $9,200,000 Houses/Shops/Barns Rolling to Steep Doc# 2016-3293 -$1,800,000 $315
$7,400,000

LOYALTON RANCH PROPERTY

SALES COMPARISON APPROACH

COMPARABLE LAND SALES MAP

LOYALTON RANCH PROPERTY

SALES COMPARISON APPROACH

Property Identification
Property Name Portion of Douglas
Montgomery Ranch
Address 23300 Caliente Creek Rd.

City County State Zip Caliente, Kern County,
California
MSA Bakersfield
Tax ID 179-250-01, -12; 179-260-04, -
05; 179-270-01, -10; 179-280-
05, -07, -09, -11, -20, -21, -22, -
23; 505-010-03
VPA Property/Sale ID 11177913/1553195
Transaction Data
Sale Status Recorded
Sale Date March 17, 2022
Grantor/Seller Donna A. Douglas, et.al.

Grantee/Buyer The Nature Conservancy
Recording Number 22-42105
Property Rights Fee Simple
Financing Cash to Seller
Conditions of Sale Estate/Probate Sale
Sales Price $2,500,000
Adjusted Sales Price Indicators
Price per Gross Acre $520
Net Price per Acre $495
Verification
Confirmed By Walter D. Carney
Confirmation Source Michael Conner, The Nature
Conservancy
Confirmation Contact 7-14-2021

Property Description
Proposed Use Livestock Grazing; Land
Preservation
Gross Land Area 4,805.02 Acres
Topography Varies
Utilities None
Drainage Caliente Creek, plus others
Flood Hazard Zone Zone X
Zoning Code A Exclusive Agriculture
General Plan Extensive Agricultural

Source: Valbridge NorCal; Google Earth

LOYALTON RANCH PROPERTY

SALES COMPARISON APPROACH

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 26 Remarks
This is a 4,805-acre portion of the Douglas-Montgomery Ranch, in the Tehachapi Mountain area of eastern Kern County. Site topography is rolling to steep, and the land profile consists primarily of trees and chaparral, with scattered areas of open grassland. Elevation ranges from 1,712 feet to 5,047 feet above mean sea level . Site access is via an easement off Caliente Creek Road.

There is no developed electrical power or water onsite. Water for the cattle operation is provided by several natural springs and creeks. Property improvements consist of a homestead area with a 2,400-square foot, wood- frame barn, with animal pens; two storage sheds; corrals and loading chute. Solar panels are affixed to the barn.

Improvements are functional for the use of the property with an estimated $120,000 in contributory value.

Soils are a mix of Class VI and Class VII types, a non -productive agricultural classification. They are additionally rated as "poor" and "very poor" on the Revised California Storie Index. Because of the site topography, the property is best used for rangeland or wil dlife habitat purposes. The regional area typically receives about 14 inches of rainfall annually, with an average 46 days of rainfall per year. The wettest months are typically from November to May. The average high temperature is approximately 86.9 degrees peaking in July, and the average low temperature is 31.2 degrees set in December and January.

The property is zoned for agricultural uses. At the time of the sale, the parcels comprising the ranch were enrolled within the Williamson Act, a voluntary, ten-year agricultural land preservation contract.

LOYALTON RANCH PROPERTY

SALES COMPARISON APPROACH

Property Identification
Address Brownell Lava Bed Road
City County State Zip Tulelake, Siskiyou County,
California
Tax ID 001-080-221-000
VPA Property/Sale ID 11229367/1586205
Transaction Data
Sale Status Closed
Sale Date September 10, 2021
Grantor/Seller William Moore R TR
Grantee/Buyer Modoc Nation
Recording Number 09772
Property Rights Fee Simple
Financing Conventional
Conditions of Sale Typical
Sales Price $734,400
Adjusted Sales Price Indicators
Price per Gross Acre $540
Verification
Confirmation Source Public Record

Property Description
Gross Land Area 1,360 Acres
Topography Rolling
Utilities Assumed to be adequate
Drainage Assumed adequate
Zoning Code AG - Agriculture
General Plan Agricultural
Remarks
Rolling sagebrush and juniper rangeland near the Klamath Basin Wildlife Refuge. Property adjoins BLM and USA lands . about 2/3 of the property is almost level, the southwest 1/3 slopes up. A modest farmstead was not a factor in the price paid. Elevation is about 4,200 - 4,400 feet.

Brownell Lava Bed Road

LOYALTON RANCH PROPERTY

SALES COMPARISON APPROACH

Property Identification
Property Name Roberts Ranch
Address 111-000 HWY 91
City County State Zip Lookout, Modoc County,
California 96054
Tax ID 012-020-078, -077, 011-180-
078, -079, 011-170-015, -016,
012-010-016
VPA Property/Sale ID 11229385/1586209
Transaction Data
Sale Status Closed
Sale Date August 20, 2020
Grantor/Seller Weishan Family LLC
Grantee/Buyer J & J Ranch Holdings LLC
Recording Number 02141
Property Rights Fee Simple
Financing Conventional
Conditions of Sale Typical
Sales Price $1,400,000
Adjusted Sales Price Indicators
Price per Gross Acre $594
Verification
Confirmation Source Public Record

Property Description
Gross Land Area 2,358.00 Acres
Shape Irregular
Topography Gently sloping
Utilities Assumed to be adequate
Drainage Assumed adequate
Zoning Code AG - Agriculture
General Plan Agricultural
Remarks
Acreage is used for cattle operations, and l argely dominated by wild grass meadows, juniper, large stand s of pine, as well as sagebrush and bitterbrush. Extensive wet meadow that lies in the Roberts Reservoir drainage system. Elevation is around 4,200 feet.

111-000 HWY 91

LOYALTON RANCH PROPERTY

SALES COMPARISON APPROACH

Property Identification
Property Name Beard Family Ranch
Address Caliente Bodfish Road
City County State Zip Caliente, Kern County,
California 93518
MSA Bakersfield
Tax ID 397-210-05 and -06
VPA Property/Sale ID 11133748/1525991
Transaction Data
Sale Status Recorded
Sale Date July 9, 2020
Grantor/Seller John & Patricia Beard Family
Trust, et.al
Grantee/Buyer The Nature Conservancy
Recording Number 220089151
Property Rights Fee Simple
Financing Cash to Seller
Conditions of Sale None
Sales Price $4,250,000
Adjusted Sales Price Indicators
Price per Gross Acre $750
Verification
Confirmed By Walter D. Carney
Confirmation Source Public Records (Grant Deed);
Marketing Brochure; File
Material

Property Description
Proposed Use Livestock grazing;
conservation; preservation
Gross Land Area 5,668.17 Acres
Topography Varies
Utilities Wells
Drainage Caliente and Tehachapi
Creeks
Zoning Code A Exclusive Agriculture
General Plan 8.3, Extensive Agriculture
(Min. 20 Acre Parcel Size)

Source: Valbridge NorCal; Google Earth

LOYALTON RANCH PROPERTY

SALES COMPARISON APPROACH

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 30 Remarks
The Beard Family Ranch consists of 5,668.17 acres of gently rolling to steeply sloping livestock grazing and recreational hunting ranch in eastern Kern County, approximately 30 miles from Bakersfield. A majority of the ranch is steep, with elevations ranging from 1,420 feet to 4,210 feet above mean sea level. There are two points of access to the ranch via Caliente Bodfish Road - at Caliente Creek Road, on the east side of the property, and off Highway 58, near the southwest portion. Caliente Bodfish Road, a paved, two -lane road, runs through the entire expanse of the property; interior ranch roads provide additional site circulation.

Historic and current use of the ranch is for livestock grazing. Water is provided by one well, five natural springs, and from Caliente Creek and Tehachapi Creek. The well is located at the southwestern portion of the ranch, and the springs are located throughout the property. Water is distributed by truck to holding troughs. Improvements include two sets of corrals, a loading chute, cattle scale, and perimeter fencing.

Soils are mostly a mix of “fair” a nd “poor” rated farmlands, according to the California Revised Storie Index.

About 7% of the property is comprised of “very good” rated soils. The soils and topography are overall well - suited to livestock grazing. The mean annual temperature is between 54º F. to 64º F. The mean annual precipitation is between 9 to 16 inches.

The ranch was acquired by The Nature Conservancy. Assigned land uses are for agricultural use, and the entire ranch was enrolled within the "Williamson Act" at the time of sale. The p roperty was marketed for sale at $4,900,000, and the offering consisted of 5,520.69 acres, or $888 per acre. Subsequent to the parties entering into a purchase contract, an additional 147.48 -acre parcel was included. The purchase price was $4,250,000, or $750 per acre, for the total 5,668.17 acres. Terms of the sale are assumed to be all-cash to seller.

LOYALTON RANCH PROPERTY

SALES COMPARISON APPROACH

Property Identification
Property Name Diamond X Ranch
Address 4555 Meridian Road
City County State Zip Vina, Tehama County,
California
Tax ID 079-030-002, et.al.

VPA Property/Sale ID 11131992/1524785
Transaction Data
Sale Status Recorded
Sale Date October 11, 2019
Grantor/Seller Diamond X Ranch, LLC
Grantee/Buyer Darrell & Callie Family 2005
Revocable Trust, et.al.

Recording Number 2021-002096
Property Rights Encumbered Interest
Financing Cash to Seller
Conditions of Sale Purchased by tenant
Sales Price $8,500,000
Adjusted Sales Price Indicators
Price per Gross Acre $891
Net Price per Acre $839
Verification
Confirmed By Neil Shah
Confirmation Source Todd Renfrew
Confirmation Contact (707) 455-4444

Property Description
Proposed Use Livestock Grazing
Gross Land Area 9,535.00 Acres
Topography Varies
Drainage Brush, Singer, Rattlesnake,
and Deer Creeks
Zoning Code AG-1

Source: Valbridge NorCal; Google Earth

LOYALTON RANCH PROPERTY

SALES COMPARISON APPROACH

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 32 Remarks
Diamond X Ranch, a 9,535 -acre livestock grazing and recreational ranch at the southern portion of Tehama County, east of the town of Vina and approximately 20 miles from the town of Chico, along the east side of Highway 99. The property additionally has fr ontages along Lassen Road, at its southern border, and Meridian Road, at its eastern perimeter. Overall site topography is gently rolling, with an elevation range from 225 feet to 406 feet above mean sea level. Several creeks traverse the ranch, including Brush, Singer, Rattlesnake, and Deer Creeks. The entire property is perimeter -fenced and cross -fenced, dividing the ranch into eight separate pastures. Historic and current use of the ranch is for livestock grazing.

Available water is plentiful, with sources including five reservoirs, seasonal creeks, and a dedicated right to draw water from Deer Creek (in the fall). Recreational opportunities include fishing and duck hunting.

Soils are mostly a mix of “poor” and “very poor” rated farmlands, according to the California Revised Storie Index.

Less than 5% of the property is comprised of “excellent” and “very good” rated soils. The soils and topography are overall well-suited to livestock grazing. The mean annual temperature is between 46º F. to 63º F. The me an annual precipitation is between 25 to 33 inches.

Homestead improvements include a two-bedroom, 2,300-square foot main residence with an office area and a detached guest room, a bunk house, three recreational vehicle hook -ups, and a large fishpond. The main residence is equipped with solar panels. Two wells provided water to the homestead area, including one for the fishpond. Condition of the improvements were good, per the listing agent. Contributory value of the ranch improvements was estimated by the confirming source to be $500,000, or about 0.6% of the total ranch value.

At the time of the sale, the property was enrolled in the "Williamson Act," a voluntary ten -year agricultural preservation contract. In addition, the ranch sold encumbered with a c onservation easement (held in trust by The Nature Conservancy). The easement has been in place since November 2000 and is intended to "preserve, protect, enhance, and restore in perpetuity the Conservation Values of the property...including vernal pools, grasslands, and open space." Permitted uses include livestock grazing (limited to a "November to May" seasonal use), passive recreational uses, maintenance of existing improvements, maintenance, and development of water resources (for grazing uses only). Si te development is restricted to a five -acre home area, and a five -acre community area. Subdivision of the property is restricted.

The property was purchased by a tenant who had been using the ranch for grazing uses. Purchase price was $8,500,000. As stat ed, contributory value of the improvements is $500,000; the land only purchase price is $8,000,000, or approximately $839 per acre. The impact of the conservation easement was estimated by the listing agent to be 20% to 30%. Estimating the conservation eas ement at 25% indicated the equivalent unencumbered fee simple land rangeland value is $10,067,000 or $1,056 per acre.

The parties entered into an option agreement in October 2019; the agreement was recorded with the County of Tehama Recorder's Office in January 2020. Close of escrow was February 2021. Terms of the sale were all -cash to the seller.

LOYALTON RANCH PROPERTY

SALES COMPARISON APPROACH

Property Identification
Property Name Pine Ranch
Address East of State Route 16
City County State Zip Guinda, Yolo County, California
Tax ID 059-010-007, et.al.

VPA Property/Sale ID 11132408/1525049
Transaction Data
Sale Status Recorded
Sale Date September 5, 2019
Grantor/Seller Pine Family Trust
Grantee/Buyer 360 Ranch Corp
Recording Number 2019-030760 (Yolo); 2019-
003870 (Colusa)
Property Rights Fee Simple
Financing Cash to Seller
Conditions of Sale None
Sales Price $10,000,000
Adjusted Sales Price Indicators
Price per Gross Acre $1,053
Net Price per Acre $737
Verification
Confirmed By Neil Shah
Confirmation Source Todd Renfrew
Confirmation Contact (707) 455-4444

Property Description
Proposed Use Livestock grazing; recreation;
investment
Gross Land Area 9,493.45 Acres
Zoning Code A-X Agricultural Extensive

Source: Valbridge NorCal; Google Earth

LOYALTON RANCH PROPERTY

SALES COMPARISON APPROACH

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 34 Remarks
Pine Ranch is a 9,493.45 -acre livestock grazing and recreational ranch situated in the foothills of the Capay Valley, in Yolo and Colusa Counties, approximately a one -hour drive from Sacramento and a two -hour drive from San Francisco. Most of the property is in the northern portion of Yolo County; approximately 297.5 acres are in Colusa County. Access is circuitous with a “rough drive” for approximately four miles. Overall site topography is rolling-to-steep, with an elevation range between 600 feet to 1,700 feet above mean sea level.

Vegetation consists of grasslands, and brush and scrubs, with the best land located at the headquarters area.

Historic and current use has been livestock grazing, along with recreational hunting and fishing. Water is provided by seasonal creeks, holding ponds, and seasonal springs.

Soils are mostly a mix of “poor” rated farmlands, according to the California Revised Storie Index. Less than 2% of the property is comprised of “fair” rated soils. The soils and topography are over all well-suited to livestock grazing. The mean annual temperature is between 45º F. to 64º F. The mean annual precipitation is between 12 to 35 inches.

Property improvements are high -quality and are substantial. The 720 -acre headquarters area improvement s include a five -bedroom, 7,000 -square foot main residence with attached four -car garage and private lake stocked with bass, bluegill, and catfish; a 4,000-square foot lodge with three bedrooms, a large gathering room, and an extensive kitchen area; a resort-quality swimming pool; large-sized entertainment deck equipped with a barbeque large enough to roast a steer; a roping and cutting arena; covered riding arena; and a six -stall barn, with a tack room and a four -car garage. Electrical power was brought in eight miles to the property. The contributory value of the improvements, which were high-quality and in excellent condition, per the confirming source (who represented both buyer and seller in the transaction) was about $3,000,000.

The ranch was assemble d and improved by the sellers (Bay Area investors/owner -users) over a twenty -year period. Amenities include expansive, panoramic views, as well as passive and active recreational uses (hunting, fishing, canoeing, horse riding, off-road vehicle use).

LOYALTON RANCH PROPERTY

SALES COMPARISON APPROACH

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 35 LAND COMPARABLE 7
Property Identification
Property Name Dodge Ranch
Address 12 miles NE of Ravendale
City County State Zip Termo, Lassen County,
California 96132
Tax ID 023-100-006 et al
VPA Property/Sale ID 11229405/1586223
Transaction Data
Sale Status Closed
Sale Date July 22, 2016
Grantor/Seller Roberts trust
Grantee/Buyer Dodge Ranch LLc
Recording Number 2016-3293
Property Rights Fee Simple
Financing Conventional
Conditions of Sale Typical
Sales Price $9,200,000
Adjusted Sales Price Indicators
Price per Gross Acre $391
Net Price per Gross Ac $315
Verification
Confirmation Source MLS, public records

Property Description
Gross Land Area 23,500.00 Acres
Remarks
This is the sale of Dodge Ranch near Ravendale. The ownership totaled 23,500 acres in 27 nearby but non-contiguous parcels that are connected by BLM acreage. The acreage is at 5,000 to 6,000 feet in elevation making it similar to the subject in this regard. The property is improved with three dwellings, one bunkhouse, a shop, haybarn, along with livestock corrals and working facilities. The improvements were reported at $200,000. Farm equipment was included in the sale which was valued at $1,600,000.

The property had been used for hay production. Net of improvements, the sale price was $315 per acre.

LOYALTON RANCH PROPERTY

LAND VALUATION

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 36 Sales Comparison Analysis
When necessary, adjustments were made for differences in various elements of comparison, including property rights conveyed, financing terms, conditions of sale, expenditures made immediately after purchase, market conditions, location, and other physical characteristics. If the element in comparison is considered superior to that of the subject, we applied a negative adjustment. Conversely, a positive adjustment to the comparable was applied if inferior. A summary of the elements of comparison follows.

T ransaction Adjustments
These items are applied prior to the application of market conditions and property adjustments.

Transaction adjustments include: Real Property Rights Conveyed, Financing Terms, Conditions of Sale, and Expenditures made immediately after purchase.

Sale 5 sold with a conservation easement which impairs value, but the sale requires downward overall adjustment due to its location with superior accessibility.

Market Conditions Adjustment
Market conditions change over time as a result of inflation, deflation, fluctuations in supply and demand and other factors. The sales are arranged in descending order by sale date. The comparables are considered to represent generally recent sale transactions, relatively near the date of value.

Furthermore, the market for this type of property has been relatively level, with a slight upward trend.

Overall, while no formal adjustment is applied, we have considered the improving general economic trends in our reconciliation.

Property Adjustments
Property adjustments are based on locational and physical characteristics and are applied after the application of transaction and market conditions adjustments. We have summarized our adjustment analyses below. The pertinent elements of comparison and adjustments, if warranted, are based on our market research, best judgment, and experience in the appraisal of similar properties.

We have considered location with regard to proximity to linkages and accessibility. We have also considered the differences in topography, water improvements and structures, and magnitude. Severe topography limits productivity. Water and structural improvements are a factor in value enhancement, and there is a recognized relationship between size and price. Larger magnitude sales will almost universally sell for less per unit of measure than smaller m agnitude sales, although this factor can sometimes be offset to some extent by other elements of comparison.

The valuation analyses are summarized in the following ranking array. The sales are arranged in descending order by sale price per acre. In such an array, the indicated value for the subject is shown on the following page below those which require downward adjustment, and above those which require upward adjustment.

LOYALTON RANCH PROPERTY

LAND VALUATION

RANKING ARRAY

Reconciliation and Conclusion
The sales reflect range of $315 to $839 per acre. Magnitude of sale, elevation and proximity to urban areas are all significant factors in the analysis. A reasonable value for the subject will be toward the lower end of the reflected range.

Sale 7 is the lowest indicator and is lea st recent, but it constitutes a large ranch sale at a similar elevation. A reasonable value for the subject would be higher than the indication from Sale 7 due to upward adjustment for its larger magnitude along with an upward adjustment for improved marke t conditions. All of the other sales require downward overall adjustment.

Sales 2, 3 and 7 are most similar for location in northeast California. These three sales reflect a range from $315 to $594 per acre. Sales 2 and 3 are significantly smaller and dow nward adjustment is required for this factor.

Overall, a value of $425 per acre is concluded.

Sales Comparison Approach Conclusion
Overall, we have concluded that the value of the subject property, as of the effective date of value of April 1, 2022, can be calculated on the basis of $425 per acre. This figure results in a value indication of $4,370,000.

No. Location Sale Date Size (Acres) Elevation Price/Acre Comment 5 Diamond X Ranch Oct-19 9,535.00 225'-400' $839 Significant downward adjustments for location and lower elevation outweighs all other factors.
4 Beard Family Ranch Jul-20 5,668.17 1,400'-4,200' $750 Downward adjustments for smaller magnitude, lower elevation and superior location attributes
6 Pine Ranch Sep-19 9,493.45 600'-1,700' $737 Significant downward adjustment for lower elevation and location.
3 Roberts Ranch Aug-20 2,358.00 4,200' $594 Downward adjustment for smaller magnitude 2 Brownell Lava Bed
Road Sep-21 1,360.00 4,200'-4,400' $540 Downward adjustment for smaller magnitude 1 Portion of Douglas
Montgomery Ranch Mar-22 4,805.02 1,700'-5,000' $495 Downward adjustment for smaller magnitude, lower elevation and superior location attributes
Subject Loyalton Ranch Apr-22 10,273.95 5,000'-7,000' $425 Three acreage components of 4,272, 3,582 and 2,419
acres with the larger portions having access from a
public road, and the third being very remote and
accessible only via easement.
7 Dodge Ranch Jul-16 23,500.00 5,000'-6,000' $315 Upward adjustment for greater magnitude and slight upward adjustment for improved market conditions.

Total Acres 10,273.95
Value per Acre $425
Value Indication via Sales Comparison Approach $4,366,429 rounded $4,370,000
Value Indication via Sales Comparison Approach

LOYALTON RANCH PROPERTY

RECONCILIATION

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 38 Reconciliation
Only one approach to value was considered applicable, therefore, no formal reconciliation is required.

The indicated value from the applicable approach and our concluded market value for the subject property are summarized in the following table.

The acceptance of this appraisal assignment and the completion of the appraisal report submitted herewith are subject to the General Assumptions and Limiting Conditions contained in the report. Our findings and conclusions are further contingent upon the following extraordinary assumptions and/or hypothetical conditions which might have affected the assignment results:

It is an extraordinary assumption of the appraisal that the information contained herein is accurate
• Legal access is assumed to exist for each of the three main property components. It is reported that the acreage has been used for grazing of livestock, and the acreage is thus assumed to be suitable for this use.

Hypothetical Conditions:
• None
Exposure Time and Marketing Period
Based on statistical information about days on market, escrow length, and marketing times gathered through national investor surveys, sales verification, and interviews of market participants, similar marketing and exposure time estimates of four to six months are considered reasonable and appropriate for the subject property..

Approach to Value As Is
Sales Comparison $4,370,000
Cost Not Applicable
Income Capitalization Not Applicable
Component As Is
Value Type Market Value
Property Rights Appraised Fee Simple Estate
Effective Date of Value April 1, 2022
Value Conclusion $4,370,000
$425 per acre
Value Indications
Value Conclusion

LOYALTON RANCH PROPERTY

GENERAL ASSUMPTIONS & LIMITING CONDITIONS

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 39 General Assumptions and Limiting Conditions
This appraisal is subject to the following general assumptions and limiting conditions:

1. The legal description – if furnished to us – is assumed to be correct.

2. No responsibility is assumed for legal matters, questions of survey or title, soil or subsoil conditions, engineering, availability or capacity of utilities, or other similar technical matters. The appraisal does not constitute a survey of the property appraised. All existing liens and encumbrances have been disregarded and the property is appraised as though free and clear, under responsible ownership and competent management unless otherwise noted.

3. Unless otherwise noted, the appraisal will value the property as though free of contamination.

Valbridge Property Advisors | Northern Californi a will conduct no hazardous materials or contamination inspection of any kind. It is recommended that the client hire an expert if the presence of hazardous materials or contamination poses any concern.

4. The stamps and/or consideration placed on deeds used to indicate sales are in correct relationship to the actual dollar amount of the transaction.

5. Unless otherwise noted, it is assumed there are no encroachments, zoning violations or restrictions existing in the subject property.

6. The appraiser is not require d to give testimony or attendance in court by reason of this appraisal unless previous arrangements have been made.

7. Unless expressly specified in the engagement letter, the fee for this appraisal does not include the attendance or giving of testimony by A ppraiser at any court, regulatory or other proceedings, or any conferences or other work in preparation for such proceeding. If any partner or employee of Valbridge Property Advisors | Northern California is asked or required to appear and/or testify at any deposition, trial, or other proceeding about the preparation, conclusions or any other aspect of this assignment, client shall compensate Appraiser for the time spent by the partner or employee in appearing and/or testifying and in preparing to testify according to the Appraiser’s then current hourly rate plus reimbursement of expenses.

8. The values for land and/or improvements, as contained in this report, are constituent parts of the total value reported and neither is (or are) to be used in making a sum mation appraisal of a combination of values created by another appraiser. Either is invalidated if so used.

9. The dates of value to which the opinions expressed in this report apply are set forth in this report.

We assume no responsibility for economic or p hysical factors occurring at some point at a later date, which may affect the opinions stated herein. The forecasts, projections, or operating estimates contained herein are based on current market conditions and anticipated short -term supply and demand factors and are subject to change with future conditions. Appraiser is not responsible for determining whether the date of value requested by Client is appropriate for Client’s intended use.

10. The sketches, maps, plats, and exhibits in this report are included to assist the reader in visualizing the property. The appraiser has made no survey of the property and assumed no responsibility in connection with such matters.

11. The information, estimates and opinions, which were obtained from sources outside of this offi ce, are considered reliable. However, no liability for them can be assumed by the appraiser.

LOYALTON RANCH PROPERTY

GENERAL ASSUMPTIONS & LIMITING CONDITIONS

12. Possession of this report, or a copy thereof, does not carry with it the right of publication. Neither all, nor any part of the content of the report, or copy ther eof (including conclusions as to property value, the identity of the appraisers, professional designations, reference to any professional appraisal organization or the firm with which the appraisers are connected), shall be disseminated to the public through advertising, public relations, news, sales, or other media without prior written consent and approval.

13. No claim is intended to be expressed for matters of expertise that would require specialized investigation or knowledge beyond that ordinarily employed by real estate appraisers. We claim no expertise in areas such as, but not limited to, legal, survey, structural, environmental, pest control, mechanical, etc.

14. This appraisal was prepared for the sole and exclusive use of the client for the function ou tlined herein. Any party who is not the client or intended user identified in the appraisal or engagement letter is not entitled to rely upon the contents of the appraisal without express written consent of Valbridge Property Advisors | Northern California and Client. The Client shall not include partners, affiliates, or relatives of the party addressed herein. The appraiser assumes no obligation, liability, or accountability to any third party.

15. Distribution of this report is at the sole discretion of the c lient, but third -parties not listed as an intended user on the face of the appraisal, or the engagement letter may not rely upon the contents of the appraisal. In no event shall client give a third-party a partial copy of the appraisal report. We will make no distribution of the report without the specific direction of the client.

16. This appraisal shall be used only for the function outlined herein, unless expressly authorized by Valbridge Property Advisors | Northern California.

17. This appraisal shall be considered in its entirety. No part thereof shall be used separately or out of context.

18. Unless otherwise noted in the body of this report, this appraisal assumes that the subject property does not fall within the areas where mandatory flood insurance is effective. Unless otherwise noted, we have not completed, nor have we contracted to have completed an investigation to identify and/or quantify the presence of non-tidal wetland conditions on the subject property. Because the appraiser is not a surveyor, he or sh e makes no guarantees, express or implied, regarding this determination.

19. The flood maps are not site specific. We are not qualified to confirm the location of the subject property in relation to flood hazard areas based on the FEMA Flood Insurance Rate Maps or other surveying techniques. It is recommended that the client obtain a confirmation of the subject property’s flood zone classification from a licensed surveyor.

20. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures which would render it more or less valuable. No responsibility is assumed for such conditions or for engineering which may be required to discover them.

21. Our inspection included an observation of the land and improvements t hereon only. It was not possible to observe conditions beneath the soil or hidden structural components within the improvements. We inspected the buildings involved, and reported damage (if any) by termites, dry rot, wet rot, or other infestations as a mat ter of information, and no guarantee of the amount or degree of damage (if any) is implied. Condition of heating, cooling, ventilation, electrical and plumbing equipment is considered to be commensurate with the condition of the balance of the improvements unless otherwise stated. Should the client have concerns in these areas, it is the client’s responsibility to order the appropriate inspections. The appraiser does not have the skill or expertise to make such inspections and assumes no responsibility for these items.

LOYALTON RANCH PROPERTY

GENERAL ASSUMPTIONS & LIMITING CONDITIONS

22. This appraisal does not guarantee compliance with building code and life safety code requirements of the local jurisdiction. It is assumed that all required licenses, consents, certificates of occupancy or other legislative or administrative a uthority from any local, state, or national governmental or private entity or organization have been or can be obtained or renewed for any use on which the value conclusion contained in this report is based unless specifically stated to the contrary.

23. When p ossible, we have relied upon building measurements provided by the client, owner, or associated agents of these parties. In the absence of a detailed rent roll, reliable public records, or “as-built” plans provided to us, we have relied upon our own measur ements of the subject improvements. We follow typical appraisal industry methods; however, we recognize that some factors may limit our ability to obtain accurate measurements including, but not limited to, property access on the day of inspection, basemen ts, fenced/gated areas, grade elevations, greenery/shrubbery, uneven surfaces, multiple story structures, obtuse or acute wall angles, immobile obstructions, etc. Professional building area measurements of the quality, level of detail, or accuracy of profe ssional measurement services are beyond the scope of this appraisal assignment.

24. We have attempted to reconcile sources of data discovered or provided during the appraisal process, including assessment department data. Ultimately, the measurements that are deemed by us to be the most accurate and/or reliable are used within this report. While the measurements and any accompanying sketches are considered to be reasonably accurate and reliable, we cannot guarantee their accuracy. Should the client desire more precise measurement, they are urged to retain the measurement services of a qualified professional (space planner, architect or building engineer) as an alternative source. If this alternative measurement source reflects or reveals substantial differences with the measurements used within the report, upon request of the client, the appraiser will submit a revised report for an additional fee.

25. In the absence of being provided with a detailed land survey, we have used assessment department data to ascertain the physical dimensions and acreage of the property. Should a survey prove this information to be inaccurate, upon request of the client, the appraiser will submit a revised report for an additional fee.

26. If only preliminary plans and specifications were available for use in the preparation of this appraisal, and a review of the final plans and specifications reveals substantial differences upon request of the client the appraiser will submit a revised report for an additional fee.

27. Unless otherwise stated in this report, the value conclusion is predicated on the assumption that the property is free of contamination, environmental impairment, or hazardous materials. Unless otherwise stated, the existence of hazardous material was not observed by the appraiser a nd the appraiser has no knowledge of the existence of such materials on or in the property. The appraiser, however, is not qualified to detect such substances. The presence of substances such as asbestos, urea-formaldehyde foam insulation or other potentia lly hazardous materials may affect the value of the property. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required for discovery. The client is urged to retain an expert in this field, if desired.

28. The Americans with Disabilities Act (“ADA”) became effective January 26, 1992. We have not made a specific compliance survey of the property to determine if it is in conformity with the various requirements of the ADA. It is possible that a compliance survey of the property, together with an analysis of the requirements of the ADA, could reveal that the property is not in compliance with one or more of the requirements of the Act. If so, this could have a negative effect on the value of the property. Since we have no direct evidence relating to this issue, we did not consider possible noncompliance with the requirements of ADA in developing an opinion of value.

LOYALTON RANCH PROPERTY

GENERAL ASSUMPTIONS & LIMITING CONDITIONS

29. This appraisal applies to the land and building improvements only. The value of trade fixtures, furnishings, and other equipment, or subsurface rights (minerals, gas, and oil) were not considered in this appraisal unless specifically stated to the contrary.

30. No changes in any federal, state, or local laws, regulations, or codes (including, without limitatio n, the Internal Revenue Code) are anticipated, unless specifically stated to the contrary.

31. The data gathered in the course of this assignment (except data furnished by the Client) shall remain the property of the Appraiser. The appraiser will not violate the confidential nature of the appraiser- client relationship by improperly disclosing any confidential information furnished to the appraiser.

Notwithstanding the foregoing, the Appraiser is authorized by the client to disclose all or any portion of the appraisal and related appraisal data to appropriate representatives of the Appraisal Institute if such disclosure is required to enable the appraiser to comply with the Bylaws and Regulations of such Institute now or hereafter in effect.

32. You and Valbridge Property Advisors | Northern California both agree that any dispute over matters in excess of $5,000 will be submitted for resolution by arbitration. This includes fee disputes and any claim of malpractice. The arbitrator shall be mutually selected. If Valbridge Property Advisors | Northern California and the client cannot agree on the arbitrator, the presiding head of the Local County Mediation & Arbitration panel shall select the arbitrator. Such arbitration shall be binding and final. In agreeing to arbitration, we both acknowledge that, by agreeing to binding arbitration, each of us is giving up the right to have the dispute decided in a court of law before a judge or jury.

In the event that the client, or any other party, makes a claim against Valbridge Property Advisors | Northern California or any of its employees in connections with or in an y way relating to this assignment, the maximum damages recoverable by such claimant shall be the amount actually received by Valbridge Property Advisors | Northern California for this assignment, and under no circumstances shall any claim for consequential damages be made.

33. Valbridge Property Advisors | Northern California shall have no obligation, liability, or accountability to any third party. Any party who is not the “client” or intended user identified on the face of the appraisal or in the engagement l etter is not entitled to rely upon the contents of the appraisal without the express written consent of Valbridge Property Advisors | Northern California. “Client” shall not include partners, affiliates, or relatives of the party named in the engagement letter. Client shall hold Valbridge Property Advisors | Northern California and its employees harmless in the event of any lawsuit brought by any third party, lender, partner, or part -owner in any form of ownership or any other party as a result of this assignment. The client also agrees that in case of lawsuit arising from or in any way involving these appraisal services, client will hold Valbridge Property Advisors | Northern California harmless from and against any liability, loss, cost, or expense incurre d or suffered by Valbridge Property Advisors | Northern California in such action, regardless of its outcome.

34. The Valbridge Property Advisors office responsible for the preparation of this report is independently owned and operated by Valbridge Property Ad visors | Hulberg & Associates, Inc .

Neither Valbridge Property Advisors, Inc., nor any of its affiliates has been engaged to provide this report. Valbridge Property Advisors, Inc. does not provide valuation services, and has taken no part in the preparation of this report.

35. If any claim is filed against any of Valbridge Property Advisors, Inc., a Florida Corporation, its affiliates, officers or employees, or the firm providing this report, in connection with, or in any way arising out of, or relating to, thi s report, or the engagement of the firm providing this report, then (1) under no circumstances shall such claimant be entitled to consequential, special or other damages, except only for direct compensatory damages, and (2) the maximum amount of such compensatory damages recoverable by such claimant shall be the amount actually received by the firm engaged to provide this report.

LOYALTON RANCH PROPERTY

GENERAL ASSUMPTIONS & LIMITING CONDITIONS

36. This report and any associated work files may be subject to evaluation by Valbridge Property Advisors, Inc., or its affiliates, for quality control purposes.

37. Acceptance and/or use of this appraisal report constitutes acceptance of the foregoing general assumptions and limiting conditions.

38. The global outbr eak of a "novel coronavirus" (known as COVID -19) was officially declared a pandemic by the World Health Organization (WHO). It is currently unknown what full effect this event may have on the national economy, the local economy, or the market in which the s ubject property is located. The reader is cautioned and reminded that the conclusions presented in this appraisal report apply only as of the effective date(s) indicated. The appraiser makes no representation as to the effect on the subject property of th is event, or any event, subsequent to the effective date of the appraisal.

LOYALTON RANCH PROPERTY

CERTIFICATION

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 44 Certification – John A. Hillas, MAI, SRA
I certify that, to the best of my knowledge and belief:

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

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

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

4. The undersigned has performed services as an appraiser regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment.

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

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

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

8. My analyses, opinions and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.

9. John A. Hillas has not personally inspected the subject property.

10. No one provided significant real property appraisal assistance to the person signing this certification.

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

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

13. As of the date of this report, the undersigned has completed the continuing education program for Designated Members of the Appraisal Institute.

John A. Hillas, MAI, SRA
Managing Director
California Certified License #AG002432

LOYALTON RANCH PROPERTY

ADDENDA

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 45 Addenda
Glossary
Qualifications
• John A. Hillas, MAI, SRA - Managing Director
Information on Valbridge Property Advisors
Office Locations

LOYALTON RANCH PROPERTY

ADDENDA

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 46 Glossary
Definitions are taken from The Dictionary of Real Estate Appraisal, 6 th Edition (Dictionary), the Uniform Standards of Professional Appraisal Practice (USPAP) and Building Owners and Managers Association International (BOMA).

Absolute Net Lease
A lease in which the tenant pays all expenses including structural m aintenance, building reserves, and
management, often a long-term lease to a credit tenant. (Dictionary)
Amortization
The process of retiring a debt or recovering a capital
investment, typically through scheduled, systematic
repayment of the principal; a program of periodic
contributions to a sinking fund or debt retirement fund. (Dictionary)
As Is Market Value
The estimate of the market value of real property in its current physical condition, use, and zoning as of the
appraisal date. (Dictionary)
Base Rent
The minimum rent stipulated in a lease. (Dictionary)
Base Year
The year on which escalation clauses in a lease are based. (Dictionary)
Building Common Area
In office buildings, the areas of the building that provide services to building tenants but which are not included in the office area or store area of any specific tenant. These areas may include, but shall not be limited to, main and auxiliary lobbies, atrium spaces at the level of the finished floor, concierge areas or security desks, conference
rooms, lounges or vending areas, food service facilities, health or fitness centers, daycare facilities, locker or shower facilities, mail rooms, fire control rooms, fully enclosed courtyards outside the exterior walls, and
building core and ser vice areas such as fully enclosed mechanical or equipment rooms. Specifically excluded
from building common area are floor common areas,
parking space, portions of loading docks outside the
building line, and major vertical penetrations. (BOMA)
Building Rentable Area
The sum of all floor rentable areas. Floor rentable area is the result of subtracting from the gross measured area of a floor the major vertical penetrations on that same floor.

It is generally fixed for the life of the building and is rarely affected by changes in corridor size or configuration.
(BOMA)
Bulk Value
The value of multiple units, subdivided plots, or
properties in a portfolio as though sold together in a
single transaction.

Certificate of Occupancy (COO)
A formal written acknowledgment by an appropriate unit
of local government that a new construction or
renovation project is at the stage where it meets
applicable health and safety codes and is ready for
commercial or residential occupancy. (Dictionary)
Common Area Maintenance (CAM)
The expense of operating and maintaining common
areas; may or may not include management charges and
usually does not include capital expenditures on tenant improvements or other improvements to the property.
(Dictionary)

The amount of money charged to tenants for their shares of maintaining a [shopping] center’s common area. The
charge that a tenant pays for shared services and facilities such as electricity, security, and maintenance of parking lots. Items charged to common area maintenance may
include cleaning services, parking lot sweeping and
maintenance, snow removal, security and upkeep. (ICSC – International Council of Shopping Centers, 4th Ed.)
Condominium
A multiunit structure, or a unit within such a structure, with a condominium form of ownership. (Dictionary)
Conservation Easement
An interest in real estate restricting future land use to preservation, conservation, wildlife habitat, or some
combination of those uses. A conservation easement may
permit farming, timber harvesting, or other uses of a rural nature as well as some types of conservation -oriented
development to continue, subject to the easement.
(Dictionary)
Contributory Value
A type of value that reflects the amount a property or
component of a property contributes to the value of
another asset or to the property as a whole.

The change in the value of a property as a whole, whether positive or negative, resulting from the addition or
deletion of a property component. Also called deprival
value in some countries. (Dictionary)

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ADDENDA

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 47 Debt Coverage Ratio (DCR)
The ratio of net operating income to annual debt service (DCR = NOI/Im), which measures the relative ability of a property to meet its debt service out of net operating
income; also called debt service coverage ratio (DSCR). A larger DCR typically indicates a greater ability for a
property to withstand a reduction of income, providing
an improved safety margin for a lender. (Dictionary)
Deed Restriction
A provision written into a deed that limits the use of land.

Deed restrictions usua lly remain in effect when title
passes to subsequent owners. (Dictionary)
Depreciation
In appraisal, a loss in property value from any cause; the difference between the cost of an improvement on the
effective date of the appraisal and the market value of the improvement on the same date.

In accounting, an allocation of the original cost of an asset, amortizing the cost over the asset’s life; calculated using a variety of standard techniques. (Dictionary)
Disposition Value
The most probable price that a sp ecified interest in
property should bring under the following conditions:
• Consummation of a sale within a specified time, which is shorter than the typical exposure time for such a
property in that market.
• The property is subjected to market conditions
prevailing as of the date of valuation;
• Both the buyer and seller are acting prudently and
knowledgeably;
• The seller is under compulsion to sell;
• The buyer is typically motivated;
• Both parties are acting in what they consider to be
their best interests;
• An adequate marketing effort will be made during the
exposure time;
• Payment will be made in cash in U.S. dollars (or the
local currency) or in terms of financial arrangements
comparable thereto; and
• The price represents the normal consideration for the property sold, unaffected by special or creative
financing or sales concessions granted by anyone
associated with the sale. (Dictionary)
Double Net (Net Net) Lease
An alternative term for a type of net lease. In some
markets, a net net lease is defined as a lease in which the tenant is responsible to pay both property taxes and
premiums for insuring the building(s). (Valbridge)

(The market definition of a double net lease varies
depending on the market)
Easement
The right to use another’s land for a stated purpose.
(Dictionary)
EIFS
Exterior Insulation Finishing System. This is a type of exterior wall cladding system. Sometimes referred to as dry-vit.

Effective Date
The date on which the appraisal or review opinion applies. (SVP)

In a lease document, the date upon which the lease goes into effect. (Dictionary)
Effective Gross Income (EGI)
The anticipated income from all operations of the real
estate after an allowan ce is made for vacancy and
collection losses and an addition is made for any other income. (Dictionary)
Effective Rent
Total base rent, or minimum rent stipulated in a lease, over the specified lease term minus rent concessions; the rent that is effectivel y paid by a tenant net of financial concessions provided by a landlord. (TIs). (Dictionary) EPDM
Ethylene Propylene Diene Monomer Rubber. A type of
synthetic rubber typically used for roof coverings.
(Dictionary)
Escalation Clause
A clause in an agreement that provides for the
adjustment of a price or rent based on some event or
index. e.g., a provision to increase rent if operating
expenses increase; also called escalator clause, expense recovery clause or stop clause. (Dictionary)
Estoppel Certificate
A signed statement by a party (such as a tenant or a
mortgagee) certifying, for another’s benefit, that certain facts are correct, such as that a lease exists, that there are no defaults, and that rent is paid to a certain date.
(Black’s) In real estate, a buyer of rental property typically requests estoppel certificates from existing tenants.

Sometimes referred to as an estoppel letter. (Dictionary) Excess Land
Land that is not needed to serve or support the existing use. The highest and best use of the exce ss land may or

LOYALTON RANCH PROPERTY

ADDENDA

© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 48 may not be the same as the highest and best use of the
improved parcel. Excess land has the potential to be sold separately and is valued separately. (Dictionary)
Excess Rent
The amount by which contract rent exceeds market rent
at the time of the appraisal; created by a lease favorable to the landlord (lessor) and may reflect unusual
management, unknowledgeable or unusually motivated
parties, a lease execution in an earlier, stronger rental market, or an agreement of the parties. (Dictionary)
Expense Stop
A clause in a lease that limits the landlord’s expense
obligation, which results in the lessee paying operating expenses above a stated level or amount. (Dictionary)
Exposure Time
The time a property remains on the market.

The estimated len gth of time that the property interest being appraised would have been offered on the market
prior to the hypothetical consummation of a sale at
market value on the effective date of the appraisal;

Comment: Exposure time is a retrospective opinion
based o n an analysis of past events assuming a
competitive and open market. (Dictionary)
Extraordinary Assumption
An assignment -specific assumption as of the effective
date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser’s opinions or conclusions.

Comment: Uncertain information might include physical,
legal, or economic characteristics of the subject property; or conditions external to the property, such as market
conditions or trends; or the int egrity of data used in an analysis. (USPAP)
Fee Simple Estate
Absolute ownership unencumbered by any other interest
or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain,
police power, and escheat. (Dictionary)
Floor Common Area
In an office building, the areas on a floor such as
washrooms, janitorial closets, electrical rooms, telephone rooms, mechanical rooms, elevator lobbies, and public
corridors which are available primarily for the use of
tenants on that floor. (BOMA)
Full Service (Gross) Lease
A lease in which the landlord receives stipulated rent and is obligated to pay all of the property’s operating and fixed expenses; also called a full service lease. (Dictionary) Furniture, Fixtures, and Equipment (FF&E)
Business trade fixtures and personal property, exclusive of inventory. (Dictionary)
Going-Concern Value
An outdated label for the market value of all the tangible and intangible assets of an established and operating
business with an indef inite life, as if sold in aggregate; more accurately termed the market value of the going
concern or market value of the total assets of the business. (Dictionary)
Gross Building Area (GBA)
Total floor area of a building, excluding unenclosed areas, measured from the exterior of the walls of the above -
grade area. This includes mezzanines and basements if
and when typically included in the market area of the type of property involved.

Gross leasable area plus all common areas.

For residential space, the tota l area of all floor levels measured from the exterior of the walls and including the superstructure and substructure basement; typically does not include garage space. (Dictionary)
Gross Measured Area
The total area of a building enclosed by the dominant
portion (the portion of the inside finished surface of the permanent outer building wall which is 50 percent or
more of the vertical floor -to-ceiling dimension, at the given point being measured as one moves horizontally
along the wall), excluding parking a reas and loading
docks (or portions of same) outside the building line. It is generally not used for leasing purposes and is calculated on a floor by floor basis. (BOMA)
Gross Up Method
A method of calculating variable operating expenses in
income-producing properties when less than 100%
occupancy is assumed. Expenses reimbursed based on
the amount of occupied space, rather than on the total
building area, are described as “grossed up.” (Dictionary) Gross Retail Sellout
The sum of the separate and distinct market value
opinions for each of the units in a condominium,
subdivision development, or portfolio of properties, as of the date of valuation. The aggregate of retail values does not represent the value of all the units as though sold together in a single transaction; it is simply the total of the individual market value conclusions. Also called the aggregate of the retail values, aggregate retail selling price or sum of the retail values. (Dictionary)
Ground Lease
A lease that grants the right to use and occupy land.

Improvements made by the ground lessee typically revert

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(Dictionary)
Ground Rent
The rent paid for the right to use and occupy land
according to the terms of a ground lease; the portion of the total rent allocated to the underlying land.
(Dictionary)
HVAC
Heating, ventilation, air conditioning (HVAC) system. A unit that regulates the temperature and distribution of heat and fresh air throughout a building. (Dictionary)
Highest and Best Use
The reasonably probable use of property that results in the highest value. The four criteria that the highest and best use must meet are legal permissibility, physical
possibility, financial feasibility, and maximum
productivity.

The use of an asset that maximizes its potential and that is possible, legally permissible, and financially feasible.

The highest and best use may be for continuation of an
asset’s existing use of for some alternative use. This is determined by the use that a market participant wo uld
have in mind for the asset when formulating the price that it would be willing to bid. (IVS)

[The] highest and most profitable use for which the
property is adaptable and needed or likely to be needed in the reasonably near future. (Uniform Appraisal
Standards for Federal Land Acquisitions) (Dictionary)
Hypothetical Condition
A condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to
exist on the effective date of the assignment results but is used for the purpose of analysis.

Comment: Hypothetical conditions are contrary to
known facts about physical, legal, or economic
characteristics of the subject property; or about
conditions external to the property, such as market
conditions or trends; or abou t the integrity of data used in an analysis. (USPAP)
Insurable Value
A type of value for insurance purposes. (Typically this includes replacement cost less basement excavation,
foundation, underground piping, and architect’s fees).
(Dictionary)
Investment Value
The value of a property to a particular investor or class of investors based on the investor’s specific requirements.

Investment value may be different from market value
because it depends on a set of investment criteria that are not necessarily typical of the market. (Dictionary)
Just Compensation
In condemnation, the amount of loss for which a property owner is compensated when his or her property is taken.

Just compensation should put the owner in as good a
position pecuniarily as he or she would ha ve been if the property had not been taken. (Dictionary)
Leased Fee Interest
The ownership interest held by the lessor, which includes the right to receive the contract rent specified in the lease plus the reversionary right when the lease expires.
(Dictionary)
Leasehold Interest
The right held by the lessee to use and occupy real estate for a stated term and under the conditions specified in the lease. (Dictionary)

See also Positive Leasehold and Negative Leasehold.

Lessee (Tenant)
One who has the right t o occupancy and use of the
property of another for a period of time according to a lease agreement. (Dictionary)
Lessor (Landlord)
One who conveys the rights of occupancy and use to
others under a lease agreement. (Dictionary)
Liquidation Value
The most probable price that a specified interest in
property should bring under the following conditions:
• Consummation of a sale within a short time period.
• The property is subjected to market conditions
prevailing as of the date of valuation.
• Both the buyer and seller are acting prudently and
knowledgeably.
• The seller is under extreme compulsion to sell.
• The buyer is typically motivated.
• Both parties are acting in what they consider to be
their best interests.
• A normal marketing effort is not possible due t o the brief exposure time.
• Payment will be made in cash in U.S. dollars (or the
local currency) or in terms of financial arrangements
comparable thereto.

The price represents the normal consideration for the
property sold, unaffected by special or creative financing or sales concessions granted by anyone associated with
the sale. (Dictionary)

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© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 50 Loan to Value Ratio (LTV)
The ratio between a mortgage loan and the value of the
property pledged as security, usually expressed as a
percentage. (Dictionary)
Major Vertical Penetrations
Stairs, elevator shafts, flues, pipe shafts, vertical ducts, and the like, and their enclosing walls. Atria, lightwells and similar penetrations above the finished floor are included in this definition. Not included, however, are vertic al penetrations built for the private use of a tenant
occupying office areas on more than one floor. Structural columns, openings for vertical electric cable or telephone distribution, and openings for plumbing lines are not
considered to be major vertical penetrations. (BOMA)
Market Rent
The most probable rent that a property should bring in a competitive and open market under all the conditions
requisite to a fair lease transaction, the lessee, and the lessor each acting prudently and knowledgeably, and
assuming the rent is not affected by undue stimulus.

Implicit in this definition is the execution of a lease as of a specified date under conditions whereby:

Lessee and lessor are typically motivated;
Both parties are well informed or well advised, and acting in what they consider their best interests;
Payment is made in terms of cash or in terms of financial arrangements comparable thereto; and
The rent reflects specified terms and conditions, such as permitted uses, use restrictions, ex pense obligations, duration, concessions, rental adjustments and
revaluations, renewal and purchase options, and tenant improvements (TIs). (Appraisal Institute)
Market Value
The most probable price that a property should bring in a competitive and open ma rket under all condition’s
requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is
not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
• Buyer and seller are typically motivated;
• Both parties are well informed or well advised, and
acting in what they consider their own best interests;
• A reasonable time is allowed for exposure in the open market;
• Payment is made in terms of cash in United States
dollars or in terms of financial arra ngements
comparable thereto; and
• The price represents the normal consideration for the property sold unaffected by special or creative
financing or sales concessions granted by anyone
associated with the sale. (Dictionary)
Marketing Time
An opinion of the amount of time it might take to sell a real or personal property interest at the concluded
market value level during the period immediately after
the effective date of an appraisal. Marketing time differs from exposure time, which is always presumed to precede the effective date of an appraisal. (Advisory Opinion 7 of the Appraisal Standards Board of the Appraisal
Foundation)
Master Lease
A lease in which the fee owner leases a part or the entire property to a single entity (the master lease) in return for a stipulated rent. The master lessee then leases the
property to multiple tenants. (Dictionary)
Modified Gross Lease
A lease in which the landlord receives stipulated rent and is obligated to pay some, but not all, of the property’s operating and fixed exp enses. Since assignment of
expenses varies among modified gross leases, expense
responsibility must always be specified. In some markets, a modified gross lease may be called a double net lease, net net lease, partial net lease, or semi -gross le ase. (Dictionary)
Negative Leasehold
A lease situation in which the market rent is less than the contract rent. (Dictionary)
Operating Expense Ratio
The ratio of total operating expenses to effective gross income (TOE/EGI); the complement of the net income
ratio, i.e., OER = 1 – NIR (Dictionary)
Option
A legal contract, typically purchased for a stated
consideration, that permits but does not require the
holder of the option (known as the optionee) to buy, sell, or lease real estate for a stipulated period of time in accordance with specified terms; a unilateral right to
exercise a privilege. (Dictionary)
Partial Interest
Divided or undivided rights in real estate that represent less than the whole, i.e., a fractional interest such as a tenancy in common, easement, or life interest.
(Dictionary)
Pass Through
A tenant’s portion of operating expenses that may be
composed of common area maintenance (CAM), real
property taxes, property insurance, and any other
expenses determined in the lease agreement to be paid
by the tenant. (Dictionary)

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© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 51 Percentage Lease
A lease in which the rent or some portion of the rent
represents a specified percentage of the volume of
business, productivity, or use achieved by the tenant.
(Dictionary)
Positive Leasehold
A lease situation in which the market rent is greater than the contract rent. (Dictionary)
Potential Gross Income (PGI)
The total income attributable to property at full
occupancy before vacancy and operating expenses are
deducted. (Dictionary)
Prospective Future Value Upon Completion
A prospective market value may be appropriate for the
valuation of a property interest related to a credit
decision for a proposed development or renovation
project. According to USPAP, an appraisal with a
prospective market value reflects an effective date that is subsequent to the date of the appraisal report. … The
prospective market value –as completed - reflects the
property’s market value as of the time that development is expected to be complete. (Dictionary)
Prospective Future Value Upon Stabilization
A prospective market value may be appropriate for the
valuation of a property interest related to a credit
decision for a proposed development or renovation
project. According to USPAP, an appraisal with a
prospective market value reflects an effective date that is subsequent to the date of the appraisal report …The
prospective market value – as stabilized – reflects the property’s market value as of the time the property is
projected to achieve stabilized occupancy. For an
income-producing property, stabilized occupancy is the
occupancy level that a property is expected to achieve
after the property is exposed to the market for lease over a reasonable period of time and at comparable terms and conditions to other similar properties. (Dictionary)
Replacement Cost
The estimated cost to construct, at current prices as of a specific date, a substitute for a building or other
improvements, using modern materials and current
standards, design, and layout. (Dictionary)
Reproduction Cost
The estimated cost to construct, at current prices as of the effective date of the appraisal, an exact duplicate or
replica of the building being appraised, using the same materials, construction standards, design, layout, and
quality of workmanship and embodying all of the
deficiencies, superadequacies, and obsolescence of the
subject building. (Dictionary)
Retrospective Value Opinion
A value opinion effective as of a specified historical date.

The term retrospective does not define a type of value.

Instead, it identifies a value opinion as being effective at some specific prior date. Value as of a historical date is frequently sought in connection with property tax
appeals, damage models, lease renegotiation, deficiency judgments, estate tax, and condemnation. Inclusion of
the type of value with this term is appropriate, e.g.,
“retrospective market value opinion.” (Dictionary)
Sandwich Leasehold Estate
The interest held by the sandwich leaseholder when the
property is subleased to another party, a type of
leasehold estate. (Dictionary)
Sublease
An agreement in which the lessee in a prior lease conveys the right of use and occupancy of a property to another, the sublessee, for a specific period of time, which may or may not be coterminous with the underlying lease term.
(Dictionary)
Subordination
A contractual arrangement in which a party with a claim to certain assets agrees to make his or her claim junior, or subordinate, to the claims of another party. (Dictionary) Surplus Land
Land that is not currently needed to support the existing use but cannot be separated from the property and sold
off for another use. Surplus land does not have an
independent highest and best use and may or may not
contribute value to the improved parcel. (Dictionary)
TPO
Thermoplastic polyolefin, a resilient synthetic roof
covering.

Triple Net (Net Net Net) Lease
An alternative term for a type of net lease. In some
markets, a net net net lease is defined as a lease in which the tenant assumes all expenses (fixed and variable) of operating a propert y except that the landlord is
responsible for structural maintenance, building reserves, and management; also called NNN lease, net net net
lease, or fully net lease. (Dictionary)

(The market definition of a triple net lease varies; in some cases tenants pay for items such as roof repairs, parking lot repairs, and other similar items.)
Usable Area
The measured area of an office area, store area, or
building common area on a floor. The total of all the
usable areas for a floor shall equal floor usable area of that same floor. (BOMA)

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© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 52 Value-in-Use
The value of a property assuming a specific use, which
may or may not be the property’s highest and best use
on the effective date of the appraisal. Value in use may or may not be equal to market value but is different
conceptually. (Dictionary)
VTAB
Value of the Total Assets of a Business. The value of a going concern (i.e. the business enterprise). (Dictionary)

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© 2022 VALBRIDGE PROPERTY ADVISORS | Northern California Page 54 Qualifications of John A. Hillas, MAI, SRA
Managing Director
Valbridge Property Advisors | Northern California

Independent Valuations for a Variable World
State Certifications

Certified General RE Appraiser
-State of California AG002432
-State of Alaska 165129

Memberships/Affiliations/Honors
MAI, SRA Member Appraisal Institute ; Northern California and Alaska Chapters
2012 Chair Appraisal Institute Fall Conference
2009, 2020-21 Chair Appraisal Institute Spring Conference 2008 Chair Appraisal Institute Region One
2007-08 Director Appraisal Institute Board of Directors 2004 President Northern CA Chapter, Appraisal Institute 1998 President Sierra Chapter, Appraisal Institute
Associate Member American Society of Farm Managers & Rural Appraisers (ASFMRA)
Expert Witness Superior Courts of Stanislaus , San Joaquin, Merced, Placer, Sacramento, Fresno,
Tuolumne, and San Mateo Counties

Appraisal Institute Related Courses & Examinations Passed Appraisal Institute: All courses and examinations required for the MAI and SRA designations, as well as thousands of hours of continuing education.

Speaking Engagements:

Nor-Cal Chapter, Appraisal Institute:

Authored/Presented Workshops:
• “Analyzing Operating Expenses”
• “Adjustments in Valuation Analyses”
• “Appraisal of Small Residential Income Properties”
• “Mastering Marshall – Using Marshall & Swift Cost Data”

Risk Management Association (RMA) Central Valley Chapter:

Authored/Presented Workshop:
• “Real Estate Overview”

California Chapter, ASFMRA
Authored/Presented Workshop:
• “Valuation of Transitional Property”

San Joaquin County Assessor In-house Training:

Authored/Presented Seminar:
• “Valuation of Subdivision Properties”
Formal Education

B.B.A.

Business Administration
University of Oregon

A.A.S.

Business Administration
Anchorage Community College

Contact Details

209-623-1451 (p)

[email protected]

Valbridge Property Advisors |
Northern California
2813 Coffee Road, Suite E-2
Modesto, CA 95355

www.valbridge.com

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Related Valuation Experience
Valuation experience includes all sorts of general commercial, industrial, retail, office, multiple -unit residential, existing, and proposed residential, commercial, and industrial subdivisions and transitional land, commercial and agricultural lands includi ng large ranches, orchards, and cropland . Work has been performed for a wide variety of needs including estate planning/filing and gifting, condemnation and general litigation support, insurance casualty loss, and lending.

Managing Director
Valbridge Property Advisors | Northern California (2013-Present) Modesto, California

Senior Vice President, Branch Manager
Hulberg & Associates, Inc. (2007-2013 joined to create Valbridge Property Advisors in 2013)
Modesto, California

Owner/Appraiser
Sierra Valuation Consultants (1996 -2007) (acquired by Hulberg 2007)
Modesto, California

Senior Appraiser
National Valuation Consultants, Inc. (1995-1996)
Denver, Colorado

Senior Appraiser
San Francisco Federal Savings and Loan (1992-1995)
Modesto, California

Senior Appraiser
Private Real Estate Valuation Firm (1991-1992)
Modesto, California

Appraiser
Stockton Savings Bank (1987-1991)
Modesto, California

Appraiser
Hillas Appraisal Company (1980-1987)
Homer, Alaska

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City Council and Authorities ConcurrentMay 24, 2022

City Council and Authorities Concurrent
May 24, 2022