Vista City Council
August 28, 2023

ACTION: Directed staff to develop and erect a sign at 536 Matagual Drive (after closing on the property) informing the public that a park will be developed at the site and providing information on how the public can get updates and provide input on the plans for the park (Vote: 5 – 0).

Clerk/Secretary
Department: City Manager Item No: D1
Prepared by: John Conley, City Manager Meeting Date: August 28, 2023 Approved by: John Conley, City Manager Agenda Location: Discussion SUBJECT: PROPERTY PURCHASE, 536 MATAGUAL DRIVE, VISTA, CA RECOMMENDATION: Discuss the purchase of property at 536 Matagual Drive and provide direction to staff.

CORRELATION TO CITY COUNCIL GOALS: Fiscal Responsibility and Parks and Recreation.

PRIOR ACTION: On June 27, 2023, adopted City Council Resolution No, 2023-124, authorizing the City to enter a Purchase Agreement for a parcel of real property located at 536 Matagual Drive (APN 164-241-42).

STATEMENT ON THE SUBJECT: Mayor Franklin requested that the City Manager place an item on the agenda to discuss the purchase of the subject property.

FISCAL IMPACT: There are no direct fiscal impacts associated with the staff recommendation.

AGENDA
REPORT

CITY COUNCIL

COMMUNITY DEVELOPMENT COMMISSION

SUCCESSOR AGENCY

BUENA SANITATION DISTRICT

JOINT POWERS FINANCING AUTHORITY

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Nadav E. Weinberg

I’m proud to continue to prioritize purchasing new land for new parks. Will Rogers said, Buy land…they ain’t making any more of the stuff!”
I believe in conserving today, green spaces for future residents of Vista. Soon, the City won’t be able to afford to purchase parcels of land the way we’re able to today. Rising values and disappearing green space mean we have to act now to leave a legacy of parks and greenery for the next generation."
As Mayor Franklin has to clearly stated, the time to act is now.

Thank you for your support,
Nadav, Debbie, Aviv (5), and Eden (1)
Nadav E. Weinberg

From:Dan O"Donnell
To:Kathy Valdez
Subject:Fw: Park
Date:Sunday, August 27, 2023 12:44:18 PM
Kind regards,
Dan O'Donnell
Vista City Council District 4
From: Linda Bray
Sent: Saturday, August 26, 2023 4:06 PM
To: Dan O'Donnell
Subject: Park
You don't often get email from Learn why this is important at https://aka.ms/LearnAboutSenderIdentification ]
I just want to make sure you hear from me regarding the park even if the cost is 2.1 M. Vista needs more green space like parks not more residential or fast food. There is way too much of that already.

You are supposed to care about our quality of life here and parks are good for everyone Sent from my iPhone

and thriving.

David Greenspan
davidji.com
Join my meditation community:::
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From:Dan O"Donnell
To:Kathy Valdez
Subject:Fw: Vale view dr.

Date:Sunday, August 27, 2023 12:43:35 PM
Kind regards,
Dan O'Donnell
Vista City Council District 4
From: Olivia Brule >
Sent: Saturday, August 26, 2023 3:40 PM
To: Dan O'Donnell
Subject: Vale view dr.

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Hello, my name is Olivia Brule. I grew up at vale view dr. I have seen this street go through many changes. I have stood up and spoken at city council meetings regarding the push for a hotel and the lots that did in fact get built on the street. This is my home, my dads home, where I’d like to one day raise my kids. Please if there’s the ability to have this land become a park and not another hotel or money grab would not only benefit those that live on the street but our community. Having parks are not only beneficial for the community but for our ecosystem and environment. Just because some spoke out against it doesn’t mean they speak for the community or the street. We have lived there since about 2003. That’s my home as well as many other family’s that all want what’s best.

Anything other than a park would bring heavier traffic than what you already implemented via the Starbucks, Chick-fil-A and Panera. We have no sidewalks and a community that has pets and children. When I was younger my dog got hit by a car due to the heavy traffic from an elementary school switching to an adult school. Please I urge you to do what’s best for the people who live in the area. I have seen vista change so much I approve the deal that was on the table . It’s heartbreaking seeing what’s become of my home. Please stand for the people, that’s all we want is to be heard, understood and respected.

Olivia Brule
Sent from my iPhone

From:Dan O"Donnell
To:Kathy Valdez
Subject:Fw: Our park
Date:Sunday, August 27, 2023 12:43:25 PM
Kind regards,
Dan O'Donnell
Vista City Council District 4
From: Jaydon Sterling-Randall
Sent: Saturday, August 26, 2023 3:29 PM
To: Dan O'Donnell
Subject: Our park
You don't often get email from Learn why this is important at https://aka.ms/LearnAboutSenderIdentification ]
To the Vista City Council
I am 100 percent in favor of the park no matter the cost. A park is an investment our area of Vista.

Park land is priceless for numerous reasons. Green spaces are vital for people and the environment. I have spoken to numerous of my neighbors and they were all very excited about the park. The only negative comment came from John Burke. Please do not allow one negative article to change the possibility of this investment in our city and our neighborhood.

Thank you
Jaydon Sterling
Sent from my iPhone

From:Dan O"Donnell
To:Kathy Valdez
Subject:Fw: Park on Matagual
Date:Sunday, August 27, 2023 12:43:14 PM
Kind regards,
Dan O'Donnell
Vista City Council District 4
From: Aleta Dirdo
Sent: Saturday, August 26, 2023 3:12 PM
To: Dan O'Donnell
Subject: Park on Matagual
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This is just a quick note to emphasize my support for the park on Matagual. There is no better use for that piece of property! As our population grows and open lands vanish in favor of housing density, Vista can use more public parks. Please do not let this project slip away. Thank you.

Aleta Dirdo Hampton Ct.)

From:Dan O"Donnell
To:Kathy Valdez
Subject:Fw: Proposed park on property on Hacienda Dive
Date:Sunday, August 27, 2023 12:43:02 PM
Kind regards,
Dan O'Donnell
Vista City Council District 4
From: david clark
Sent: Saturday, August 26, 2023 3:05 PM
To: Dan O'Donnell
Subject: Proposed park on property on Hacienda Dive
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I fully support the city purchasing the lot on Hacienda Drive as proposed earlier by the Vista City Council. I think the purchase price is excellent and the park will be a wonderful project. This area needs a park, especially with the new housing development going in at the entrance to Matagual Drive.

Sincerely,
David Clark, MD
Vale View Drive
Vista, CA 92081
Sent from my iPhone

From:Mayor John Franklin
To:Kathy Valdez
Subject:Fwd: 536 Matagual - Park appraisal
Date:Monday, August 28, 2023 9:08:36 AM
Please add to packet
John B. Franklin
Mayor
City of Vista
From: Bill Hornung
Sent: Sunday, August 27, 2023 11:04:59 AM
To: [email protected] ; [email protected] [email protected]>; [email protected] ;
[email protected] ; [email protected]
[email protected]>
Cc: [email protected]
Subject: 536 Matagual - Park appraisal
Dear City Council,
I want to express support for the purchase of the 536 Matagual property for a future Vista City Park.

As our City becomes more densely populated, public spaces such as Matagual will become more valuable to ensure a good quality of life.

No doubt there were legitimate concerns for not conducting an appraisal from the outset. But I was pleased to see the Council take quick action to confirm the realistic value of the property. Further, the council’s willingness to collaborate with neighbors in the area to find a practical solution is something we all should strive for as active citizens.

While a $2 million+ price tag is daunting, it’s also not surprising given the market we live in. All the more reason to act sooner rather than later to save this space for public use.

Sincerely,
Bill

BILL HORNUNG

From:Dan O"Donnell
To:Kathy Valdez
Subject:Fwd: Hacienda park
Date:Sunday, August 27, 2023 5:20:23 PM
Kind regards,
Dan O’Donnell
Councilmember D4
City of Vista
Please forgive any grammatical errors, as this was sent from my iPhone.

Begin forwarded message:

From: Sherry Jasmer
Date: August 27, 2023 at 5:19:13 PM PDT
To: Dan O'Donnell
Subject: Hacienda park
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important at https://aka.ms/LearnAboutSenderIdentification ] Hello,
Please consider a park on Hacienda. We don’t want more businesses or traffic.

Vista is losing our rustic charm.

Sherry Jasmer
Sent from my iPad
Sherry L. Jasmer

From:Dan O"Donnell
To:Kathy Valdez
Subject:Fwd: Matagual Park proposal
Date:Monday, August 28, 2023 8:10:18 AM
Kind regards,
Dan O’Donnell
Councilmember D4
City of Vista
Please forgive any grammatical errors, as this was sent from my iPhone.

Begin forwarded message:

From: Gretel Maggos
Date: August 28, 2023 at 7:45:14 AM PDT
To: Dan O'Donnell
Subject: Matagual Park proposal
You don't often get email from . Learn why this is
important at https://aka.ms/LearnAboutSenderIdentification ] Good morning Dan,
It has come to my attention that the proposed park for Matagual is in question.

After considering the options I am writing to state: I support the park at $2.1M.

There are thousands of walkers, cyclists, people with dogs, families out together etc who walk or bike up and down our street every year. Matagual is a true neighborhood. A park could serve thousands in the community for decades to come. It is my understanding the residents in this area will have input as to what type of park will eventually be allowed on that land.

Thank you for listening,
Gretel Maggos
Matagual Drive

From:Dan O"Donnell
To:Kathy Valdez
Subject:Fwd: Park on Hacienda
Date:Sunday, August 27, 2023 6:50:42 PM
Kind regards,
Dan O’Donnell
Councilmember D4
City of Vista
Please forgive any grammatical errors, as this was sent from my iPhone.

Begin forwarded message:

From: Daniel Sayer
Date: August 27, 2023 at 5:29:25 PM PDT
To: Dan O'Donnell
Subject: Park on Hacienda
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Hello,
I am emailing to show my interest, as a resident of Vista, in the purchase of the land on Hacienda to be used for a park.

Thank you!!

From:Wendy Lewkovich
To:Kathy Valdez
Subject:RE: 536 Matagual Dr.

Date:Sunday, August 27, 2023 7:27:16 PM
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To whom it may concern:

Please note that I am in full support of the park proposal for 2.1M at the above location.

Sincerely,
Wendy Lewkovich
Matagual Dr.

Vista, CA 92081

From:Dan O"Donnell
To:Kathy Valdez
Subject:Fwd: Support for Matagual Park
Date:Monday, August 28, 2023 1:01:43 PM
Kind regards,
Dan O’Donnell
Councilmember D4
City of Vista
Please forgive any grammatical errors, as this was sent from my iPhone.

Begin forwarded message:

From: Shannon and Christine Goan
Date: August 28, 2023 at 12:54:20 PM PDT
To: Dan O'Donnell
Subject: Support for Matagual Park
You don't often get email from [email protected]. Learn why this is important Hello Mr. O'donnell,
My name is Shannon Goan, I live at Las Palmas Dr, Vista, CA 92081. I support the park that is being proposed on Hacienda near Matagual and the purchase of the land for 2.1 million dollars.

Thank you!
Shannon Goan

From:Sid Roth
To:John Franklin; Joe Green; Corinna Contreras; Katie Melendez; Dan O"Donnell Cc:Kathy Valdez
Subject:Property purchase, 536 Matagual Drive, Vista, CA Date:Monday, August 28, 2023 11:36:17 AM
Mr Mayor and Council members:

My concern regarding the the City of Vista purchasing the property at 536 Matagual Dr, Vista is why, exactly, the City wants to purchase this piece of land, If it is to build more strip malls or more 3-4 story apartment complexes in the guise of so-called "affordable housing", I am opposed.

I think it would be more meaningful to the public and Vista residents to purchase the 4.59 acres of the KENSHO RESIDENTIAL PROJECT land, P22-0282, bordered by Guajome St, Lado de Loma, and the railroad track and develop into a public park. There is already a considerable increase (and slated for more housing development) in the population density of the Vista downtown area. There is no adequate green space or dog park to accommodate the needs for the level of density that already exists. Dogs are now being walked up and down N. and S. Santa Fe Ave because there is no where else to walk creating an unhealthy environment. There is no play ground area for children and no gathering picnic are for adults other than than the small Wildwood Park and the yet unopened childrens park on Vista Village Dr by Route 78. Both parks are located in very busy traffic areas with car noise and exhaust pollution. What kind of environment is that for the children of Vista and their future health.

I believe the Council needs to take into consideration the residents' request for more green space and maintenance of the rural feel of Vista, expressed by people from every district in the initial 2050 Vista Vision meetings as well as the Council's newly adopted motion to develop an Age Friendly Action Plan. It is time for the Council to think more globally about the Vision for Vista and for the departments to work in sync rather than in reaction to unilateral decisions. It is time to look beyond the here and now or the length of your individual terms. The decision the Council makes now can affect the Vista generations for a hundred years or more.

Respectfully submitted,
Sid Rothenberg

Residential Property
536 Matagual Drive
Vista, California 92081
John Conley
City Manager
The City of Vista
200 Civic Center Drive
Vista, California 92084

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LETTER OF TRANSMITTAL
VANGUARD REALTY ADVISORS VRA-23591
August 25, 2023
John Conley
City Manager
The City of Vista
200 Civic Center Drive
Vista, California 92084
RE: Residential Property
536 Matagual Drive
Vista, California 92081
Vanguard File No: VRA-23591
Mr. Conley:

In accordance with your request, Vanguard Realty Advisors conducted an appraisal of the above captioned property. The property is valued using generally accepted appraisal principles and theory. This report conforms to the current Uniform Standards of Professional Appraisal Practice (USPAP).

This is an Appraisal Report as defined by USPAP Standards Rule 2-2(a). This format provides a detailed description of the appraisal process and subject property but a summarized description of the marke t area, market data, highest & best use and valuation sections. The appraisal service was performed in such a manner that the results of the analysis, opinion, or conclusion are that of a disinterested third party.

The purpose of this appraisal is to develop opinions of the As-Is Market Value (Fee Simple Interest) and Hypothetical Market Value Assuming Zoning Change to Commercial (C-1) (Fee Simple Interest). The intended use of this appraisal is to assist the client in making internal business decisions related to a potential purchase of this asset. The City of Vista is the only intended user of this report.

All other intended uses and users are prohibited. The appraiser has not identified any borrower or seller as an intended user of this appraisal. Receipt of a copy of the appraisal by such a party or any other third party does not mean that the party is an intended user of the appraisal. Such parties are advised to obtain an appraisal from an appraiser of their own choosing if they require an appraisal for their own use. Additionally, this appraisal is not a land or building survey and should not be relied upon for such a purpose. Vanguard Realty Advisors will not be responsible for any actions or occurrences as a result of unauthorized use of this report.

The subject is a single-family home located in Vista, California. The improvements were constructed in 1985.

The improvements total 810 square feet (SF) and are situated on a 2.2700-acre site (98,881 SF). The improvements are average quality and in below average condition. At the time of inspection, the subject was occupied by a tenant who will vacate at the close of escrow. It should be noted that the improvements underutilize the site and no longer contribute to value above the land value. The site is zoned E-1 (Estates Residential) which allows for single family residence, accessory units/guest houses, agriculture and farming uses. There is currently a pending sale of the subject. The pending buyer is The City of Vista, who plans to demolish the current improvements and redevelop the property into a public park. The pending sale, site and improvements are discussed further in the attached report.

LETTER OF TRANSMITTAL (CONTINUED)
VANGUARD REALTY ADVISORS VRA-23591
The following table conveys the final opinions of value that are developed in this appraisal:

The valuation conclusion(s) represents the value of the real property only, no personal property and/or intangible business assets have been included in this analysis.

The following extraordinary assumptions and hypothetical conditions were made in developing our opinion(s) of value. It is noted that the use of an extraordinary assumption and/or hypothetical condition may have affected the assignment results.

Extraordinary Assumptions
The use of an extraordinary assumption(s) may have impacted the results of the assignment. Based on the scope of our report, an interior inspection was not conducted. We have assumed the property is in below average condition and average quality based on exterior inspection. Further, we have relied on information provided by the client as well as from public records as it relates to building size, year of construction, land size, and other physical characteristics. We have assumed that the condition/quality of the property and information provided by public records are accurate. If this information is later determined to be incorrect, we reserve the right to amend the report and/or change the value opinion.

Hypothetical Conditions
The use of a hypothetical condition(s) may have impacted the results of the assignment. The Market Value Assuming Zoning Change to Commercial (C-1) is a hypothetical condition as it assumes a zoning change as of the date of inspection.

If there are any specific questions or concerns regarding the attached appraisal report, or if Vanguard Realty Advisors can be of additional assistance, please contact the individuals listed below.

Sincerely,
Vanguard Realty Advisors
Matthew K. Reynolds, MAI
Certified General Real Estate Appraiser
State of California License #AG041942
Expires 01/18/25)
760.855.3959 (direct)
[email protected]
Russell W. McCoy, MAI
Certified General Real Estate Appraiser
State of California License #AG028414
Expires 10/25/23)
760.707.5732 (direct)
[email protected]

TABLE OF CONTENTS
VANGUARD REALTY ADVISORS VRA-23591

LETTER OF TRANSMITTAL

INTRODUCTION
Executive Summary ________________________________________________________________________________________________ 1 Subject Property Photographs ____________________________________________________________________________________ 4 Identification Of Appraisal Assignment ____________________________________________________________________________ 6 Purpose & Intended Users ________________________________________________________________________________________ 7 Subject Property Sale History ______________________________________________________________________________________ 7 Property Taxes & Assessments ____________________________________________________________________________________ 8 Subject Zoning Information _______________________________________________________________________________________ 9 Scope of Work ____________________________________________________________________________________________________ 12

DESCRIPTIONS & EXHIBITS
Regional Description _____________________________________________________________________________________________ 15 Local Area Analysis _______________________________________________________________________________________________ 22 Site Description ___________________________________________________________________________________________________ 27 Exhibits ___________________________________________________________________________________________________________ 30 Improvement Description ________________________________________________________________________________________ 34 Highest & Best Use Analysis ______________________________________________________________________________________ 37

VALUATION METHODS
Sales Comparison Approach ______________________________________________________________________________________ 40 Land Sales Location Map & Land Sale Exhibits ________________________________________________________________ 41 Land Sales Comparison Table __________________________________________________________________________________ 49 Land Sales Conclusion _________________________________________________________________________________________ 51 Sales Comparison Approach Two ________________________________________________________________________________ 53 Land Sales Comparable Location Map Two ____________________________________________________________________ 54 Land Sales Comparison Table Two ____________________________________________________________________________ 56 Land Sales Two Conclusion ____________________________________________________________________________________ 58 Reconciliation of Value Conclusions ______________________________________________________________________________ 59 Certification _______________________________________________________________________________________________________ 60 Assumptions & Limiting Conditions ______________________________________________________________________________ 62 ADDENDA 65
A. Engagement Letter
B. Qualifications of Appraiser(s) and Appraiser License(s)

EXECUTIVE SUMMARY
VANGUARD REALTY ADVISORS VRA-23591 1

EXECUTIVE SUMMARY (CONTINUED)
VANGUARD REALTY ADVISORS VRA-23591 2

AERIAL PHOTOGRAPH
VANGUARD REALTY ADVISORS VRA-23591 3

SUBJECT PROPERTY PHOTOGRAPHS
VANGUARD REALTY ADVISORS VRA-23591 4
View east from westside of subject property View north from westside of subject property View east at northwest corner of subject View northeast at northwest corner of subject View west from northeast corner View south from northeast corner

SUBJECT PROPERTY PHOTOGRAPHS (CONTINUED)
VANGUARD REALTY ADVISORS VRA-23591 5
Improvements on the subject property Improvements on the subject property View west along Hacienda Road – subject on left View east along Hacienda Road – subject on right View south along Matagual Drive – subject on left View north along Matagual Drive – subject on right

IDENTIFICATION OF ASSIGNMENT
VANGUARD REALTY ADVISORS VRA-23591 6
Property Identification
The subject is a single-family home located in Vista, California. The improvements were constructed in 1985.

The improvements total 810 square feet (SF) and are situated on a 2.2700-acre site (98,881 SF). The improvements are average quality and in below average condition. At the time of inspection, the subject was occupied by a tenant who will vacate at the close of escrow. It should be noted that the improvements underutilize the site and no longer contribute to value above the land value. The site is zoned E-1 (Estates Residential) which allows for single family residence, accessory units/guest houses, agriculture and farming uses. There is currently a pending sale of the subject. The pending buyer is The City of Vista, who plans t o demolish the current improvements and redevelop the property into a public park.

The property is located at 536 Matagual Drive in Vista, San Diego County, California. The assessor parcel Number is: 164-241-42-00. The legal description of the subject property is as follows:

IDENTIFICATION OF ASSIGNMENT (CONTINUED)
VANGUARD REALTY ADVISORS VRA-23591 7
Client Identification
The client is The City of Vista.

Purpose, Intended Use and Intended User
The purpose of this appraisal is to develop opinions of the As-Is Market Value (Fee Simple Interest) and Hypothetical Market Value Assuming Zoning Change to Commercial (C-1) (Fee Simple Interest). The intended use of this appraisal is to assist the client in making internal business decisions related to a potential purchase of this asset. The City of Vista is the only intended user of this report.

All other intended uses and users are prohibited. The appraiser has not identified any borrower or seller as an intended user of this appraisal. Receipt of a copy of the appraisal by such a party or any other third party does not mean that the party is an intended user of the appraisal. Such parties are advised to obtain an appraisal from an appraiser of their own choosing if they require an appraisal for their own use. Additionally, this appraisal is not a land or building survey and should not be relied upon for such a purpose. Vanguard Realty Advisors will not be responsible for any actions or occurrences as a result of unauthorized use of this report.

Deductions, Additions & Discounts
No deductions, additions or discounts were required in forming the as-is value opinion.

Personal Property & Intangibles
There is no personal property (FF&E) or intangible items included in this valuation.

Property & Sales History
County records show ownership vested to Thomas E Shadle. County records show no transfers of ownership within the last three years. Please note that this information is included only to satisfy the requirements of USPAP. It is not intended as a guarantee to the chain of title and a title search should be performed by a title company should a definitive abstract be desired.

There is a pending sale of the subject to The City of Vista for $2,150,000 with deed restrictions that will limit the use of the subject property to use as public park into perpetuity. According to the pending buyer and the listing broker (Bob Willingham with Kidder Mathews), this was a condition of sale for the seller. Mr. Willingham stated the subject was listed for $3,650,000 and was on and off the market for a few years. Through this time Mr. Willingham reported the property was in escrow three other times to developers. The first escrow was a hotel developer who had 18 months due diligence and time to rezone the property to commercial zoning and acquire approval for the development of a hotel. This application was ultimately not approved. The two additional buyers were also looking to rezone the property to commercial zone for development of multi - family residential developments. According to Mr. Willingham, all three offers were north of $3,000,000. As of the date of the inspection, the property was zoned Estates Residential (E-1). Based on the analysis herein, the pending sale price is concluded to be above market with the current E-1 zoning.

IDENTIFICATION OF ASSIGNMENT (CONTINUED)
VANGUARD REALTY ADVISORS VRA-23591 8
Taxes & Assessments
The subject’s assessed values and property taxes for the current year are summarized in the following table:

In California, reassessments of property values occur upon sale of a property due to the passage of Proposition 13 in July of 1978. If this has not occurred during the tax year, properties are limited to a maximum increase in assessed value of 2% per year. Taxes are based upon 1% of full cash value plus any amounts necessary to satisfy general obligation bonds or other indebtedness.

Due to California law, property tax comparables are not relevant or included in real estate appraisals. This is because taxes are based on the hypothetical sale of a subject property and the current tax rate, as sales trigger a reassessment at the actual sale price in California.

IDENTIFICATION OF ASSIGNMENT (CONTINUED)
VANGUARD REALTY ADVISORS VRA-23591 9
Zoning
The subject’s zoning information is shown in the following table:

It is noted that detailed zoning studies are performed by a zoning or land use expert, including attorneys, City/County land use planners, City/County compliance officers, surveyors, or architects. The depth of our zoning reporting correlates with the scope of this assignment only and this appraisal is not intended to be a final determination of compliance, as we are not experts in this field and that determination is outside the scope of the assignment. The client is advised to obtain a zoning letter from the City/County if further assurance is needed. We note that this appraisal is not intended to be a detailed determination of compliance, as that determination is beyond the scope of this real estate appraisal assignment.

IDENTIFICATION OF ASSIGNMENT (CONTINUED)
VANGUARD REALTY ADVISORS VRA-23591 10
Exposure & Marketing Time
The following information is used to estimate exposure time and marketing time for the subject:

Exposure & Marketing Time Conclusion
Considering the previous indicators of marketing times, a reasonable estimate of exposure time for the subject is estimated to be 12 months or less and marketing time of 12 months or less.

Definition of Market Value
The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

1. buyer and seller are typically motivated;

2. both parties are well informed or well advised, and acting in what they consider their own best interests;

3. a reasonable time is allowed for exposure in the open market;

4. payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and

5. the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

Source: Interagency Appraisal and Evaluation Guidelines; December 10, 2010, Federal Register, Volume 75 Number 237, Page 77472.

IDENTIFICATION OF ASSIGNMENT (CONTINUED)
VANGUARD REALTY ADVISORS VRA-23591 11
Property Rights Appraised
The property rights appraised constitute the fee simple interest.

Fee Simple Interest - 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.1 Value Scenarios
As-Is Value – The estimate of the market value of real property in its current physical condition, use, and zoning as of the appraisal date.2
Hypothetical Market Value (Commercial Zoning, C-1) – The estimate of value formulated based on the hypothetical condition that the zoning of the subject property is changed to Commercial Zoning (C-1) as of the date of inspection.
1 The Dictionary of Real Estate Appraisal, Sixth Edition, Appraisal Institute, Chicago, Illinois, 2015 2 The Dictionary of Real Estate Appraisal, Sixth Edition, Appraisal Institute, Chicago, Illinois, 2015

SCOPE OF WORK
VANGUARD REALTY ADVISORS VRA-23591 12
The scope of work for this appraisal assignment is outlined below:

The appraisal analyzes the regional and local area profiles including employment, population, household income and real estate trends. The local area was inspected to consider external influences on the subject.

The appraisal analyzes legal and physical features of the subject including site size, improvement size, flood zone, seismic zone, site zoning, easements, encumbrances, site access and site exposure.

The appraisal includes a multi-family market analysis for the San Diego Market and Vista Submarket using vacancy, absorption, supply and rent data. Conclusions were drawn for the subject’s competitive position given its physical and locational features, current market conditions and external influences.

The appraisal includes a Highest and Best Use analysis and conclusions have been completed for the highest and best use of the subject property As Vacant and As Improved. The analysis considered legal, locational, physical and financial feasibility characteristics of the subject site and existing improvements.

In selecting applicable approaches to value, the appraisers considered the agreed upon appraisal scope and assessed the applicability of each traditional approach given the subject’s characteristics and the intended use of the appraisal. As a result, this appraisal developed the Sales Comparison Approach (Site Valuation). The values presented represent the As-Is Market Value (Fee Simple Interest) and Hypothetical Market Value Assuming Zoning Change to Commercial (C-1) (Fee Simple Interest) The assignment was prepared as an Appraisal Report in accordance with USPAP Standards Rules 2, with the analysis stated within the document and representing a fully described level of analysis. This format is designed to inform the reader of all factors influencing the property's value in a clear and concise manner. The report is also intended to comply with the requirements of the Code of Professional Ethics of the Appraisal Institute, the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (if applicable), and Title XI Regulations (if applicable).

The authors of this report are aware of the Competency Rule of USPAP and meet the standards.

Parties Providing Assistance
Thaison Tran provided significant real property appraisal assistance to the appraisers signing this certification, including verifying sale comparables and interviewing brokers. It is noted that Thaison Tran also photographed and inspected the subject property. All parties conducted assistance under the direct supervision of the appraiser's signing this report in compliance with State regulations.

SCOPE OF WORK (CONTINUED)
VANGUARD REALTY ADVISORS VRA-23591 13
Sources of Information
Unless otherwise noted later in this appraisal report, the following sources were contacted to obtain relevant information:

The lack of unavailable items could affect the results of this analysis. As part of the general assumptions and limiting conditions, the subject is assumed to have no adverse easements, significant items of deferred maintenance (unless otherwise noted in the Improvements Description section) or be impacted by adverse environmental conditions.

All necessary information was provided for this analysis.

Subject Property Inspection

REGIONAL AREA MAP
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REGIONAL AREA ANALYSIS
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San Diego County/San Diego-Chula Vista-Carlsbad MSA
The subject is located in San Diego County, within
incorporated Vista, CA. The San Diego region comprises the San Diego-Chula Vista-Carlsbad MSA. San Diego County
comprises 18 incorporated cities and covers an area of
approximately 4,500 square miles. It is bordered by Orange and Riverside Counties to the north, Mexico to the south, Imperial County to the east and the Pacific Ocean to the west.

The county seat (city of San Diego) was first established in 1850. With approximately 70 miles of coastline and a mild year-round climate, San Diego County is a very popular place to visit and to live. The region’s population has a rather diverse civilian and military mix, with military bases and significant private employment centers. The geography of the region is also rather diverse, with beach communities, desert and mountain ranges.

Population & Housing
A summary of population and housing information for the county is shown below:

According to state estimates, the 2022 population of San Diego County was 3,287,306, making it the 2nd largest county in the state. San Diego’s population decreased 1.4% over the past five years. Incorporated San Diego is the largest city within the region, followed by Chula Vista and Oceanside. Chula Vista experienced County / City
Total
Population
5-Year
Change
Total
Household
Total Housing
Units Occupied
Vacancy
Rate
State of California 39,185,605 -1.4%38,278,915 14,583,998 13,612,650 6.7% San Diego County
Carlsbad 115,585 0.4%114,619 48,385 45,386 6.2%
Chula Vista 276,785 3.3%275,188 88,625 85,879 3.1%
Coronado 22,277 2.6%17,325 9,591 7,398 22.9%
Del Mar 3,929 -11.5%3,929 2,582 1,939 24.9%
El Cajon 105,638 0.4%103,018 36,837 35,635 3.3%
Encinitas 61,515 -2.9%60,958 26,670 24,602 7.8%
Escondido 150,679 -1.2%148,173 50,383 48,541 3.7%
Imperial Beach 26,243 -3.5%25,947 10,159 9,436 7.1%
La Mesa 60,472 -0.4%59,778 26,319 25,145 4.5%
Lemon Grove 27,242 0.6%26,877 9,375 9,031 3.7%
National City 61,471 -1.3%55,131 17,920 17,032 5.0%
Oceanside 173,048 -2.4%172,060 67,853 63,483 6.4%
Poway 48,759 -2.9%48,178 17,013 16,515 2.9%
San Diego 1,374,790 -2.8%1,312,793 558,788 520,951 6.8% San Marcos 93,585 -2.9%91,792 32,000 30,533 4.6%
Santee 59,015 2.8%58,131 22,019 21,410 2.8%
Solana Beach 12,812 -7.8%12,812 6,592 5,641 14.4%
Vista 100,291 -1.5%98,199 33,762 32,509 3.7%
Balance Of County 513,170 -0.2%485,987 179,981 168,312 6.5% Incorporated 2,774,136 -1.6%2,684,908 1,064,873 1,001,066 6.0% County Total 3,287,306 -1.4%3,170,895 1,244,854 1,169,378 6.1% Source: CA Department of Finance
2022 POPULATION & HOUSING

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the highest growth rate of 3.3%. Cities with moderate to high growth generally reflect the availability of vacant land and additions to housing over the past five years.

According to Zillow, the median sale price of a single-family home in San Diego County was $859,364 during May 2023 (most recent figure available). This median reflects a 4.4% decrease from the median during the same period in 2022.

MSA Employment Trends
Industry employment the subject’s MSA 2.7% between May 2022 and May 2023. The larges t increases were seen in the Leisure & Hospitality, Education & Health Services, Construction, and Government sectors, with increases at or above 2.6%
The unemployment rate in the San Diego County was 3.5% in May 2023, up from a revised 3.3% in April 2023, and above the year-ago estimate of 2.9%. This compares with an unadjusted unemployment rate of 4.5% for California and 3.4% for the nation during the same period.

A summary of employment by sector and historical unemployment for the MSA is shown in the following table and graph:

MSA EMPLOYMENT BY SECTOR
Sector Total Jobs % Change
Other Services 58,500 7.5%
Leisure & Hospitality 206,100 6.3%
Education & Health Services 240,600 6.1%
Construction 90,000 2.6%
Government 255,300 2.0%
Professional & Business Services 287,200 1.2%
Trade, Transportation & Utilities 222,400 0.9%
Information 22,000 0.0%
Finance 77,900 0.0%
Manufacturing 116,700 -0.4%
Total 1,587,000 2.7%
Source: CA Employment Development Dept. (San Diego-Carlsbad MSA - May 2023)

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Top Employers
A summary of the top employers for San Diego County is shown in the following table:

LARGEST EMPLOYERS - SAN DIEGO COUNTY
Employer Name Location Industry
32nd St Naval Station San Diego Federal Government-National Security Barona Casino Lakeside Casinos
Barona Resort Lakeside Resorts
Coronado Naval Amphibious Base Coronado Military Bases
General Dynamics Nassco San Diego Ship Builders & Repairers (Mfrs) Hairspray San Diego Cosmetics & Perfumes-Retail
Kaiser Permanente San Diego Clinics
Kaiser Permanente Medical Grp San Diego Hospitals
Kyocera Communications Inc San Diego Electronic Equipment & Supplies-Mfrs Marine Corps Recruit Depot San Diego Military Bases
Merchants Building Maintenance San Diego Janitor Service Palomar Health Downtown Campus Escondido Hospitals
Palomar Pomerado Health Rehab Escondido Rehabilitation Services San Diego County Sheriff Santee Police Departments
San Diego Naval Medical Ctr San Diego Military Bases
Scripps Clinic La Jolla Clinics
Scripps Research Institute La Jolla Research Service
Sea World-San Diego San Diego Amusement & Theme Parks
Sharp Grossmont Hospital La Mesa Hospitals
Sharp Mary Birch Hosp-Women San Diego Hospitals
Sharp Memorial Hospital San Diego Hospitals
Sycuan Casino El Cajon Casinos
Tyco Health Care San Diego Manufacturers
Utc Aerospace Systems Chula Vista Aircraft Components-Manufacturers Viejas Casino & Outlet Ctr Alpine Casinos
Source: http://www.labormarketinfo.edd.ca.gov/majorer/MajorER.asp Economy
The following are excerpts from CoStar regarding the economy.

San Diego's unemployment rate fell below 4% during July, according to the latest jobs report released by the Bureau of Labor Statistics. The current 3.9% rate compares to California's statewide unemployment rate of

4.8% and to 3.4% 12 months ago.

The unemployment rate fell even as San Diego saw the loss of 13,700 nonfarm positions in July. The surfeit of those positions were in government, and more pointedly, local government educational services, as school was in recess for the summer.

The slight downward adjustment in the unemployment rate can largely be attributed to the rise in the labor force to 1.6 million. That is the highest level since March and the first month-over-month increase since the March jobs report.

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The office-using sectors that consist of information, financial activities, and professional and business services continued their moribund run.

The three sectors shed a total of 900 jobs in July and more than 3,000 since the start of the year.

The office market continues to adapt to the changing space requirements of tenants, which often points to users rightsizing their footprints and taking less space.

During the past year, San Diego's nonfarm employment rose by 2.6%, or 39,300 jobs. Leisure and hospitality led the way with 12,500 positions added. That compares with 2.3% in Los Angeles and 2.9% in Orange County.

In July, almost every one of the top employment sectors saw a month-over-month drop in job postings.

Similarly, nearly all of the top employers in San Diego saw a similar month-over-month decline.

San Diego saw marginal population growth after falling each of the previous two years, according to the latest U.S. census data looking at the change in county population numbers between July 2021 and July 2022. Both Orange County and Los Angeles saw their populations continue to fall. Domestic migration in San Diego has typically trended in negative territory, and last year was no different. More than 18,000 people left the county through mid-2022. Last year's July figure was partially offset by international migration, which exceeded 9,000, the most here in three years. High housing costs are one of the primary reasons that population growth has largely stalled.

More than 80 research institutes are located in San Diego, from Scripps Research Institute to Salk Institute for Biological Studies, in addition to five universities. This cluster of research in the Golden Triangle has created one of the strongest life science cores in the United States. Furthermore, Scripps Health has five campuses across the metro and announced that it is spending $2.6 billion on upgrades to its facilities, further bolstering San Diego as a destination for "medical tourism."
San Diego is also home to more than 140,000 active duty and civilian military employees. The defense industry accounts for more than 350,000 jobs in the region according to the San Diego Military Advisory Council. That is close to 25% of the economy. And the Navy's renewed focus on the Pacific theater of operation will result in a 60/40 split between the Pacific and Atlantic fleets, further solidifying San Diego's status as a major Navy hub.

It is also why San Diego has one of the largest concentrations of millennials in the country, accounting for 25% of the population.

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Building Permits
Another economic indicator is trends in residential building permits. When building permits are issued, construction employment increases as homes are constructed. Other real estate-related employment sectors have increases following construction as properties are sold or leased. Other retail sector jobs are then created once residential units are occupied by owner or renters.

The following tables summarize permit activity in San Diego County as of May 2023.

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LOCAL AREA ANALYSIS
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Overview
The subject property is located in the city of Vista within the Vista Submarket. Vista was incorporated in January 1963 and currently covers an area of approximately 19 square miles. It is located in the northern area of the county, approximately 43 miles north of Downtown San Diego. The city is bordered by the cities of Oceanside and Bonsall to the north, San Marcos and Carlsbad to the south, San Marcos to the east and Oceanside and Carlsbad to the west. The City of Vista is a medium-sized city known for its agricultural heritage, historic downtown village, and its more than 25 educational institutions for Vista youth.

Transportation
Primary freeway linkage to the area is via Interstates 5 and 15, and State Routes 76 and 78. Main arterials in the market area include Melrose Drive, College Boulevard, Mission Avenue and Rancho Santa Fe. The city of Vista is 42.7 miles north of San Diego International Airport, 57.8 miles southeast of John Wayne Airport and

96.4 miles southeast of Los Angeles International Airport. Other public modes of transportation can be found throughout the market area.

Commercial Real Estate Development
Below is a summary of commercial real estate sectors for the subject's market from the most recent CoStar market reports. It is noted that a more detailed analysis of statistics for the subject’s property type for the market and submarket is shown in the following Market Analysis section:

The San Diego retail market has seen positive net absorption during the past seven quarters, which has been the longest consecutive quarterly streak in the past 10 years. That has resulted in a year-over-year vacancy change of -0.8% to 4.1%, which is in line with historical norms, after a net of 990,000 SF was absorbed in the past 12 months. More notably, the availability rate is trending at its lowest level in the past 10 years at 4.3%, and more than 100 basis points below the long-term by roughly 100 basis points. New leasing activity has slipped over the past two quarters as occupancy has fully recovered. Given the strength of overall demand, waning leasing activity is more a function of less space than of less interest. Even prior to that, leasing behavior among retailers has shifted relative to pre-pandemic norms. The average new retail lease is trending at its smallest size in nearly 10 years as many adapt to shifting consumer preferences toward e-commerce, a shift that accelerated due to the pandemic. Rents are up 2.7% year over year, compared to the long-term average of 2.6%. Even so, when accounting for inflation, rents are still falling in real terms. Landlords of high-end or well-located space are expected to have pricing power in 2023, while landlords with stale space may have to begin lowering rents. That could give leverage to tenants for the first time in several years. The wave of department store closures, national chain bankruptcies, and local mom -and-pop insolvencies that resulted from the onset of the pandemic have largely ended with a few exceptions. Among the most recent was the 30,000-SF Bed, Bath, & Beyond at Santee Trolley Square during 22Q3 and another roughly 50,000-SF location at Terra Nova Place in Chula Vista at the beginning of 2023. Many of those vacant anchors and big-box sites, of which there are few, could provide an opportunity for owners to redevelop into multifamily or mixed -use that would not only help the housing picture in San Diego, but it would also help boost occupancy. Sev eral of these sites have been purchased since 2021 with the intent of repositioning into housing, and those redevelopment deals account for more than 1% of the market's inventory. The State of California passed a law at the end of 2022 which would streamline the process to allow for the development of affordable housing on vacant and underutilized commercial properties such as big boxes, strip centers or office buildings. With interest rates on the rise, deal flow and investment volume have slowed compared to the activity. Buyers are

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being more selective as the cost of debt has made for a more challenging investment market. Local participants anticipate that cap rates could rise upwards of 100 basis points to reflect the current environment.

The San Diego office market is supported by a mix of defense contractors, healthcare providers, life sciences firms, and tech companies. Several top universities, including UC San Diego, the University of San Diego, and San Diego State University, provide a talent pool of job-seeking graduates and collaborative work with firms and research institutes. That, in turn, has formed a strong biotech ecosystem and incubator atmosphere that helps drive demand. Even so, challenges have spread across the office landscape that are likely to last through 2023. Net absorption has been positive for all but two quarters since the start of 2021. While vacancy has fallen from a pandemic high of 11.8% in 2021, it is still well above the 2019 year-end figure near 9%. That comes even as San Diego is one of the few major markets bucking the national trend as absorption has been a net positive since the start of the pandemic. Several substantial deals were signed by life sciences and high- tech firms in 2022. Neurocrine Biosciences signed one of the biggest commercial leases in San Diego in the past decade when the biotech firm leased the Aperture Del Mar campus in Del Mar Heights/Carmel Valley totaling 535,000 SF during 22Q1, while Amazon added nearly 125,000 SF at the Collection at UTC at the start of the year. That was followed by Apple leasing more space in Rancho Bernardo and UTC to increase its local footprint to more than 1.4 million SF in the region, and Google doubled its footprint in Sorrento Mesa after adding more than 100,000 SF at the Verge campus in 2022. There is still a great degree of uncertainty about the pandemic's long-term effect on office space use, and high-quality assets are thought to have the upper hand, according to many local participants. There is concern that should the se large biotech and high-tech firms pull back their demand, leasing activity will moderate notably. New leasing has fallen for three straight quarters, with 22Q4 recording a similar level as at the height of the pandemic in 2020. That has coincided with a drop in venture capital, which reached $10 billion in 2021. That level fell by more than 50% in 2022. Many of the extensions that were signed at the start of the pandemic are likely to begin rolling over in 2023, which could further cloud a recovery in the near term. Tenants are still relinquishing under-utilized office space, and there is about 2.8 million SF of sublet space available, which is a 15-year high. The sustained level of sublease availability indicates there is no one-size-fits-all solution for businesses operating as the pandemic wears on.

That's particularly true as the sublet space coming to market has spread across nearly every sector, from biotech and high-tech to lending and healthcare. Buyers have begun showing more caution in the investment market as interest rates have risen. Pricing is anticipated to soften as cap rates rise to compensate for the high cost of debt.

Leasing activity in the San Diego industrial market has moderated the past two quarters after averaging about 3 million SF since the start of 2020. Larger space users have become more cautious amid economic concerns, and many are trying to renew instead of seeking new space. That could spell further moderation in new leasing activity throughout 2023. Conversely, smaller space users have shown less trepidation, according to local brokers, with some advisors suggesting that larger spaces be broken out to accommodate those tenants. The median time on the market for industrial space is trending 50% lower than it was prior to 2020. Similar to the apartment market, locals have expressed that the market is simply normalizing. Vacancy should remain relatively stable in the near-term forecast, even with leasing activity moderating, given the supply-demand balance. The surfeit of speculative development is along the border with Mexico in Otay Mesa, where firms are increasingly pivoting to take advantage of tax incentives from cross-border distribution and manufacturing channels. The number of lanes that can process cargo trucks into San Diego at Otay Mesa Port of Entry increased from nine to 16 in 2022 which should only improve access. This is where Amazon built its 3.4-million SF distribution facility in 2021 and where the e-commerce giant opened a separate 700,000-SF facility in 22Q3.

There is roughly 1.3 million SF of space available in the pipeline within two miles of the port of entry there.

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Given recent demand patterns there, buildings are often leased within a short window of the delivery date.

Annual rent growth remains firmly above the long-term average and rate of inflation, and at 11.5%, compared to the national rate of 10.4%. It has been supported by the strength of San Diego's logistics sector, Otay Mesa has stood atop the leaderboard for several quarters, and life sciences nodes where tenants typically lease flex space. It took until 22Q4 for rent growth to show signs of moderation on a quarterly basis. That was one quarter later than the national trend. Rent growth is expected to moderate even further in 2023. For context, the long-term average in San Diego is 4.0% on an annualized basis. National investors remain active here even as deal flow has moderated since mid-2022 due to high interest rates. That could lead to a softening in pricing and rising cap rates. Investors have been attracted to the diverse tenant pool and strong rent growth. Buyers continue to target the region's north and south county logistics nodes and formidable life sciences submarkets for lab campuses and the potential to convert outdated industrial facilities and office buildings into lab space.

Demographics
The following information reflects the demographics for the subject’s area.

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As shown in the previous table, the market area has experienced moderate population growth. Median household incomes are estimated at $81,659 in the 1.0-mile ring, $88,591 in the 3.0-mile ring and $93,933 in the 5.0-mile ring. Incomes are at or near the State. A majority of housing units is occupied by owners in the

5.0-mile radius. Median home value estimates are highest in the 5.0-mile ring.

Immediate Neighborhood
The subject is located in a commercial/residential node along the southeastern corner of Matagual Drive and Hacienda Road in Vista. Major transportation arterials in the immediate neighborhood are Melrose Drive, Sunset Drive, Hacienda Drive and Santa Fe Avenue. The subject has good freeway linkage as Interstates 5 & 15 and State Route 78 & 76, are in proximity to this area of Vista. The immediate area is nearly 95% built-out.

The majority of the developments in the area were built between the 1970’s and 2020’s, with average to good appeal levels. Any new development in the area will primarily come from redeveloping/razing existing buildings. The subject is surrounded by commercial/residential developments. Overall, the subject conforms well to other properties in the area.

The following is an immediate neighborhood map:

Subject

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Area Summary
The neighborhood is an established commercial/residential area of Vista. The outlook for the neighborhood is for relatively stable performance with only moderate improvement over the next several years. As a result, the demand for existing developments is expected to be adequate. The overall long-term outlook for the region and market area is moderate to strong economic growth. Additional information relating to the competitive position of the subject is provided in the Market Analysis section.

SITE DESCRIPTION
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The subject property consists of one parcel with a total site area of 98,881 SF (2.27 AC) which is based on information obtained from RealQuest. It is perceived that there is no surplus or excess land at the subject. For the purposes of this report we have relied on this site area and reserve the right to amend our analysis upon receipt of a formal legal plan.

Adjacent Properties
North Hacienda Road followed by State Highway 78
South Residential developments
East Residential developments
West Commercial development
Accessibility Access to the subject site is considered average overall.

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Exposure & Visibility Exposure of the subject is above average.

Flood Plain Zone X (Unshaded). This is referenced by Panel Number 060297-06073C0778G, dated May 16, 2012. Zone X (unshaded) is a moderate and minimal risk area.

Areas of moderate or minimal hazard are studied based upon the principal source of flood in the area. However, buildings in these zones could be flooded by severe, concentrated rainfall coupled with inadequate local drainage systems. Local storm water drainage systems are not normally considered in a community’s flood insurance study. The failure of a local drainage system can create areas of high flood risk within these zones. Flood insurance is available in participating communities but is not required by regulation in these zones.

Nearly 25% of all flood claims filed are for structures located within these zones.

Minimal risk areas outside the 1% and 0.2% annual chance floodplains. No BFEs or base flood depths are shown within these zones. (Zone X (unshaded) is used on new and revised maps in place of Zone C.)
Seismic The subject is in a highest risk area. While properties in California are considered high risk, it may or may not be identified as being located in Alquist- Priolo Earthquake Special Studies Zone. The Alquist-Priolo Special Studies Zone Act of 1972 was enacted by the State of California to regulate development near active earthquake faults. The Act required the State Geologist to delineate earthquake fault zones along known faults in California. Cities and counties affected by the identified zones must limit certain development projects within the zones unless geologic investigation demonstrates that the sites are not threatened by surface displacement from future faulting. The Alquist -Priolo maps identify areas at risk of having surface ruptures; they do not address seismic risk due to soil composition or distance from an active fault. According to information provided by the California Department of Conservation, the subject property is not located within the boundaries of an Alquist-Priolo Earthquake Special Studies Zone. The appraisers are not qualified in the determination of seismic risk, and the client is advised to consult a geotechnical expert in the determination of seismic risk.

Easements Based on the provided preliminary title report, and an on-site inspection, no adverse easements or encumbrances were noted. This appraisal assumes that there are no adverse easements present. If questions arise, further research is advised.

Soils A detailed soils analysis was not available for review. Based on the development of the subject, it appears the soils are stable and suitable for the existing improvements.

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Hazardous Waste We have not conducted an independent investigation to determine the presence or absence of toxins on the subject property. If questions arise, the reader is strongly cautioned to seek qualified professional assistance in this matter. Please see the Assumptions and Limiting Conditions for a full disclaimer.

Site Rating Overall, the subject site is considered average as a residential land site in terms of its location, exposure and access to employment, education and shopping centers, based on its location within Vista.

Subject

PLAT MAP
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ZONING MAP
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FLOOD MAP
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FAULT ZONE MAP
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IMPROVEMENT DESCRIPTION
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Overview The subject is a single-family home located in Vista, California. The improvements were constructed in 1985. The improvements total 810 square feet (SF) and are situated on a 2.2700-acre site (98,881 SF). The improvements are average quality and in below average condition. At the time of inspection, the subject was occupied by a tenant who will vacate at the close of escrow.

It should be noted that the improvements underutilize the site and no longer contribute to value above the land value. The site is zoned E-1 (Estates Residential) which allows for single family residence, accessory units/guest houses, agriculture and farming uses. There is currently a pending sale of the subject. The pending buyer is The City of Vista, who plans to demolish the current improvements and redevelop the property into a public park.

Size The following sources of size information were considered:

RealQuest/County record: 810 square feet
CRMLS: 810 square feet
Appraiser Measurements: Did not measure
Purchase Agreement: Not stated
Residential Building: 810 square feet
Foundation Concrete slab

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Framing/Exterior Walls Wood siding
Roof The roof was not inspected. No leaks were observed/reported.

Heating, Ventilation, & Air
Conditioning (HVAC) Gas
Insulation Assumed to be standard and to code for both walls and ceilings Lighting Fluorescent and Incandescent
Electrical Assumed adequate and to code
Interior Walls Drywall
Doors and Windows Standard windows and doors, glass in aluminum frames Ceilings Drywall
Plumbing Standard plumbing for a residential building
Floor Covering Carpet
Fire Protection None
Interior Finish/Build-Out Please note, we did not inspect the interior of the subject property. We have concluded that the improvements on the subject property is average quality and in below average condition. If this information is later determined to be incorrect, we reserve the right to change our opinion of value.

Site Improvements The lot is improved with an asphalt driveway and concrete pad. The remaining site is undeveloped.

Landscaping Low maintenance shrubs and grass.

Parking There are 4 garage parking spaces
Site Coverage Ratio 0.8% (810 SF footprint / 98,881 SF site).

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Deferred Maintenance Based upon the concluded highest and best use of the site, these items were not considered in our analysis.

Functional Design The building has a functional residential design with typical site coverage and adequate on-site parking. The overall functional design is rated as average.

ADA Comment This analysis assumes that the subject complies with all ADA requirements.

Please refer to the Assumptions and Limiting Conditions section.

Hazardous Materials A Phase I report was not provided. This appraisal assumes that the improvements are constructed free of all hazardous waste and toxic materials, including (but not limited to) unseen asbestos and mold. Please refer to the Assumptions and Limiting Conditions section regarding this issue.

Summary The information presented above is a basic description of the subject property improvements. This information is utilized in the valuation of the property.

Reliance has been placed upon information provided by the pending buyer (or buyer’s representative) and other sources deemed to be reliable. It is assumed that there are no hidden defects, and that all structural components are functional and operational. If questions arise regarding the integrity of the structure or its operational components, consult additional professional resources.

HIGHEST & BEST USE ANALYSIS
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The highest and best use of the subject property provides the foundation for the valuation section. Highest and best use is defined in the 7th edition of The Dictionary of Real Estate Appraisal (Appraisal Institute, Chicago, 2022), as follows:

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.

Highest and best use analysis uses the following steps for the subject:

Highest & Best Use As Vacant
Determination of the ideal improvements
Highest & Best Use As Improved
Conclusion of the Highest & Best Use
The analysis of highest and best use can be thought of as the logical end of a spectrum of market analysis procedures, running from the macroeconomic overview of a general market study, through more detailed marketability studies and analyses of financial feasibility, to the formal analysis of highest and best use. In theory, the highest and best use is commonly described as that reasonable and most profitable use that will support its highest present value. The highest and best use, or most profitable use, must be legally permissible, physically possible, financially feasible, and maximally productive.

This section develops the highest and best use of the subject property As-Vacant and As Improved.

AS-VACANT ANALYSIS
In this section, the highest and best use of the subject as-vacant is concluded after taking into consideration financial feasibility, maximal productivity, marketability, legal, and physical factors.

Legally Permissible
Private restrictions, zoning, building codes and environmental regulations are considered, if applicable to the subject site. The legal factors influencing the highest and best use of the subject site are primarily government regulations such as zoning ordinances. We are aware of no adverse private restrictions or environmental regulations. Permitted uses of the subject’s Estates Residential (E-1) include the following: Single family residence, accessory building/guest house, greenhouses, agricultural crops and animals. It should be noted that a zoning change to commercial is possible based on discussion with the city and new surrounding land uses.

Physically Possible
The test of what is physically possible for the subject site considers physical and locational characteristics that influence its highest and best use. In terms of physical features, the subject site totals 2.2700-acres (98,881 SF), it is irregular in shape and has a gentle slope topography. The site has above average exposure and average overall access. The subject property is within a commercial/residential location of Vista. This area is generally experiencing stable economic growth. Development immediately surrounding the subject includes residential and commercial developments. There are no physical limitations that would prohibit development of any of the by-right uses on the site.

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Financial Feasibility
Based on the analysis of the subject’s market and an examination of costs, a newly constructed land building is concluded to be financially feasible based on the supply and demand conditions presented in the Market Analysis section and the fact that speculative construction is taking place. Other legally permitted uses are also likely financially feasible.

Maximum Productivity
There is only one use that creates value and at the same time conforms to the requirements of the first three tests. Financial feasibility, maximal productivity, marketability, legal, and physical factors have been considered and the highest and best use of the subject site as-vacant is concluded to be a residential development as economic conditions warrant.

AS IMPROVED ANALYSIS
The legal factors influencing the highest and best use of the subject property are primarily governmental regulations such as zoning and building codes. The subject’s improvements were constructed in 1985 and appear to be a legal, conforming use. The physical and location characteristics of the subject improvements have been previously discussed in this report. The project is of average quality construction and in below average condition. Therefore, the property as improved, meets the physical and location criteria as the highest and best use of the property.

Alternative Uses
In addition to legal and physical considerations, analysis of the subject property as -improved requires consideration of alternative uses. The five possible alternative treatments of the property are:

Demolition – Demolition to make way for a new development may be an alternative given the property’s low site coverage, and considering the subject’s current improvements underutilize the site. As such, the highest and best use would be to raze the existing improvements and redevelop the site.

Expansion – Possible given the low site coverage; however, an analysis under this scenario is outside the scope of the assignment.

Renovation – This is not warranted, as the improvements are in below average condition and renovation may not be financially feasible.

Conversion – This is not applicable since the subject’s current zoning (Estates Residential, E-1) does not lend themselves well to an alternative use.

Continued Use As-Improved – At the present time, among the five alternative uses, demolition of the current improvements for redevelopment is the Highest and Best Use of the subject As Improved.

Buyer Profile
The most likely buyer would be a developer.

VALUATION METHODS
VANGUARD REALTY ADVISORS VRA-23591 39
The appraisal process, which is applied to most real estate properties, is designed to evaluate all factors that influence value. Regional and market area information has been presented to inform the reader of general outside influences that may affect value. In addition, the site and improvements have been described in detail.

The interaction of the site and improvements establishes the utility and desirability of the entire property. The Highest and Best Use section evaluates the effect of legal, physical, and market considerations that influence the use of the property. The following paragraphs discuss the various methods used to value the subject property.

Cost Approach
This approach is based upon the principle that the value of the property is significantly related to its physical characteristics, and that no one would pay more for a facility than it would cost to build a similar facility in today's market on a comparable site. This approach is not applicable due to the age of the improvements.

The exclusion of this approach is not detrimental to the credibility or reliability of the final value conclusion.

Sales Comparison Approach
This approach is based on the principle of substitution. This principle states that no one would pay more for the subject property than the value of similar property in the market. This approach analyzes sales of comparable properties with regard to the nature and condition of each sale. Comparisons are made for varying physical characteristics. This approach is meaningful and is developed to determine the site value of the subject.

Income Approach
The Income Approach is based on the premise that properties similar to the subject are income producing, and that investors purchase these properties based upon their income-producing ability. In the Income Approach, market rents for the subject property are estimated, the applicable operating expenses are deducted, and the resulting net income is capitalized into a value estimate. This method is known as Direct Capitalization. This approach is not applicable considering the subject property is being valued as land. The exclusion of this approach is not detrimental to the credibility or reliability of the final value conclusion.

Methods Developed
Based on the agreed upon scope with the client, the subject’s specific characteristics and the interest appraised, this appraisal developed the Sales Comparison Approach (Site Valuation). The values presented represent the As-Is Market Value (Fee Simple Interest) and Hypothetical Market Value Assuming Zoning Change to Commercial (C-1) (Fee Simple Interest) This appraisal does not develop the Cost or Income Approaches. The exclusion of these approaches is not detrimental to the credibility or reliability of the final value conclusion.

Analysis of Value Conclusions
The Sales Comparison Approach is used to value the subject property and will be correlated into final value opinions in the Analysis of Value Conclusions section.

SALES COMPARISON APPROACH (AS-IS)
VANGUARD REALTY ADVISORS VRA-23591 40
In the Sales Comparison Approach, the value of a property is estimated by comparing it with similar, recently sold properties in the surrounding or competing areas. Inherent in this approach is the principle of substitution, which holds that when a property is replaceable in the market, its value tends to be set by the cost of buying an equally desirable property, assuming that no costly delay occurs in making the substitution.

Through the analysis of sales of verified arm’s-length transactions, market value and price trends are identified.

The sales utilized are comparable to the subject in physical, functional, and economic characteristics.

Comparable Selection
Comparable sales are presented, which were selected due to their similarity in physical, locational, and qualitative attributes. They represent the best data available to the appraiser as of the date of this report.

Emphasis was given to the subject’s location and similarly positioned properties.

Unit of Comparison
The most relevant unit of comparison is the price PSF of site area. This best reflects the unit of comparison used by buyers and sellers in this market for the subject property type.

Adjustments
Adjustments to the comparable sales were considered and made when warranted for property rights transferred, conditions of sale, financing terms, expenditures after purchase, market conditions, location and other physical characteristics. These adjustments are explained later in this section.

Presentation
The comparable property attributes are presented on the following location map and datasheets. Following the datasheets is an adjustment grid, explanation of adjustments and conclusion for the subject.

SALES COMPARISON APPROACH (AS-IS) (CONTINUED)
VANGUARD REALTY ADVISORS VRA-23591 41

Residential Property
Comparable 1
Sale Information
Buyer Rishton J & J Living Trust
Seller Cassidy Family Trust
Sale Date 9/1/2022
Transaction Status Recorded
Sale Price $900,000 $20.66 /SF Land
Analysis Price $900,000 $20.66 /SF Land
Recording Number 350967
Rights Transferred Fee Simple
Financing Cash to seller
Conditions of Sale None
Marketing Time 5 days
Property
Land Area 1 Acres (43,560 SF)
Number of Parcels 1
Zoning E-1
Shape Rectangular
Topography Level to Sloping
Corner No
Density 1.0 Units/Acre
612 Matagual Drive
Vista, CA 92081
County
San Diego
Submarket
Vista
APN
164-241-04-00
Confirmation
Name CRMLS & Public Records
Remarks
This is the sale of a residential property located in Vista, CA. The property is zoned Estates Residential (E-1), which allows development of one single family residence per parcel. At the time of sale the property also had a 2,148 SF single family residence on the parcel. The property was sold 100,000 above the list price of $799,000.

Residential Development Site
Comparable 2
Sale Information
Buyer Kevin Chapin
Seller Mason Nona L Trust
Sale Date 2/14/2022
Transaction Status Recorded
Sale Price $359,000 $11.29 /SF Land
Analysis Price $359,000 $11.29 /SF Land
Recording Number 68345
Rights Transferred Fee Simple
Financing Cash to seller
Conditions of Sale None
Marketing Time 30 days
Property
Land Area 0.73 Acres (31,798 SF)
Number of Parcels 1
Zoning E-1
Shape Rectangular
Topography Level to Sloping
Corner No
Density 1.0 Units/Acre
1232 York Drive
Vista, CA 92084
County
San Diego
Submarket
Vista
APN
181-092-23-00
Confirmation
Name Winifred Wilcox
Company Winifred L Wilcox
Phone Number 951-522-1251
Affiliation Listing Broker
Remarks
This is the sale of a residential development site in Vista, CA. The property is zoned Estates Residential (E-1), which allows development of one single family residence per parcel. The property sold $10,000 above the asking price of $349,000. The listing broker stated at the time of sale there were no entitlements and an 800 SF garage on-site. The had plans to build two residential homes on the property for their personal use at the close of escrow. At the time of our inspection, the buyer were near completion of the improvements.

Residential Redevelopment Site
Comparable 3
Sale Information
Buyer Gregory D Mayer
Seller Eidsmoe Evans Trust
Sale Date 10/19/2022
Transaction Status Recorded
Sale Price $537,500 $9.64 /SF Land
Analysis Price $537,500 $9.64 /SF Land
Recording Number 0404263
Rights Transferred Fee Simple
Financing Cash to Seller
Conditions of Sale None
Marketing Time 118 days
Property
Land Area 1.28 Acres (55,757 SF)
Number of Parcels 1
Zoning R-1
Shape L-Shaped
Topography Level
Corner No
1059 Warmlands Ave
Vista, CA 92084
County
San Diego
Submarket
Vista
APN
174-162-23-00
Confirmation
Name CoStar, CRMLS & Public Records
Remarks
This is the sale of 1.28 acres of land in Vista, CA. The property sold to an investor/developer for 2% below the list price of $549,000. The site is zoned R-1. It is noted that the previous residence was reportedly fire damaged and the property was purchased for the land value and redevelopment of the site. There were no approvals/entitlements in-place at the time. No other sale conditions were reported. All information provided is from CoStar, CRMLS and public records.

Residential Development Site
Comparable 4
Sale Information
Buyer Dipaolo Stuart Residence
Seller Talamo Family Trust
Sale Date 12/7/2020
Transaction Status Recorded
Sale Price $420,000 $9.10 /SF Land
Analysis Price $420,000 $9.10 /SF Land
Recording Number 682367
Rights Transferred Fee Simple
Financing Cash to seller
Conditions of Sale None
Marketing Time 258 days
Property
Land Area 1.06 Acres (46,173 SF)
Number of Parcels 1
Zoning A-1
Shape Flag
Topography Sloping
Corner No
Density 1.0 Units/Acre
648 Altamira Court
Vista, CA 92081
County
San Diego
Submarket
Vista
APN
166-523-03-00
Confirmation
Name CRMLS & Public Records
Remarks
This is the sale of a residential development site in Vista, CA. The property was zoned Agricultural zone (A-1), which allows which allows development of one single family residence per acre. The property was sold approximately 10% below the asking price of $465,000.

Residential Property
Comparable 5
Sale Information
Buyer Randall & Howard M Burkholz
Seller Ruiz Family Trust
Sale Date 8/5/2022
Transaction Status Recorded
Sale Price $1,200,000 $11.98 /SF Land
Analysis Price $1,200,000 $11.98 /SF Land
Recording Number 319184
Rights Transferred Fee Simple
Financing Cash to seller
Conditions of Sale None
Marketing Time 11 days
Property
Land Area 2.3 Acres (100,188 SF)
Number of Parcels 1
Zoning E-1
Shape Trapezoid
Topography Level to Sloping
Corner No
Density 1.0 Units/Acre
1106 Lime Place
Vista, CA 92081
County
San Diego
Submarket
Vista
APN
169-100-57-00
Confirmation
Name CRMLS & Public Records
Remarks
This is the sale of a residential property with low site coverage in Vista, CA.

The property is zoned Estates Residential (E-1), which allows development of one single family residence per parcel. At the time of sale the property also had a 2,100 SF single family residence on the parcel. The property has frontage off of Lime as well as Mar Vista Drive. The property sold for 100,000 above the asking price $1,100,000.

Development Site
Comparable 6
Sale Information
Buyer TBD
Seller Refugio R Saldivar Revocable Trust
Transaction Status Pending
Sale Price $3,000,000 $16.13 /SF Land
Analysis Price $3,000,000 $16.13 /SF Land
Recording Number TBD
Rights Transferred Fee Simple
Financing TBD
Conditions of Sale Listing
Marketing Time 382 days
Property
Land Area 4.27 Acres (186,000 SF)
Number of Parcels 3
Zoning R-1
Shape Rectangular
Topography Level
Corner No
Density 1.0 Units/Acre
1310 Tylee Street
Vista, CA 92083
County
San Diego
Submarket
Vista
APN
162-232-30-00, 162-232-31-00,
162-232-39-00
Confirmation
Name Luis Saldivar
Company Optimal Loan To Home
Phone Number 951-203-0155
Affiliation Listing Broker
Remarks
This is the listing of a residential development site located in Vista, CA. The property consists of three contiguous parcels of raw vacant land. The property is zoned residence (R-1), which allows development of one single family residence per 10,000 SF parcel.

Residential Development Site
Comparable 7
Sale Information
Buyer TBD
Seller Paramount Development Properties
LLC
Transaction Status Listing
Sale Price $1,200,000 $8.89 /SF Land
Analysis Price $1,200,000 $8.89 /SF Land
Recording Number TBD
Rights Transferred Fee Simple
Financing TBD
Conditions of Sale Listing
Marketing Time 120 days
Property
Land Area 3.1 Acres (135,036 SF)
Number of Parcels 1
Zoning E-1
Shape Irregular
Topography Sloping
Corner No
Density 1.0 Units/Acre
Alta Vista Drive
Vista, CA 92084
County
San Diego
Submarket
Vista
APN
180-290-17-00
Confirmation
Name Alexandra M Bentley
Company Lee & Associates
Phone Number 760-579-8107
Affiliation Listing Broker
Remarks
This is the listing of a residential development site in Vista, CA. The property consists of raw vacant land. The property is zoned Estates Residential (E-1), which allows development of one single family residence per parcel.

SALES COMPARISON APPROACH (AS-IS) (CONTINUED)
VANGUARD REALTY ADVISORS VRA-23591 49
Adjustment Analysis
The comparables have been summarized on the previous data sheets. The comparables are now adjusted for major differences from the subject.

The adjustments are not intended to be exact measurements of the differences but an attempt to bracket the reasonable range of conclusions.

A grid outlining the adjustments applied to the comparables is provided below, followed by a brief description of the adjustm ents and adjustments considered:

SALES COMPARISON APPROACH (AS-IS) (CONTINUED)
VANGUARD REALTY ADVISORS VRA-23591 50
Property Rights Transferred
The comparables reflect similar property rights and require no adjustments.

Financing
All of the sale transactions were cash to seller, with no favorable financing. Therefore, no adjustments are necessary.

Sale Condition
None of the properties were foreclosed properties and all sales are believed to be arm’s length. However, Comparables 6 and 7 reflect listings rather than closed sales. As listings typically sell below the asking price, these comparables have been adjusted downward 5% for this condition. No other conditions of sale adjustments are needed.

Expenditures After Purchase
This reflects the expenses that the buyer incurs after purchase (deferred maintenance, HVAC repairs, etc.). No adjustments are warranted based on review of the sales.

Market Conditions (Time)
Based on research and interpretation of value trends, the analysis applies an upward market conditions adjustment of 3% annually reflecting the relatively consistent appreciation that occurred between the oldest comparable sale date up through the effective valuation date.

Site Size
The size adjustment considers significant differences in site size. All else being equal, smaller sites will sell at a higher price per square foot than larger sites. Comparables 1, 2, 3, 4, 6 and 7 are smaller/larger compared to the subject and are adjusted downward/upward by 5%-10% accordingly. No further adjustments were required.

Location, Access and Exposure
This adjustment is made for differences in location. Comparables 2, 3 and 7 have inferior locations and are adjusted upward by 5%. Comparables 1, 2, 3, 4 and 7 and have superior/inferior access and exposures and have been adjusted downward/upward by 5% accordingly. No further adjustments were required.

Shape
This adjustment accounts for differences in site shape. The subject has an Irregular site shape. Two of the comparables are Trapezoidal and L-Shaped, requiring no adjustments. Comparables 1, 2 and 6 have rectangular shapes and have been adjusted downwards by 5% for this superior feature. Comparable 4 is a Flag shape and has been adjusted upwards by 5%. No other adjustments are required.

Zoning
This adjustment accounts for differences in site zoning. The subject site is zoned Estates Residential (E-1) which allows for low density residential developments. All of the comparables have generally similar zoning and uses.

Therefore, no adjustments were required.

SALES COMPARISON APPROACH (AS-IS) (CONTINUED)
VANGUARD REALTY ADVISORS VRA-23591 51
Topography
This adjustment accounts for differences in topography. The subject site is sloping from south to north and west towards Hacienda Road and Matagual Drive. Three of the comparables reflect gentle sloping topography, requiring no adjustments. Comparable 4, 5 and 7 have more significant sloping topography; therefore, we have adjusted these comparables upwards by 5%-15%, accordingly. Comparable 3 is generally level and has been adjusted downwards by 5%. No other adjustments are required.

Entitlements
These adjustments are made for entitlements in-place at the time of sale. The subject did not have any entitlements at the time of inspection. None of the comparables have reported entitlements, therefore, no adjustments are required.

Improvements
These adjustments are made for significant improvements on the property at the time of sale. The subject has an older residential building which underutilizes the site. Comparable 1 has a 2,218 SF residential building in average condition with utility, therefore, this comparable has been adjusted downwards by 30% for this superior condition. Comparables 2 and 5 have improvements similar to the subject and did not appear to impact the overall price. Therefore, no further adjustments were required.

Land Sales Summary & Conclusion
The comparable land sales indicate an overall unadjusted value range from $8.89 to $20.66 PSF, and average of $12.53 PSF. After adjustments, the comparables indicate a narrower range for the subject site between

9.88 and $15.32 PSF with an average of $12.37 PSF.

Based on the subject’s overall locational and physical features, a unit value conclusion of $14.00 PSF is supported. This places most weight on Comparables 1, 5 and 6 as they are the most similar in utility and or required the least amount of net/gross adjustments. As noted previously, there is a pending sale of the subject for $2,150,000. This equates to $21.74 PSF, which is higher than our concluded value of $1,385,000 or $14.00 PSF.

SALES COMPARISON APPROACH (AS-IS) (CONTINUED)
VANGUARD REALTY ADVISORS VRA-23591 52
The following table summarizes the comparable land sales analysis and applies the unit value conclusion to the site area to provide an indication of the as-is land value.

Please note that demolition costs were not deducted as the current improvement have utility in the short-term and can be rented while plans/entitlements can be obtained, which would offset each other.

SALES COMPARISON APPROACH TWO (CONTINUED)
VANGUARD REALTY ADVISORS VRA-23591 53

SALES COMPARISON APPROACH TWO INTRODUCTION
A second Sales Comparison Approach section is presented in this case to reflect the subject’s as-if market value. This is based on the hypothetical condition that the current zoning Estates Residential is changed to Commercial (C-1) zoning. The value indication of this this secondary approach will reflect the subject property under this scenario. The same methodology as the first Sales Comparison Approach scenario applies but with a differing set of land sale comparables. Through the analysis of sales of verified arm’s-length transactions, market value and price trends are identified. The sales utilized are comparable to the subject in physical, functional, and economic characteristics.

Comparable Selection
Comparable sales are presented, which were selected due to their similarity in physical, locational, and qualitative attributes. They represent the most recent and relevant comparable sale available for this analysis.

Emphasis was given to the subject’s location and similarly positioned properties.

Unit of Comparison
The most relevant unit of comparison is the price PSF of rentable area. This best reflects the unit of comparison used by buyers and sellers in this market for the subject property type.

Adjustments
Adjustments to the comparable sales were considered and made when warranted for expenditures after purchase, property rights transferred, conditions of sale, financing terms, market conditions, location and other physical characteristics. These adjustments are explained later in this section.

Presentation
A location map and comparable photographs are provided on the following pages. Following the photographs is presentation of the comparables, adjustment grid, explanation of adjustments and conclusion for the subject under this scenario.

SALES COMPARISON APPROACH TWO (CONTINUED)
VANGUARD REALTY ADVISORS VRA-23591 54

SALES COMPARISON APPROACH TWO (CONTINUED)
VANGUARD REALTY ADVISORS VRA-23591 55

LAND SALES PHOTOGRAPHS

SALES COMPARISON APPROACH TWO (CONTINUED)
VANGUARD REALTY ADVISORS VRA-23591 56
Adjustment Analysis
The comparables have been summarized on the previous data sheets. The comparables are now adjusted for major differences from the subject. The adjustments are not intended to be exact measurements of the differences but an attempt to bracket the reasonable range of conclusions. A grid outlining the adjustments applied to the comparables is provided below, followed by a brief description of the adjustments and adjustments considered:

SALES COMPARISON APPROACH TWO (CONTINUED)
VANGUARD REALTY ADVISORS VRA-23591 57
Property Rights Transferred
The comparables reflect similar property rights and require no adjustments.

Financing
All of the sale transactions were cash to seller, with no favorable financing. Therefore, no adjustments are necessary.

Sale Condition
None of the properties were foreclosed properties and all sales are believed to be arm’s length. However, Comparable 4 is a listing rather than closed sale. As listings typically sell below the asking price, these comparables have been adjusted downward 5% for this condition. No other conditions of sale adjustments are needed.

Expenditures After Purchase
This reflects the expenses that the buyer incurs after purchase (deferred maintenance, HVAC repairs, etc.). No adjustments are warranted based on review of the sales.

Market Conditions (Time)
Based on research and interpretation of value trends, the analysis applies an upward market conditions adjustment of 3% annually reflecting the relatively consistent appreciation that occurred between the oldest comparable sale date up through the effective valuation date.

Site Size
The size adjustment considers significant differences in lot size. All else being equal, smaller lots will sell at a higher price per square foot than larger lots. All of the comparables are generally similar-scale lots and require no adjustment.

Shape
This adjustment accounts for differences in site shape. The subject has a trapezoid site shape. All of the comparables are generally similar shapes, requiring no adjustments.

Zoning
This adjustment accounts for differences in site zoning. Under this hypothetical scenario we have assumed the zoning of the subject will be commercial (C-1) zoning. All of the comparables have similar commercial zoning designations or uses. Therefore, no adjustments are required.

Topography
This adjustment accounts for differences in topography. The subject site is sloping from south to north and west towards Hacienda Road and Matagual Drive. All of the comparables have generally level topography and have been adjusted downwards by 5% to address this superior feature.

Entitlements
These adjustments are made for entitlements in-place at the time of sale. The subject does not have any entitlements at the time of inspection. None of the comparables have reported entitlements, therefore, no adjustments are required.

SALES COMPARISON APPROACH TWO (CONTINUED)
VANGUARD REALTY ADVISORS VRA-23591 58
Sales Summary & Conclusion
The comparable land sales indicate an overall unadjusted value range from $21.20 to $28.10 PSF, and average of $25.30 PSF. After adjustments, the comparables indicate a narrower range for the subject site between

20.50 and $26.70 PSF with an average of $12.37 PSF.

Based on general bracketing, the comparable sales support an adjusted unit value range from $20.50 PSF to

26.70 PSF, with a unit value of $24.50 PSF concluded for the subject property. This conclusion generally places most weight on the adjusted average and median prices of the Comparables.

The following table summarizes the analysis of the comparables, reports the reconciled price per SF value conclusion, and presents the concluded value of the subject property by the Sales Comparison Approach.

Please note that demolition costs were not deducted as the current improvement have utility in the short-term and can be rented while plans/entitlements can be obtained, which would offset each other.

RECONCILITIATION OF VALUE CONCLUSIONS
VANGUARD REALTY ADVISORS VRA-23591 59
Based on the agreed upon scope with the client, the subject’s specific characteristics and the interest appraised, this appraisal developed the Sales Comparison Approach (Site Valuation). The values presented represent the As-Is Market Value (Fee Simple Interest) and Hypothetical Market Value Assuming Zoning Change to Commercial (C-1) (Fee Simple Interest).

The Reconciliation of Value Conclusions is the final step in the appraisal process and involves the weighing of the individual valuation techniques in relationship to their substantiation by market data, and the reliability and applicability of each valuation technique to the subject property. Below, the individual strengths and weaknesses of each approach are analyzed.

Cost & Income Approaches
These approaches are not applicable given the subject’s highest and best use as a redevelopment site.

Sales Comparison Approach
The Sales Comparison Approach is based on a comparison of similar properties that have sold recently in the subject’s market. A comparative analysis of the sale price per square foot was used in the Sales Comparison Approach. The strength of this approach depends on the quality and comparability of the market data. The more reliable the comparable sales data, the more accurate the value estimate. This approach contained good samples of data, with recent sales of similar-scale sites in the subject's submarket and similar areas of the market. This approach also best reflects the analysis a developer would perform, which is the most likely buyer of the subject. Therefore, this approach is given sole weight.

Reconciliation
After considering all factors relevant to the valuation of the subject property, with sole weight placed on the Sales Comparison Approach, the final value opinions are as follows:

CERTIFICATION
VANGUARD REALTY ADVISORS VRA-23591 60
We certify that, to the best of my knowledge and belief:

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

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

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

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

The appraisal was completed without regard to race, color, religion, national origin, sex, marital status or any other prohibited basis, and will not contain references which could be regarded as discriminatory.

This appraisal assignment was not based on a requested minimum valuation, a specific valuation, or the approval of a loan.

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

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

Our 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, and the Uniform Standards of Professional Appraisal Practice, as set forth by the Appraisal Standards Board of the Appraisal Foundation.

Matthew K. Reynolds, MAI, and Russell W. McCoy, MAI, have not made a personal interior and exterior inspection of the property that is the subject of this report.

Thaison Tran provided significant real property appraisal assistance to the appraisers signing this certification, including verifying sale comparables and interviewing brokers. It is noted that Thaison Tran also photographed and inspected the subject property. All parties conducted assistance under the direct supervision of the appraiser's signing this report in compliance with State regulations.

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

This appraisal was prepared in conformance with the requirements of the State of California and the client.

CERTIFICATION (CONTINUED)
VANGUARD REALTY ADVISORS VRA-23591 61
The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. As of the date of this report, Matthew K. Reynolds, MAI, and Russell W. McCoy, MAI, have completed the continuing education program of the Appraisal Institute.

Matthew K. Reynolds, MAI Russell W. McCoy, MAI
Certified General Real Estate Appraiser Certified General Real Estate Appraiser State of California License #AG041942 State of California License #AG028414

ASSUMPTIONS & LIMITING CONDITIONS
VANGUARD REALTY ADVISORS VRA-23591 62
It is noted that the use of an extraordinary assumption and/or hypothetical condition may have affected the assignment results. This appraisal is subject to the following assumptions and limiting conditions:

Extraordinary Assumptions
The use of an extraordinary assumption(s) may have impacted the results of the assignment. Based on the scope of our report, an interior inspection was not conducted. We have assumed the property is in below average condition and average quality based on exterior inspection. Further, we have relied on information provided by the client as well as from public records as it relates to building size, year of construction, land size, and other physical characteristics. We have assumed that the condition/quality of the property and information provided by public records are accurate. If this information is later determined to be incorrect, we reserve the right to amend the report and/or change the value opinion.

Hypothetical Conditions
The use of a hypothetical condition(s) may have impacted the results of the assignment. The Market Value Assuming Zoning Change to Commercial (C-1) is a hypothetical condition as it assumes a zoning change as of the date of inspection.

General Assumptions and Conditions
The legal description provided has not been compared with the assessor's records. The analysis assumes that this description accurately represents the subject property. A survey has not been provided to the appraiser. If further verification is required, a survey by a registered surveyor is advised.

Site area and building area estimates are based on the appraiser’s inspection, data provided by the owner/client and public record. Square footage figures are approximate but considered sufficient for appraisal purposes. If the square footage estimates were sufficiently different, it could affect the value estimate. In cases where accurate measurements could not be obtained, owner/client -provided data and public records are relied upon. If the client requires more certainty, the services of an independent surveyor or the like should be considered. We reserve the right to change our opinion of value if better size data is later provided.

It is assumed that the subject property is in compliance with all applicable federal, state and local laws, ordinances, regulations, building standards, use restrictions and zoning unless the lack of compliance is stated in the appraisal report. Determining and reporting on such compliance were not part of the scope of work for this assignment.

It is assumed that all water, sewer facilities and utilities (whether existing or proposed) are or will be in good working order, are safe for use, and are or will be sufficient to serve the current or proposed uses of the subject property or any structures or other improvements. Determining and reporting on such matters were not part of the scope of work for this assignment.

All facts and data set forth in this report are true and accurate to the best of the appraiser's knowledge and belief. The appraisal is based upon the assumption that data which is of public record or which has been secured through interviews with owners, agents or other informed persons is true and correct. The

ASSUMPTIONS & LIMITING CONDITIONS (CONTINUED)
VANGUARD REALTY ADVISORS VRA-23591 63
appraisers reserve the right to make appropriate revisions in the event of discovery of additional or more accurate data.

The appraiser reserves the right to make such adjustments to the analyses, opinions and conclusions set forth in this report as may be required by consideration of additional data or more reliable data that may become available.

We assume no responsibility for matters legal in character, nor do we render any opinion as to title, which is assumed to be marketable. All existing liens, encumbrances, and assessments have been disregarded, unless otherwise noted, and the property is appraised as though free and clear, under responsible ownership, and competent management.

The exhibits in this report are included to assist the reader in visualizing the property. We have made no survey of the property and assume no responsibility in connection with such matters.

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

The appraisers assume no responsibility for determining if the property requires environmental approval by the appropriate governing agencies, nor if it is in violation thereof, unless otherwise noted herein.

Information presented in this report has been obtained from reliable sources, and it is assumed that the information is accurate.

This report shall be used for its intended purpose only, and by the party to whom it is addressed.

Possession of this report does not include the right of publication.

The appraisers may not be required to give testimony or to appear in court by reason of this appraisal, with reference to the property in question, unless prior arrangements have been made, therefore.

The statements of value and all conclusions shall apply as of the dates shown herein.

The appraisers have no present or contemplated future interest in the property which is not specifically disclosed in this report.

Neither all, nor any part of, the contents of this report shall be conveyed to the public through advertising, public relations, news, sales, or other media without the written consent or approval of the authors. This applies particularly to value conclusions and to the identity of the appraisers and the firm with which he or she is connected.

This report must be used in its entirety. Reliance on any portion of the report independent of others may lead the reader to erroneous conclusions regarding the property values. No portion of the report stands alone without approval from the authors.

ASSUMPTIONS & LIMITING CONDITIONS (CONTINUED)
VANGUARD REALTY ADVISORS VRA-23591 64
The valuation stated herein assumes professional management and operation of the buildings throughout the lifetime of the improvements, with an adequate maintenance and repair program.

The appraisers are not qualified to detect the presence of toxic or hazardous substances or materials which may influence or be associated with the property or any adjacent properties, has made no investigation or analysis as to the presence of such materials, and expressly disclaims any duty to note the degree of fault. Vanguard Realty Advisors, LLC, and its principals, agents, employees, shall not be liable for any costs, expenses, assessments, or penalties, or diminution in value, property damage, or personal injury (including death) resulting from or otherwise attributable to toxic or hazardous substances or materials, including without limitation hazardous waste, asbestos material, formaldehyde, or any smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids, solids or gasses, waste materials or other irritants, contaminants or pollutants.

The appraisers assume no responsibility for determining if the subject property complies with the Americans with Disabilities Act (ADA). Vanguard Realty Advisors, LLC, its principals, agents, and employees, shall not be liable for any costs, expenses, assessments, penalties or diminution in value resulting from non-compliance. This appraisal assumes that the subject meets an acceptable level of compliance with ADA standards; if the subject is not in compliance, the eventual renovation costs and/or penalties would negatively impact the present value of the subject. If the magnitude and time of the cost were known today, they would be reduced from the reported value conclusion.

An on-site inspection of the subject property was conducted. No evidence of asbestos materials on-site was noted. A Phase 1 Environmental Assessment was not provided for this analysis. This analysis assumes that no asbestos or other hazardous materials are stored or found in or on the subject property. If evidence of hazardous materials of any kind occur, the reader should seek qualified professional assistance. If hazardous materials are discovered and if future market conditions indicate an impact on value and increased perceived risk, a revision of the concluded values may be necessary.

The appraisers are not experts in estimating insurable value for insurance policy purposes. If this appraisal contains an insurable value or replacement cost new estimate, it is provided only as a courtesy for the client. Such estimates are based solely on the Marshall Valuation Cost Estimation Manual and should not be relied upon for purposes of insurance underwriting.

A detailed soils study was not provided for this analysis. The subject's soils and sub-soil conditions are assumed to be suitable based upon a visual inspection, which did not indicate evidence of excessive settling or unstable soils. No certification is made regarding the stability or suitability of the soil or sub- soil conditions.

The liability of Vanguard Realty Advisors, LLC, its principals, agents, and employees is limited to the client and only up the amount of the fees actually collected by Vanguard Realty Advisors, LLC, in conjunction with this assignment. Further, there is no accountability, obligation, or liability to any third party. If this report is placed in the hands of anyone other than the client, the client shall make such party aware of all limiting conditions and assumptions of the assignment and related discussions. The appraisers are in no way responsible for any costs incurred to discover or correct any deficiency in the property.

ADDENDA
VANGUARD REALTY ADVISORS VRA-23591 65
A. Engagement Letter
B. Qualifications of Appraiser(s) and Appraiser License(s)

Addenda Item A

PROFESSIONAL SERVICE AGREEMENT
Project Two Single-Family Homes
Location : 1) 1800 Monte Vista Drive, Vista, CA 92084 (APN: 181-022-05-00) 2) 536 Matagual Drive, Vista , CA 92081 (APN : 164-241-42-00) Intended Use and User The intended use of the appraisals is to assist the client with internal business decisions related to a of the Appraisals : potential purchase of the properties from the current ownership . The intended user is The City of Vista .

Property Rights
Appraised:

Assumptions &
Limiting Conditions :

Presentation:

Professional Fee :

Consultation :

Retainer:

Terms :

Delivery:

Modification or
Cancellation:

Fee Simple
The appraiser(s) may not be required to give testimony or to appear in court by reason of these appraisals , with reference to the property in question , unless prior arrangements have been made .

A full copy of Vanguard Realty Advisors, LLC's additional Assumptions & Limiting Conditions is available upon request.

Appraisal Reports 1 PDF copy via email will be prepared in accordance with the Appraisal Institute, FIRREA (if applicable) and USPAP. The scope of the reports will include : all applicable approaches. The reports will present the as-is market values as of our date of inspection . A copy of the Assumptions and Limiting Conditions, which appear in the reports, is available upon request. 8,000 {$4,000 each)
Please send check to our Corporate Office below:

Vanguard Realty Advisors
Attn: Accounting Department
61061nnovation Way
Carlsbad, CA 92009
Note: To pay using a wire transfer or credit card, please email Jason 0. Sims at [email protected] to request a secured payment link.

The above fee includes one hour of consultation. Add itional consultation with client or client's representatives will be billed at the hourly rate of $300. 0 Accounts which are 60 days overdue will accrue a late payment charge of 1.5% per month, compounded monthly. In the event that either party commences any legal action relating to the provis ions of the Agreement, including collection, the prevailing party shall be entitled to its actual attorney's fees and costs, including those incurred upon appeal. This agreement shall be governed by and construed in accordance with the laws of the State of CA, and the venue of any action arising from this agreement shall be in San Diego County, CA.

August 25, 2023 for 536 Matagual Drive and August 30, 2023 for 1800 Monte Vista Drive Any changes in the assignment will be mutually agreed upon, in writing, and the fee set forth above will be adjusted accordingly, if necessary. If the assignment is cancelled, for any reason, prior to completion, for all time expended prior to cancellation, the client will be billed at the rate of $300 per hour. If the client delays com pletion of the assignment beyond 90 days, the fee will be renegotiated .

Addenda Item B

QUALIFICATIONS OF RUSSELL W. MCCOY, MAI

PRINCIPAL VANGUARD REALTY ADVISORS, LLC

COMMERCIAL REAL ESTATE VALUATION & ADVISORY SERVICES
Tax ID# 45-2191855
6106 Innovation Way, Carlsbad, CA 92009
760) 707-5732 – direct
[email protected]
www.vracommercial.com
Mr. McCoy began his appraisal career in December 1998 and has been appraising commercial real estate in Southern California since January 2001. He has appraised nearly every property type and concentrated primarily on office, retail, industrial, lodging, commercial land, mixed-use projects, and apartments. Some notable properties appraised include the following:

Pacific Center, High-Rise Office, San Diego
550 South Hope, High-Rise Office, Los Angeles
Manulife Plaza, High-Rise Office, Los Angeles

2.5-Acre Redevelopment Site, Newport Beach
Yosemite Resort Site, Fish Camp
Burbank Town Center, Burbank
Ocean Palms Beach Resort, Carlsbad
La Costa Resort Site, Carlsbad
La Jolla Plaza, High-Rise Office, San Diego
6300 Wilshire, High-Rise Office, Los Angeles
Plaza At Arboretum, Class A Apt, Santa Monica

1.6 Million Square Foot Dist. Warehouse, Perris
Queen Mary Moorage Leasehold, Long Beach
Desert Crossing Shopping Center, Palm Desert
Casa Madrona Hotel, Sausalito
Sorrento Science Park, San Diego
Mr. McCoy became an MAI member of the appraisal institute in 2007 and has held various positions at PGP Valuation. In the most recent position, Mr. McCoy produced appraisals and performed review assignments in connection with the appraisal order and review platform for the FDIC. While headquartered in Southern California since 2001, Mr. McCoy has performed assignments in numerous other states (Arizona, Utah, Oregon, Colorado, Idaho, Texas, Georgia, Florida, North Carolina, Virginia and Ohio). Mr. McCoy has also performed expert witness testimony for bankruptcy and arbitration hearings.

Education
Graduate: Utah State University, Logan, Utah
Bachelor of Science in Finance, minor in Accounting
Real estate courses & seminars sponsored by the Appraisal Institute:

Course 120, Appraisal Procedures
Course 310, Basic Income Capitalization
Course 410, National Uniform Standards of Appraisal Practice Course 420, Business Practices & Ethics
Course 510, Advanced Income Capitalization
Course 520, Highest & Best Use and Market Analysis
Course 530, Advanced Sales Comparison and Cost Approaches Course 540, Report Writing and Valuation Analysis
Course 550, Advanced Applications

The Appraiser as an Expert Witness: Preparation & Testimony Uniform Appraisal Standards for Federal Land Acquisitions Other related education:

Passed comprehensive exam for MAI designation in February 2005 Real Estate Experience
Position Company
Principal Vanguard Realty Advisors, LLC
6106 Innovation Way
Carlsbad, CA 92009
Valuation Services Director PGP Valuation, Inc.
2001 to 2011)
5796 Armada Dr, Ste A
Carlsbad, CA 92008
Real Estate Appraiser Jorgensen Appraisal (1999-2000)
9677 South 700 East, Ste C
Sandy, UT 84070
Other Professional References
Todd Liebow, MAI
Valuation Forensics Group
503) 349-5200
Mark Lawwill, MAI
Colliers International
360) 823-5264
Tonnie Blinks
Sunrise Mortgage
619) 298-9775
Donald L. Johnson, MAI
Wells Fargo Bank
770) 319-5237
Richard Walcott
Rabobank
916) 878-4812
David E. Pietka, MAI
Pietka Consulting, Inc.
503) 206-1071
Jim Towers
Review Appraiser
909) 335-1735
Marshall Meager, MAI
Wells Fargo Bank
916) 787-9371
Lisa Kimbro, MAI John M. Romney, MAI
Union Bank Zions First National Bank
714) 565-5618 (801) 844-7336
Professional Organizations
MAI - Appraisal Institute, Designation #12467 (June 25, 2007) – Account #403951

QUALIFICATIONS OF MATTHEW K. REYNOLDS, MAI

PRINCIPAL VANGUARD REALTY ADVISORS, LLC

COMMERCIAL REAL ESTATE VALUATION & ADVISORY SERVICES
6106 Innovation Way, Carlsbad, CA 92009
760) 855-3959 – direct/mobile
[email protected]
www.vracommercial.com
Matthew K. Reynolds, MAI, began appraising in 2003 with PGP Valuation. In 2006, PGP Valuation was acquired and became Colliers International. He has worked in various offices (Los Angeles, San Diego, Newport Beach, Carlsbad) throughout California for Colliers International. He has appraised nearly every property type and concentrated on office, retail, industrial, hospitality, commercial, land, mixed-use projects, apartments, and more. In addition to these property types, Mr. Reynolds has developed a specialty expertise on the valuation of single-tenant, build-to-suit net leased (NNN) properties across the nation.

In May 2011, Mr. Reynolds along with Russell W. McCoy, MAI, formed Vanguard Realty Advisors with the genuine desire to provide exceptional analysis and commercial appraisal services while adhering to the highest standards of customer service, quality, and attention to detail. Mr. Reynolds takes pride in building strong client relationships with an impeccable work product and considerable industry knowledge as the foundation. Other specialty expertise for Mr. Reynolds includes performing external outside appraisal reviews for banks and lenders throughout the country and providing fractional interest appraisals.

Currently, Vanguard Realty Advisors has grown to have over +10 appraisers on staff and is considered one of the most active and largest independent (not affiliated with any brokerage/property management) commercial appraisal firms in Southern California and performs over +1,200 appraisal assignments annually.

In addition, Vanguard Realty Advisors has grown to have multiple office locations and are in several states.

Real Estate Experience
Company: Vanguard Realty Advisors
Position: Principal
Duration: May 2011 to Present
Company: PGP Valuation / Colliers International
Position: Appraiser/Senior Appraiser
Duration: October 2003 to May 2011
Professional Affiliation & Accreditations
Member – Appraisal Institute
State Certifications
California Certified General Real Estate Appraiser License (AG 041942)

QUALIFICATIONS OF MATTHEW K. REYNOLDS, MAI
Education
Graduate: California State University, San Marcos (CSUSM) Bachelor of Science in Business Administration with an emphasis in Finance Select Real estate courses & seminars provided by the Appraisal Institute: Course 410, National Uniform Standards of Appraisal Practice
Course 420, Business Practices & Ethics
Course 510, Advanced Income Capitalization
Course 520, Highest & Best Use and Market Analysis
Course 530, Advanced Sales Comparison and Cost Approaches Course 540, Report Writing and Valuation Analysis
Course 550, Advanced Applications
The Appraiser as an Expert Witness: Preparation & Testimony National USPAP Course (15-hour & 7-hours updates)
Capstone Program
Evaluating Commercial Leases: The Tenant and Terms Both Matter IRS Valuation Symposium – Valuation of Donated Real Estate, Including Conservation Easements and Other IRS Valuation Assignments
Supervisory Appraiser/Trainee Appraiser Course
Allocating Components in Going Concern Approach
Other Select Real estate courses & seminars provided by McKissock:

Advanced Hotel Appraising – Full Service Hotels
Appraisal of Fast Food Facilities
Appraisal of Self-Storage Facilities
Introduction to Expert Witness Testimony
Select Notable Appraisal Assignments
College Manor Apartments, SDSU Student Housing Project, San Diego Renaissance Towers, High-Rise Apartments, Downtown Los Angeles Extra Space Self-Storage Portfolio, Various States
Barker Block, Large Condominium Project, Arts District of Downtown Los Angeles Ramona Terrace Estates Mobile Home Park (MHP), Ramona
The Metropole Building, Historic Building, San Jose
Sunset & Vine, Large Mixed-Use Project, Hollywood
Large Industrial/Office Park (Heritage Corporate Center), 727,679 SF, Santa Fe Springs Terraces at Paseo Colorado, 391-Unit Apartment, Pasadena Former Howard Hughes Residence & Headquarters, Hollywood Entire city block along Harrison Street in Chinatown in Oakland