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2017 Appraisal Report - Hwy 111 Marriott Residence Inn APN: 660-020-053APPRAISAL REPORT Prepared for CITY OF LA QUINTA 78-495 Calle Tampico La Quinta, California 92253 Date of Report June 19, 2017 MARKET VALUE STUDY CITY -OWNED LAND PARCEL APN: 660-020-053 LA QUINTA, CALIFORNIA Effective Date of Appraisal June 14, 2017 Prepared by Scott A. Lidgard, MAI, CCIM LIDGARD AND ASSOCIATES, INC. 2592 North Santiago Boulevard Orange, California 92867-1862 Report Reference No. 8034 LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS i� June 19, 2017 City of La Quinta 78-495 Calle Tampico La Quinta, California 92253 Attention: Gilbert Villalpando Business Analyst Subjects Market Value Study City -Owned Land Parcel APN: 660-020-053 La Quinta, California 2592 North Santiago Bouh Orange, California 92867- (714) 633-8441 or (562) 986 scott@lidgardinc.com In accordance with your request and authorization, I have completed an appraisal study of the above -referenced property on behalf of the client indicated above. The valuation study consisted of (1) an inspection of the subject property from the adjacent rights -of -way, (2) a review of public records, (3) the research and collection of comparable market data in the immediate and general subject market area, (4) a valuation employing applicable methodology based on an analysis of the comparable market data, and (5) preparation of this formal narrative appraisal report in summation of the activities outlined above. The subject property consists of a vacant land parcel located on the south side of Highway 1 1 1, beginning 275± feet east of Dune Palms Road, within the City of La Quinta. The site has a slightly irregular land configuration, effectively level topography, and contains 9.43± acres, or 410,771± square feet of land area. The property is zoned for, and has a highest and best use of, commercial development. The purpose of this appraisal study is to express an estimate of market value of/ the unencumbered fee simple interest in the subject land parcel based on itS highest and best use. Market value as defined in Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) is defined as follows: Continued . . . LIDGARD AND ASSOCIATES INCORPORATED Real Estate Appraisal and Consultation City of La Quinta Attention: Gilbert Vill,- andb`- Business Analyst June 19, 2017 Page 2 "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." The intended use of this appraisal report is to assist the City of La Quinta in potential sale negotiations with a private development. Intended users are City officials, along with consultants thereof, for the explicit purpose indicated above. This report is not intended to be distributed to, or relied upon by, third parties. After considering the various factors which influence value, the market value of the subject property, as of June 14, 2017, is as follows: FOUR MILLION ONE HUNDRED THOUSAND DOLLARS $4,100,000. This appraisal complies with the reporting requirements set forth in the Uniform Standards of Professional Appraisal Practice, under Standard Rule 2-2(a). This report contains a moderate level of detail with respect to the market data, appraisal methodology, and reasoning supporting the analysis, opinions, and conclusions. It contains sufficient information for the purpose, intent, client and users for which it is written. LIDGARD AND ASSOCIATES INCORPORATED Real Estate Appraisal an.rl Consultation City of La Quinta Attention: Gilbert Villalpando Business Analyst June 19, 2017 Page 3 Three copies of this appraisal report are submitted herewith along with an electronic version submitted via email; I have retained a file copy. Please do not hesitate to contact the undersigned in the event you require additional information from our file. Very truly yours, LIDGARDANEI'l Scott ard,lmA CCEM t'nified General Real Estate Appraiser California Certification No. AG 004014 Renewal Date: March 13, 2018 SAL:sp LIDGARD AND ASSOCIATES INCORPORATED l Real Estate Appraisal and Consultation TABLE OF CONTENTS Title Page Letter of Transmittal Table of Contents PREFACE Executive Summary Location Map Date of Value Purpose of the Appraisal Intent and Users of the Appraisal Property Rights Appraised Appraiser's Certification Scope of the Appraisal Assumptions and Limiting Conditions Terms and Definitions SUBJECT PROPERTY DESCRIPTION Apparent Vestee Property Address Legal Description Plat Map Site Description Existing Improvements Assessment Data Ownership History Neighborhood Environment VALUATION ANALYSIS Highest and Best Use Analysis Valuation Methods Sales Comparison Approach Final Estimate of Market Value Exposure Time MARKET DATA Summary of Commercial Land Value Indicators Market Data Location Map Commercial Land Sales Data and Photographs LIDOARD AND ASSOCIATES APPRAISERS -CONSULTANTS I i j I EXECUTIVE SUMMARY PURPOSE OF APPRAISAL: Market value of the subject land parcel based on its highest and best use. CLIENT IDENTIFICATION: City of La Quinta PROPERTY ADDRESS: No situs address; property located in La Quinta, California APPARENT VESTEE. City of La Quinta SITE DESCRIPTION: Land area: 9.43± acres, per Assessor's records and map- ping, or 410,771± square feet. Land shape: Slightly irregular land configuration. Zoning: CR (regional commercial). Soil contamination None known or observed by appraiser, howev- er, a comprehensive soil study was not provid- ed for review. The subject property has been appraised herein as though free of soil contam- inants, if any. Present use: Vacant land. Highest and best use: Commercial development. Assessor's No.: 660-020-053 EXISTING IMPROVEMENTS: There are no building or other on -site im- provements located within the boundaries of the subject property having significant mone- tary value in a highest and best use context. DATE OF VALUE: June 14, 2017 DATE OF REPORT: June 19, 2017 VALUATION ANALYSIS: Sales Comparison Approach: $4,100,000. Cost -Summation Approach: Not applicable. Income Capitalization Approach: Not applicable. LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS 1 EXECUTIVE SUMMARY (Continued) RECONCILIATION: Inasmuch as the subject property consists of a vacant land parcel, the Sales Comparison Ap- proach, as applied to land value, is the only ap- proach considered applicable in the subject case. FINAL ESTIMATE OF VALUE: $4,100,000. LIDGARD AND ASSOCIATES APPRAI S ERS-CONSULTANTS w LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS 11 I DATE 0F VA_U E The date of value employed in this report, and all opinions and computations expressed herein, are based on June 14, 2017, said date being generally concurrent with the inspection of the subject property and valuation analysis process. PURPOSE OF THE APPRAISAL The purpose of this appraisal report is to express an estimate of the unen- cumbered fee simple market value of the subject property, absent any liens, leases, or other encumbrances, as of the date of value set forth above. The definition of market value is set forth in the following portion of this section following the heading "Definition of Market Value". Further, it is the purpose of this appraisal report to describe the subject property, and to render an opinion of the highest and best use based on (1) the character of existing and potential development of the property ap- praised, (2) the requirements of local governmental authorities affecting the subject property, (3) the reasonable demand in the open market for proper- ties similar to the subject property, and (4) the location of the subject proper- ty considered with respect to other existing and competitive districts within the immediate subject market area. Further, it is the purpose of this appraisal report to provide an outline of cer- tain factual and inferential information which was compiled and analyzed in the process of completing this appraisal study. INTENT AND USERS OF APPRAISAL The intended use of this appraisal report is to assist the City of La Quinta in potential sale negotiations with a private development. Intended users are City officials, along with consultants thereof, for the explicit purpose indicated above. This report is not intended to be distributed to, or relied upon by, third parties. PROPERTY RIGHTS APPRAISED The property rights appraised herein are those of the unencumbered fee simple interest. Fee simple is defined in the 12`h Edition of The Aporaisal of Real Estate, as, "Absolute ownership by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, em- inent domain, police power, and escheat." _. LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS 3 CERTIFICATION The undersigned does hereby certify, except as otherwise noted in this ap- praisal report, that: I have personally inspected the subject property from the adjacent rights -of - way; I have no present or contemplated future interest in the real estate which is the subject of this appraisal report. Also, I have no personal interest or bias with respect to the subject matter of this appraisal report, or the parties in- volved in this assignment. My engagement in this assignment, and the amount of compensation, are not contingent upon the reporting or development of pre -determined values or di- rection in value that favors (1) the cause of the client, (2) the amount of the value opinion, (3) the attainment of predetermined/stipulated results, or (4) the occurrence of a subsequent event directly related to the intended use of this appraisal. To the best of my knowledge and belief, the statements of fact contained in this appraisal report, upon which the analyses, opinions, and conclusions expressed herein are based, are true and correct. This appraisal report sets forth all of the assumptions and limiting conditions (imposed by the terms of this assignment or by the undersigned), affecting my personal, impartial, and unbiased professional analyses, opinions, and conclusions. The analyses, opinions, and conclusions, were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Ap- praisal Practice, and the Code of Professional Ethics. As of the date of this report, I have completed the requirements of the continuing education pro- gram of the State of California. Further, duly authorized representatives of the State, as well as the Appraisal Institute, have the right to review this report. I have not performed services, as an appraiser or in any other capacity re- garding the property that is the subject of this report within the three-year pe- riod immediately preceding acceptance of this assignment. Jason P. Boyer provided real property appraisal assistance to the person signing this report with respect to data collection, inspection of the property, and report prepara- tion. No one other than the undersigned prepared the analyses, conclusions, and opinions of this appraisal study. Seott-A'L(dgard, MAI, CCIM Certified General Real Estate Appraiser California Certification No. AG 004014 Renewal Date: March 13, 2018 Date: June 19, 2017 LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS IS APE OF IHE APPRAISAL The appraiser, in connection with the following appraisal study, has: 1. Been retained, and has accepted the assignment, to make an objective analysis/valuation study of the subject property and to report, without bias, his estimate of fair market value. The subject property is particularly described in the follow- ing portion of this report in the section entitled Subject Property Description. 2. Toured the general area by automobile to acquaint himself with the extent, condition, and quality of nearby develop- ments, sales and offerings in the area, density and type of development, topographical features, economic conditions, trends toward change, etc. 3. Walked within the subject property, and some of the nearby neighborhood, to acquaint himself with the current particular attributes, or shortcomings, of the subject property. 4. Completed an inspection of the subject property for the purpose of becoming familiar with certain physical charac- teristics. 5. Made a visual observation concerning public streets, ac- cess, drainage, and topography of the subject property. 6. Obtained information regarding public utilities and sanitary sewer available at the subject site. 7. Made, or obtained from other qualified sources, calculations on the area of land contained within the subject property. Has made, or caused to be made, plats and plot plan draw- ings of the subject property, and has checked such plats and plot plan drawings for accuracy and fair representation. 8. Taken photographs of the subject property, together with photographs of the immediate environs. 9. Made, or caused to be made, a search of public records for factual information regarding the recent sales of the subject property, and for recent sales of comparable properties. LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS 5 SCOPE QF THE APPRAISAL (Continued) 10. Has viewed, confirmed the sale price, and obtained certain other information pertaining to each sale property contained in this report. 11. Reviewed current maps, zoning ordinances, and other ma- terial for additional background information pertaining to the subject property, and sale properties. 12. Attempted to visualize the subject property as it would be viewed by a willing and informed buyer. 13. Interviewed various persons, in both public and private life, for factual and inferential information helpful in this appraisal study. 14. Formed an opinion of the highest and best use applicable to the subject property appraised herein. 15. Formed an estimate of market value of the unencumbered fee simple interest in the subject property, as of the date of value expressed herein. 16. Prepared and delivered this appraisal report, in triplicate, in summation of all the activities outlined above. r J J_ LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS ASSUMPTIONr2 AND LIMITING CONDITIONS This appraisal is made with the following understanding as set forth in items No. 1 through 18, inclusive: 1. That liability of Lidgard and Associates, Inc., along with the specific appraiser responsible for this report, is limited to the client only and to the fee actually received by the firm. There is no accountability, obligation or liability to any third party reader/user of this report. In the event this appraisal report is delivered to anyone other than the client for whom this report was prepared, it is the client's responsibility to make such party and/or parties aware of all limiting condi- tions and assumptions of this assignment and related dis- cussions. 2. That in the event the client or any third party brings legal ac- tion against Lidgard and Associates, Inc., or the preparer of this report, and the appraiser prevails, the party initiating such legal action shall reimburse Lidgard and Associates, Inc. and/or the appraiser for any and all costs of any nature, including attorney's fees, incurred in their defense. 3. This appraisal report is intended to comply with reporting requirements set forth in the Uniform Standards of Profes- sional Appraisal Practice, under Standard Rule 2-2(a). It contains a moderate level of detail with respect to the mar- ket data, appraisal methodology, and reasoning supporting the analysis, opinions, and conclusions. This report con- tains sufficient information for the intended use and users for which it was written. 4. That title to the subject property is assumed to be good and merchantable. Liens and encumbrances, if any, have not been deducted from the final estimate of value. The vesting was obtained from County Records, or other sources, and has been relied upon as being accurate. The subject prop- erty has been appraised as though under responsible own- ership. The legal descriptions are assumed accurate. LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS 7 ASSUMPTIONS-AbID LIMITING CONDITIONS (Continued) 5. That the appraiser assumes there are no hidden or unap- parent conditions of the subject property, subsoil, struc- tures, or other improvements, if any, which would render them more or less valuable. Further, the appraiser as- sumes no responsibility for such conditions or for the engi- neering which might be required to discover such condi- tions. That mechanical and electrical systems and equip- ment, if any, except as otherwise may be noted in this re- port, are assumed to be in good working order. The prop- erty appraised is assumed to meet all governmental codes, r� requirements, and restrictions, unless otherwise stated. 6. That no soils report, topographical mapping, or survey of the subject property was provided to the appraiser; there- fore information, if any, provided by other qualified sources pertaining to these matters is believed accurate, but no lia- bility is assumed for such matters. Further, information, es- timates and opinions furnished by others and contained in this report pertaining to the subject property and market da- ta were obtained from sources considered reliable and are believed to be true and correct. No responsibility, however, for the accuracy of such items can be assumed by the ap- praiser. 7. That unless otherwise stated herein, it is assumed there are s no encroachments, easements, soil toxics/contaminants, or other physical conditions adversely affecting the value of the subject property. 8. That no opinion is expressed regarding matters which are legal in nature or other matters which would require special- ized investigation or knowledge ordinarily not employed by real estate appraisers, even though such matters may be mentioned in the report. 9. That no oil rights have been included in the opinion of value expressed herein. Further, that oil rights, if existing, are as- sumed to be at least 500 feet below the surface of the land, without the right of surface entry. f_ LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS ASSUMPTIONS AND LIMITING CONDITIONS (Continued) 10. That the distribution of the total valuation in this report be- tween land and improvements, if any, applies only under the existing program of utilization. The separate valuations for land and improvements must not be used in conjunction with any other appraisal and are invalid if so used. 11. That the valuation of the property appraised is based upon economic and financing conditions prevailing as of the date of value set forth herein. Further, the valuation assumes good, competent, and aggressive management of the sub- ject property. 12. That the appraiser has conducted a visual inspection of the subject property and the market data properties. Should subsequent information be provided relative to changes or differences in (1) the quality of title, (2) physical condition or characteristics of the properties, and/or (3) governmental restrictions and regulations, which would increase or de- crease the value of the subject property, the appraiser re- serves the right to amend the final estimate of value. 13. That the appraiser, by reason of this appraisal, is not re- quired to give testimony in court or at any governmental or quasi -governmental hearing with reference to the property appraised, unless contractual arrangements have been previously made therefor. 14. That drawings, plats, maps, and other exhibits contained in this report are for illustration purposes only and are not necessarily prepared to standard engineering or architec- tural scale. 15. That this report is effective only when considered in its entire form, as delivered to the client. No portion of this report will be considered binding if taken out of context. 16. That possession of this report, or a copy thereof, does not carry with it the right of publication, nor shall the contents of this report be copied or conveyed to the public through ad- vertising, public relations, sales, news, or other media, with- out the written consent and approval of the appraiser, par- ticularly with regard to the valuation of the property LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS 9 ASSUMPTIONS AND LIMITING CONDITIONS (Continued) appraised and the identity of the appraiser, or p y pp the firm with which he is connected, or any reference to the Appraisal In- stitute, or designations conferred by said organizations. 17. That the form, format, and phraseology utilized in this report, except the Certification, and Terms and Definitions, shall not be provided to, copied, or used by, any other real estate appraiser., real estate economist, real estate broker, real es- tate salesman, property manager, valuation consultant, in- vestment counselor, or others, without the written consent and approval of Scott A. Lidgard. 18. That this appraisal study is considered completely confiden- tial and will not be disclosed or discussed, in whole or in part, with anyone other than the client, or persons designat- ed by the client. J J ._I J J J LIDGARD AND ASSOCIATES AP P RAI S E R S-CONSULTANTS j 10 rI TERMS AND DEFINITION Certain technical terms have been used in the following report which are de- fined, herein, for the benefit of those who may not be fully familiar with said terms. '1 MARKET VALUE or Fair Market Value) - Market value is sometimes referred to as Fair Market Value; the latter is a legal term, and a common synonym of Market Value. Market value as de- fined in Title XI of the Financial Institutions Reform, Recovery and Enforce- ment Act of 1989 (FIRREA) is defined as follows: "The most probable price which a property should bring in a competitive and open market under all conditions requisite to a I fair sale, the buyer and seller each acting prudently and knowl- edgeably, 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 buy- er 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 mar- ket; 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 prop- erty sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale." SALES COMPARISON APPROACH: One of the three accepted methods of estimating Market Value. This ap- proach consists of the investigation of recent sales of similar properties to ' determine the price at which said properties sold. The information so gath- ered is judged and considered by the appraiser as to its comparability to the subject property. Recent comparable sales are the basis for the Sales Comparison Approach. LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS I TER ND F NITI N (Continued) COST -SUMMATION APPROACH: Another accepted method of estimating Market Value. -1 I aNN1 �.Ja%_l I �U, sists of estimating the new construction cost of the building and yard im- provements and making allowances for appropriate amount of depreciation. The depreciated reconstruction value of the improvements is then added to the Land Value estimate gained from the Sales Comparison Approach. The sum of these two figures is the value indicated by the Cost -Summation Ap- proach. INCOME CAPITALIZATION APPROACH: The Income Capitalization Approach consists of capitalizing the net income of the property under study. The capitalization method studies the income stream, allows for (1) vacancy and credit loss, (2) fixed expenses, (3) operat- ing expenses, and (4) reserves for replacement, and estimates the amount of money which would be paid by a prudent investor to obtain the net in- come. The capitalization rate is usually commensurate with the risk, and is adjusted for future depreciation or appreciation in value. DEPRECIATION: Used in this appraisal to indicate a lessening in value from any one or more of several causes. Depreciation is not based on age alone, but can result from a combination of age, condition or repair, functional utility, neighbor- hood influences, or any of several outside economic causes. Depreciation applies only to improvements. The amount of depreciation is a matter for the judgment of the appraiser. HIGHEST AND BEST USE: Used in this appraisal to describe that private use which will (1) yield the greatest net return on the investment, (2) be permitted or have the reasona- ble probability of being permitted under applicable laws and ordinances, and (3) be appropriate and feasible under a reasonable planning, zoning, and land use concept. LIDGARD AND ASSOCIATES _ APPRAISERS -CONSULTANTS 12 SUBJECT PROPERTY • :3 - r .s -•ny t 32 i — ` ryr: •. liar Aerial view of subject property situated on the south side of Highway 111, beginning 275± feet east of Dune Palms Road, within, within the City of La Quinta. See additional photographs in the Addenda Section. APPARENT VESTEE: City of La Quinta Mailing Address: P. O. Box 1504 La Quinta, California 92247 PROPERTY ADDRESS: No situs address; property located in La Quinta, California I r/1 n I Portion of the Southeast 1/4 of Section 29, Township 5 South, Range 7 East, San Bernardino Baseline and Meridian. A complete metes and bounds legal description of the subject property was not provided for review. LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS 1 SITE DE RIPT N LOCATION: South side of Highway 111, beginning 275± feet east of Dune Palms Road, within the corporate limits of the City of La Quinta. MAP COORDINATES: Thomas Bros. Map Page 849, Grid J-3 CENSUS TRACT: Property located in Government Census Tract 451.21. LAND SHAPE: Slightly irregular rectangular land configuration; see highlighted portion of plat map on the opposite page. DIMENSIONS: Various and numerous dimensions; reference plat map. LAND AREA: 9.43± acres, per Assessor's records and mapping, or 410,771± square feet. TOPOGRAPHY: Effectively level topography. DRAINAGE: Appears to be adequate; no depressions or low areas were noted within the boundaries of the subject property which would cause a water ponding condition during the rainy season. SOIL STABILITY: Appears to be adequate based upon the existing development at the subject site, as well as surrounding developments; it should be noted that a soils report was not provided for review. SOIL CONTAMINATION: None known or observed, however, a soils study has not been provided for review. The subject property has been appraised as though free of soil contaminants. ACCESS: The subject property has 662.65 lineal feet of frontage along Highway 111, and 700± feet along Vista Coralina Lane. LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS P11 SITE DE CRIPTI N (Continued) RIGHTS -OF -WAY WIDTH: Highway 1 1 1: 1 10-140 feet. Vista Coralina Lane: 25± feet. STREET SURFACING: Asphalt paved traffic lanes. CURB AND GUTTER: Concrete curb and gutter along subject frontage. SIDEWALK: Concrete sidewalk along subject frontage. STREET LIGHTS: Mounted on ornamental standards. PUBLIC UTILITIES: Water, gas, electric power, and telephone are available at the site. SANITARY SEWER: Available to site. ENCROACHMENTS: None known, or observed during the field inspection, however, a survey of the subject property was not provided for review. EASEMENTS: A title report pertaining to the subject property was not provided for review. Easements, if existing, are assumed to be located along property boundaries not interfering with the existing or future highest and best use of the subject property. It is further assumed there are no "cross -lot" or "blanket" easements. ILLEGAL USES: None observed. EARTHQUAKE FAULT: The subject property is not located within an earthquake fault study zone. The greater Southern California area, however, is gener- ally prone to earthquakes and other seismic disturbances. No seismic or geological studies have been provided for review. No responsibility is assumed for the possible impact on the subject property of seismic activity and/or earthquakes. LIDGARDANDASSOCIATES APPRAISERS -CONSULTANTS 3 SITE ❑ESCRIPTION (Continued) FLOOD HAZARD AREA: The larger parcel is located within Zone X, per data issued by the Federal Emergency Management Agency. Property is depicted on Flood Map Panel 06065C2234G, dated August 28, 2008. PRESENT USE: Vacant land. ZONING: The subject property is located within the CR (regional commercial) zone of the City of La Quinta. The general plan land use designation is commercial/mixed retail. The purpose and intent of the CR zone classification is to provide for the development of regionally oriented commercial areas intended to provide a broad range of goods and services serving the entire region. Specific permitted uses include retail stores, general services, office uses, health services, eating and drinking establishments, and public/semi-public uses. Current development standards include a (1) maximum floor area ratio (FAR) of 0.35 and (2) maximum building height of 50 feet. There is no minimum lot size requirement. Minimum building setback area requirements are as follows: Arterial highway frontage: 30 feet. Local street frontage: 20 feet. Residential districts: 30 feet. The on -site automobile parking requirement varies depending on the type of use. In general, commercial retail shopping centers require one space per 200 square feet of gross leasable floor area. Conventional sit- down restaurant facilities require one space per 75 square feet including indoor and outdoor seating areas. The parking require- LIDGARD AND ASSOCIATES _ APPRAISERS -CONSULTANTS L: SITE DESCRiPTI_N (Continued) ZONING: (Continued) ment for hotel facilities with less than 200 guest rooms is based on 1.1 space per guest room plus one space for every 75 square feet of meeting area. Based on an inspection of the subject property, a tour of the general subject vicinity with respect to existing sand uses, as well as a review of current zone standards, the optimal utility of the subject site is as zoned. HIGHEST AND BEST USE: The reader is referred to the first portion of the Valuation Analysis Section for a detailed discussion regarding the highest and best use of the subject property. EXISTING IMPROVEMENTS COMMENT There are no building or other on -site improvements located within the boundaries of the subject property having significant monetary value in a highest and best use context. ASSESSMENT DATA► ASSESSOR'S PARCEL NO.: 600-020-053 ASSESSED VALUATIONS: Not applicable; property vested with public entity. TAX CODE AREA: 20011 TAX YEAR: 2016-2017 REAL ESTATE TAXES: Not applicable; property vested with public entity.* SPECIAL ASSESSMENTS: None known. " Real estate taxes will be based upon approximately 1.15% of the current cash value placed on the subject property by the Riverside County Assessor, in the event the subject property is sold to a private party (per Proposition 13). LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS A OWNERSHIP HIST R COMMENT: The subject property has been vested with the present owner in excess of five years. Due to the date of acquisition, the purchase price is not considered relevant to the current market value. The property has not been marketed for sale through the local Multiple Listing Service in recent years. NEIGHBORHOOD ENVIRONMENT COMMUNITY: The City of La Quinta was incorporated May r 1, 1982 as a general law city, governed under California's State regulations. The La Quinta City Council consists of five councilpersons elected at large to serve four- _ year terms. The Mayor is elected through a public election process; the Mayor Pro-Tem is selected by the City Council from among its own members. The City Council enacts '- City ordinances, establishes policies, represents the public, maintains inter- governmental relations, and exercises general oversight over the affairs of City government. La Quinta is situated within the Coachella Valley of the Colorado Desert, surrounded by " the San Jacinto Mountains to the east and the Santa Rosa Mountains to the south. Neighboring communities include Indio, Thousand Palms, Palm Desert, Indian Wells, Rancho Mirage, Cathedral City, and Palm Springs. Interstate 10 is the primary freeway accessing the greater Coachella Valley region. Predominant intersecting streets entering the City of La Quinta include Washington Street, Jefferson Street, Avenue 50, Avenue 52, Monroe Street, and Highway t 111. LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS i 6 A I I-IB H © ENVIRONMENT (Continued) COMMUNITY: (Continued) The City of La Quinta encompasses 35.5 square miles; the elevation is 235 feet above sea level. The total permanent resident pop- ulation within City limits is reported at 38,075 persons. The average household size is approximately 2.52 persons. The median household income is $72,099. The La Quinta labor market is allocated between a primary market area (30-mile radius), and a secondary market area (60- mile radius). The top ten private employers within the City of La Quinta, as of 2010, are summarized as follows: No. of Em Ic er Emnloyees. La Quinta Resort and Club 1,500 PGA West Stadium Course 1,200 Desert Sands Unified School District 764 Walmart 350 The Home Depot 210 The Hideaway 150 Lowe's 150 The Madison Club 150 Stater Bros. 130 Tradition Golf Club 101 LOCATION: The subject property is located toward the northerly portion of the City of La Quinta, in close proximity to the easterly boundary of Indian Wells. Other neighboring and adjoining communities include Coachella, Indio, and Palm Desert. LAND USES: The predominant land use within the immediate vicinity is golf course oriented single family residential subdivisions. Exist- ing developments include the Palms Golf Club, Andalusia Country Club, PGA West, and Hideaway Golf Club. The dwellings, for the most part, consist of one and two story structures of wood frame and stucco construction. LIDGARID AND ASSOCIATES APP RAI SERS-CONSULTANTS 7 .1 I II'aIEIGHBORHOO❑ ENVIR NMENT (Continued) LAND USES: (Continued) There is limited commercial retail develop- ment in the immediate area. The primary commercial corridor is Highway 111. The El Paseo commercial retail district, along with the Westfield Shoppingtown, is located within neighboring Palm Desert. Said develop- ments offer premium retail and dining establishments. Based on a tour of the general subject vicinity, the overall compatibility of existing land uses is rated above average. No substantial adverse conditions were noted which would have a measurable impact on the value of the subject property. BUILT-UP: Effectively 65% built-up, including golf course developments. OCCUPANCY: Residential: 55±% owners 45±% tenants Commercial: 30±% owners 70±% tenants Industrial: 35±% owners 65±% tenants PRICE RANGE: Commercial land parcels within the greater Coachella Valley region generally range from $6.00 to exceeding $25.00 per square foot of land area. The upper range of value pertains primarily to prominent commercial corner locations, whereas the lower range consists of large unimproved acreage land parcels. Improved single family residential properties within the subject community generally range in value from $300,000 to exceeding $800,000. The lower value range primarily consists of smaller dwellings of marginal condition, whereas the upper value range pertains to larger and well maintained properties. LMOARD AND ASSOCIATES APPRAISERS -CONSULTANTS 9 NEIGH6 H D ENVIRONMENT (Continued) PRICE RANGE: (Continued) Multiple family residential properties are within a much broader value range; smaller complexes such as duplexes and triplexes, generally range from $400,000 to exceeding $600,000. Larger multiple family residential complexes range in value in excess of several million dollars. Improved commercial properties range in value from approximately $800,000 for single tenant, typically owner -user facilities, to exceeding several million dollars including large multi -tenant commercial facilities anchored by national tenants. There are several improved commercial properties within the greater subject market area ranging in value from $800,000 to $1,000,000. AGE RANGE: The age range of all types of improved properties is rather broad. Single family residential properties generally range in age from effectively new to exceeding 4❑ years. PRIDE OF OWNERSHIP: Overall pride of ownership in the general subject market area, evidenced by an ongoing maintenance program, is rated above average. OTHER: The availability and adequacy of public facilities, transportation, and commercial retail facilities is rated average. The City of La Quinta provides police and fire protection to the subject district. See Valuation Analysis in the following section. LIDOARD AND ASSOCIATES APPRAISERS -CONSULTANTS 9 VALUATION! ANALYSIS The purpose of this valuation study is the estimation of market value of the unencumbered fee simple interest in the subject property as of the date of value employed herein. Prior to the application of the appraisal process, which in this case employs the Sales Comparison Approach as applied to commercial land value, it is necessary to consider and analyze the highest and best use of the subject property. HIGHEST AND BEST USE ANALYSIS: Highest and best use is defined in The Appraisal of Real Estate, by the Appraisal Institute, 14th Edition, Page 332, as: "The reasonably probable and legal use of property that results in the highest value." In the process of forming an opinion of highest and best use, consideration must be given to various environmental and political factors such as zoning restrictions, probability of zone change, private deed restrictions, location, land size and configuration, topography, and the character/quality of land uses in the immediate and general subject market area. There are three basic criteria utilized in the highest and best use analysis of a property as if vacant, as well as presently improved. The three criteria are summarized as follows: 1. Physically possible. 2. Legally permissible. 3. Financially feasible. The foregoing are typically considered sequentially; for example, a specific use may prove to be maximally productive, however, if it is not legally permissible, or physically possible, its productivity is irrelevant. Physically Possible: The physical possibility of developing a specific property is governed, in part, by the size, shape, area, and terrain of the property in question. The availability of public utilities is also an important consideration in the analysis of a property's overall development potential. LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS 1 VALUATION ANALYSIS (Continued) HIGHEST AND BEST USE ANALYSIS: (Continued) Physically Possible: (Continued) Additional physical considerations are warranted when analyzing the highest and best use of the subject property, as presently improved. The size, architectural design, and condition of the existing building improvements are important elements, and may have a substantial impact on the highest and best use of a property, as presently improved. Legally Permissible: Legally permissible uses are determined, in part, by a community's general plan, zoning requirements, local building codes, and private deed restrictions. The general plan of a community is established to assure continuity of development within the community and the surrounding area. There is usually a consistency between the general plan of a community and the various zone classifications. The zone classification sets forth the various types of development allowed within a specific zone district. Zoning requirements typically constitute the available choices of development for a property. Local building codes are generally addressed as part of the zone classification, and include items such as maximum building densities, building height restrictions, setback and parking requirements, etc. Private deed restrictions relate to mutual agreements under which a property was acquired. Said restrictions may prohibit certain types of development. Financially Feasible: Those uses which meet the first two criteria, i.e. physically possible and legally permissible, are further analyzed in order to determine which uses produce an adequate return on the investment. The specified use is considered financially feasible if the net income capable of being generated is enough to satisfy the required rate of return and provide a return on the land. Among those uses which are considered financially feasible, that use which produces the highest price, or value, consistent with the required rate of return, is considered the highest and best use of the property. LIDGA J3 AND ASSOCIATES APPRAISERS -CONSULTANTS 2 VAL A ION A ALY ! (Continued) HIGHEST AND BEST USE ANALYSIS: (Continued) Conclusion: The subject property has an interior (versus corner) location along a moderately traveled commercial thoroughfare. The site has a slightly irregular land configuration, effectively level topography, and contains 9.43± acres, or 410,771± square feet of land area. Vehicular and pedestrian accessibility to the subject site is rated above average. All public utilities such as water, gas, electric power, telephone, as well as sanitary sewer are available to the site. The physical characteristics of the subject parcel are considered adequate to accommodate a variety of legally permissible uses. As stated, the subject property is located within the CR (regional commercial) zone of the City of La Quinta. The general plan land use designation is commercial/mixed retail. The purpose and intent of the CR zone classification is to provide for the development of regionally oriented commercial areas intended to provide a broad range of goods and services serving the entire region. Specific permitted uses include retail stores, general services, office uses, health services, eating and drinking establishments, and public/semi-public uses. The optimal utility of the subject site is as zoned. Based on the demand, physical characteristics of the site, as well as the legally permissible uses, it is the appraiser's opinion that the maximally productive use, and therefore, the highest and best use of the subject land, as if vacant, is commercial development. VALUATION METHODS: There are three conventional methods (approaches) which can be used to estimate value. They are the Sales Comparison Approach, Cost -Summation Approach, and Income Capitalization Approach. Following is a brief description of each approach to value. Sales Comparison Approach: This approach consists of the investigation of recent sales of similar properties to determine the price at which said properties sold. The information so gathered is judged and considered by the appraiser as to its comparability to the LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS 3 VALUATION ANALYSIS (Continued) VALUATION METHODS: (Continued) subject property. Recent comparable sales, either vacant land or improved properties, are the basis for the application of the Sales Comparison Approach. Cost -Summation Approach: The Cost -Summation Approach consists of estimating the construction cost new of the building and yard improvements and making allowances for the appropriate amount of accrued depreciation. The depreciated reconstruction value of the improvements is then added to the land value estimate. The sum of these two figures is the value indicated by the Cost - Summation Approach. Income Capitalization Approach: The Income Capitalization Approach consists of the capitalizing of net income of the property under appraisement. The capitalization methodology studies the income stream, allows for (1) vacancy and credit loss, (2) fixed expenses, and (3) oper- ating expenses. The value indicated by the Income Capitalization Approach represents the money which would be paid by a prudent investor to obtain the net income capable of being generated by the property. The capitalization rate is usually commensurate with the inherent risk. Inasmuch as the subject property consists of a vacant commercially zoned land parcel, the Sales Comparison Approach, as applied to land value, is the only approach considered applicable in the subject case. SALES COMPARISON APPROACH: The Sales Comparison Approach takes into account properties which have sold in the open market. This approach, whether applied to vacant or improved property, is based on the Principle of Substitution which states, "The maximum value of a property tends to be set by the cost of acquiring an equally desirable substitute property, assuming no costly delay is encountered in making the substitution." Thus, the Sales Comparison Approach attempts to equate the subject property with sale properties by analyzing and weighing the various elements of comparability. LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS 91 VALUATION ANALY I (Continued) SALES COMPARISON APPROACH: (Continued) The Sales Comparison Approach was applied after conducting an investigation of market data (acreage land sales) in the greater subject market area. The reader is referred to the Market Data Section for comprehensive information pertaining to each sale property employed herein. Reference the Market Data Map on the following page for an illustration of the location of the various sale properties. Primary indicators studied included sales of acreage land parcels suitable for large scale developments as well as land sales construction cost estimates and depreciation schedules. Other elements considered included (1) pride of ownership exhibited by an aggressive and on -going maintenance program, and (2) trends toward change evidenced by private redevelopment and remodeling, or gradual continued building degeneration in certain areas. The knowledge and understanding of present and historical value patterns and trends affecting the local real estate market are based on the observation of market conditions and the appraisal of other commercial properties, as well as information obtained from various sources which include the following: • Owners: Interviews were conducted with owners of commercial properties in the general research area to determine various market trends, and value patterns. • Tenants: Interviews were conducted with various tenants of properties located within the immediate subject market area. • Real estate brokers and salespersons: A number of active brokers and salespersons within the greater subject market area were interviewed regarding existing and historical lease and sales data, as well as value patterns and trends. • Public officials: Various public officials were interviewed regarding (1) existing or proposed projects which have an impact on real property values, (2) economic trends, (3) level of public services, (4) zone classifications and building standards, and (5) property tax structure and assessment districts. LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS 5 Little Mo 62 Heights Joshua Tree a Desert entynine Yucca Valley peig is Heights Pa me S A N Palm Wells B E R N A R D I N 0 B o Queen Y f i"kwnlah' —• $9.89 _ — +Eureka P�zh Pinto W IL OuaU Mountain $9.87 rt. Hot Joshua Tree Joshua Tree National Park I S rings Wilderness t Bonnie Bella • ppg Mount Palmas �Inspiration ite to cam San a North P m S rings Pam Rq Subject snow creek ky valley. Property ,,, D $11.90 4' C A L I F O N I A Mt San Jacinto Palm S ri s RI tors a Ills Palms State Park Hidden Paf s Pus San Jacinto Palms Wilderness anch QM mbar Palms Csithedra ,Biskra Palms ahquitz Peak City Palm D Indian Be ,i o Cahullla as Hills° a La Quin t► chella. I San Be ardino National F est Tfwmas , Tho Mountain A HTaylor Pinyon Crest $9.39 Pinyon Pines 7i RlEbonvmod Martinez fd slain Rnza Santa Santa Rosa Rosa I.R. Mountain Cahullla Indian Reservation C j t an I Kane ermal � f Jacqu a Cochran• Region irport 62 ,tt ti I � Va 'e Meoca ti Marbne It Camp tknehundredl PaIR,s is$ ESalton Sea $6.47 0 Anza-Borrego Desert State Park Rabbit Peak as 0 ml 5 10 15 LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS VALUAT[Obl ANALYSIS (Continued) SALES COMPARISON APPROACH: (Continued) • Published data: Information was gathered and studied regarding population, unemployment levels, employment centers, commercial sales data as well as rental data, and other demographic and economic factors. Land Value: Following is a summary of those sales considered helpful when estimating the value of the subject land parcel. Land Area Street Data Date Zo_ nina _ Acres Sq.Ft, Corner Frontal Sale Price Per 5F A. 3-16 CG 10.70 ac 466,092 sf yes 1,426 feet $4,375,000. $ 9.39 NW'ly/C Hwy. 1 1 1 and Mirage Cove Dr., Rancho Mirage 1 B. 5-16 C-1/R-2 4.64 ac 202,287 sf no 583 feet $2,000,000. $ 9.89 k SEQ Palm Canyon Dr. and Via Olivera, Palm Springs C. 6-16 CR 22.02ac 959,191 sf yes 2,840feet $7,250,000. $ 7.56 SEQ Adams St. and Auto Centre Dr., La Quinta D, 7-16 CG 6.56 ac 285,754 sf no 1,210 feet $3,400,000. $1 1.90 NEQ Harrison St. and 61h St., Coachella 1 1 E. 8-16 CE-PD 10.64 ac 463,478 sf no 955 feet $3,000,000. $ 6.47 E/S Monroe St., 1,290±' S/O Ave. 50, Indio F. 3-17 SI 2.79 ac $121,532 sf no 235 feet $1,200,000. $ 9.87 i N/S Dinah Shore Dr., btwn. Leilani Wy. and Spyder Cir., Palm Desert The land sale properties surveyed are located within the general subject vicinity, and represent the most recent comparable land sale transactions. The properties range in size from 2.79 to 22.02 acres, or 121,532 to 959,191 square feet of land area. The overall purchase prices range from $1,200,000 to $7,250,000, reflecting a range of value between $6.47 to $1 1.90 per square foot of land area. i j Due to the absence of a representative number of large acreage land sale J properties having recently sold within the immediate subject market area, it was necessary to expand the (1) chronological time frame, and (2) geographic search area to include the greater Coachella Valley Region. J LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS J6 YALUATION ANALY I (Continued) SALES COMPARISON APPROACH: (Continued) Land Value: (Continued) Particular consideration has been assigned to differing market conditions, general location, as well as immediate environmental influences in the analysis of the individual sale properties. All of the sales employed herein conveyed title to the fee simple interest, and represent arm's length transactions. Financing terms of each sale are considered generally typical of the subject market area. Adjustments for property rights conveyed, conditions of sale, and financing terms, therefore, are not warranted. Market Conditions: Certain of the land sales data considered extended over a time period back to the first quarter of 2016. The time frame permitted the development of a rather comprehensive real estate market profile. The sales employed in this report are set forth in chronological order, and took place between March, 2016 and March, 2017. Based on market research findings and analysis of the immediate and general subject vicinity, it is apparent that the value trend of vacant commercially zoned land parcels was relatively stable between approximately 2013 and the second half of 2014. Beginning in the second half of 2014, there has been an increase in the demand for commercial land parcels, which continues through the current date. The increased demand has resulted in a slight upward value trend. This condition has been considered in the analysis of the individual land sale transactions employed herein. Elements of Comparability: After viewing each of the sale properties, and obtaining certain information pertinent to land value, the appraiser analyzed the various elements of comparability for each sale property which, among others, include the following: General location. Availability of public alley. Immediate environmental influences. Overall developability. Zoning. Site frontage/depth ratio. Vehicular and pedestrian access. Site prominence and exposure. Vehicular and pedestrian traffic. Proximity to freeway. LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS 7 I VALUATION ANALYST (Continued) SALES COMPARISON APPROACH: (Continued) Land Value: (Continued) Elements of Comparability: (Continued) A Relative Comparison Analysis (RCA) has been conducted between the individual comparable properties and the subject property. The RCA is a qualitative technique for analyzing comparable sales, and is a valuable tool employed to illustrate whether the characteristics of a comparable property are inferior, superior, or similar to those of the property under appraisement. The Relative Comparison Analysis is similar to paired data analysis without the use of arbitrary or unsupportable quantitative adjustments. This technique acknowledges the imperfect nature of the subject real estate market. The primary objective is to bracket the subject property between the comparable sales with respect to the similarity, superiority, and inferiority thereof. Superior elements of comparability of an individual sale property would reflect a downward adjustment to the value indication thereof. Conversely, inferior elements suggest an upward adjustment. Additionally, it is important to note that the above elements of comparability were not assigned equal weight in making the analysis of each property. The general location, immediate environmental influences, vehicular accessibility, site conditions, site prominence/exposure, and land plottage were considered the most important factors in the subject case, as follows: General Location: Social, economic, and governmental forces have a substantial influence on property values. Locational factors considered include, but are not limited to, demographics such as proximity to housing, schools, employment centers, transportation facilities, as well as quality of public services, proximity to freeway corridors, enforcement of codes, and median income levels. Immediate Environmental Influences: Considered with respect to the density and quality of existing developments within the immediate proximity to a specific property. By contrast, immediate environmental influences represent a myopic consideration of location as opposed to more generalized characteristics considered with respect to general location. LIDGARID AND ASSOCIATES APPRAISERS -CONSULTANTS VALUATION NAL IS (Continued) SALES COMPARISON APPROACH: (Continued) Land Value: (Continued) Elements of Comparability: (Continued) Vehicular Accessibility: Commercial and industrial properties rely heavily on vehicular accessibility. Generally, corner locations with multiple access points command higher values than interior parcels having single point ingress/egress. Site Conditions: This factor is considered with respect to the condition of the property at the time of the sale. While certain properties are acquired based on the underlying land value, often times improvements exist on the site which either contribute or detract from the value. In many instances, an additional expense must be incurred to demolish existing improvements which expense increases the cost of the underlying land. In contrast, however, a nominally improved property may be receiving income for an interim period during the planning and entitlement phase of a future development. Site Prominence/Exposure: Commercial retail and office properties, along with certain industrial uses, rely heavily on site prominence/exposure as a means of attracting customers and clients. The advertising exposure along commercial thoroughfares can also be beneficial to industrial and business park oriented properties. In general terms, signalized corner parcels offer superior prominence/exposure than interior sites. Additionally, heavily traveled corridors are preferred by commercial uses over secondary collector streets. Overall site prominence/exposure of the subject site is judged generally similar to that of the sale properties employed herein. Land Area: The functional utility or desirability of a site often varies depending on the types of contemplated uses. Different prospective uses have ideal size and shape characteristics that influence value as well as highest and best use. The purchase price per square foot of land area can fluctuate greatly depending on the size of property. LIDGARD AND ASSOCIATES _ APPRAISERS -CONSULTANTS 9 VAL AT! N ANALYSIS (Continued) SALES COMPARISON APPROACH: (Continued) Land Value: (Continued) Elements of Comparability. (Continued) Smaller parcels lend themselves to a higher degree of market participants capable of purchasing and developing the sites. Due to the precept of "economies of scale", it is the general consensus that smaller parcels tend to sell on a higher per square foot basis than larger parcels. In light of the variation in land size among the sale properties employed herein, particular consideration has been assigned to land area in the analysis of the subject property. Overall marketability of each sale property was also considered. Marketability is the practical aspect of selling a property in view of all the elements constituting value, and certain economic and financing conditions prevailing as of the date of sale. All of the sale properties employed herein are considered having generally similar marketability as the subject property. Sales Comparison Analysis: Following are comments regarding the various sale properties employed herein. Data A Located at the northwesterly corner of Highway 1 1 1 and Mirage Cove Drive, Rancho Mirage. The site was vacant at the time of sale. The buyer intends to construct a mixed -use commercial/ - residential development. The parcel has a signalized corner location, effectively rectangular land configuration, level topography, and contains 10.70± acres, or 466,092± square feet of land area. The purchase price was $4,375,000, all cash. The deed recorded March 31, 2016 as Document No. 125026. Further details regarding the transaction are summarized as follows: Grantor: Home Tech Visions, LP Grantee: HJH Construction, Inc. Assessor's Parcel No.: 689-030-004, 005 LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS 10 VALUATION _ANALYSIS (Continued) SALES COMPARISON APPROACH: (Continued) Land Value: (Continued) Sales Comparison Analysis: (Continued) Data B Located within the southeast quadrant of Palm Canyon Drive and Via Olivera, Palm Springs. The site was vacant at the time of sale and was acquired for speculation and the potential for future value appreciation. The parcel has an interior (versus corner) location with double street access, irregular land configuration, effectively level topography, and contains 4.64± acres, or 202,287± square feet of land area. The property was originally offered for sale at $2,500,000 and was on the market 2,071 days. The purchase price was $2,000,000, all cash. The deed recorded May 26, 2016 as Document No. 216220. Further details regarding the transaction are summarized as follows: Grantor: North First Street Properties Grantee: GMG Palm Canyon, LLC Assessor's Parcel No.: 504-270-003, 005, 006, 007, 008 Data C Located within the southeast quadrant of Adams Street and Auto Centre Drive, La Quinta. The site was vacant at the time of sale. The buyer intends to construct a mixed -use development. The parcel has a corner location, slightly irregular land configuration, effectively level topography, and contains 22.02± acres, or 959,191 ± square feet of land area. The purchase price was $7,250,000, all cash. The deed recorded June 24, 2016 as Document No. 260717. Further details regarding the transaction are summarized as follows: Grantor: Saxony Productions, LP Grantee: SLF-Adams Street La Quinta, LLC Assessor's Parcel No.: 600-340-048 Data D Located within the northeast quadrant of Harrison Street and 61h Street, Coachella. The site was vacant at the time of sale; immediate development plans are unknown. The parcel has an — .. LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS 11 V L ATl N ANALY (Continued) SALES COMPARISON APPROACH: (Continued) Land Value: (Continued) Sales Comparison Analysis: (Continued) interior (versus corner) location, irregular land configuration, effectively level topography, and contains 6.56± acres, or 285,754± square feet of land area. The property was originally offered for sale at $3,500,000 and was on the market 1,680 days. The purchase price was $3,400,000, all cash. The deed recorded July 28, 2016 as Document No. 319363. Further details regarding the transaction are summarized as follows: Grantor: Lunista, LLC Grantee: R. B. Johnson Investment, LLC Assessor's Parcel No.: 778-080-006 Data E Located on the east side of Monroe Street, beginning 1,290± feet south of Avenue 50, Indio. The site was vacant at the time of sale; immediate development plans are unknown. The parcel has an interior (versus corner) location, effectively rectangular land configuration, level topography, and contains 10.64± acres, or 463,478± square feet of land area. The purchase price was $3,000,000, all cash. The deed recorded August 22, 2016 as Document No. 357974. Further details regarding the transaction are summarized as follows: Grantor: Plantation Golf Club, Inc. Grantee: HCL Slauson Overhill, LLC Assessor's Parcel No.: 767-080-007 Data F Located on the north side of Dinah Shore Drive, between Leilani Way and Spyder Circle, Palm Desert. The site was vacant at the time of sale. The buyer intends to construct a self -storage facility. The parcel has an interior (versus corner) location, rectangular land configuration, effectively level topography, and contains 2.79± acres, or 121,532± square feet of land area. LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS 12 VALUATION ANALYSIS (Continued) SALES COMPARISON APPROACH: (Continued) Land Value: (Continued) Sales Comparison Analysis: (Continued) The property was originally offered for sale at $1,300,000 and was on the market 354 days. The purchase price was $1,200,000, which included $400,000 cash down to a concurrent first trust deed note of $800,000 with the seller. The cash down payment represents 33% of the total purchase price. The deed recorded March 24, 2017 as Document No. 228761. Further details regarding the transaction are summarized as follows: Grantor: Promontory Development, LLC Grantee: Charles Spinelli Assessor's Parcel No.� 694-060-030 Reference the Market Analysis Comparison Grid set forth on the following facing page. The sale properties have been compared to the subject property with consideration assigned to property rights conveyed, date of sale, financing terms, along with the various elements of comparability. By way of review and comparison, the property has an interior (versus corner) location along a moderately traveled commercial thoroughfare. The site has a slightly irregular land configuration, effectively level topography, and contains 9.43± acres, or 410,771± square feet of land area. The highest and best use of the property is commercial development. In addition to the consummated sale transactions discussed herein, research was expanded to include two reasonably comparable land parcels presently offered for sale within the general subject market area, as follows: Street Asking Days on Data _Zoning— Land Size Corner Frontage Price Per SF Market 1. SP/CC 745,312 sf yes 1,193 feet $7,000,000. $9.39 629 SEC Monterey Ave. and Dinah Shore Dr., Rancho Mirage 2. MU-SP-300 311,454 sf no 332 feet $2,500,000. $8.03 452 S/S Hwy. 1 1 1, 276' W/O Jefferson St., Indio LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS 13 VALUATION -ANALYSIS(Continued) SALES COMPARISON APPROACH: (Continued) Land Value: (Continued) Sales Comparison Analysis: (Continued) As can be noted, the properties surveyed range in size from 311,454 to 745,312 square feet of land area. The overall asking prices range from $2,500,000 to $7,000,000, reflecting $8.03 to $9.39 per square foot of land area. The marketing times range between 452 and 629 days. All of the consummated sale transactions employed herein were considered helpful in the land valuation analysis of the subject property. The purchase price per square foot of land area has been utilized herein as the primary indication of value inasmuch as it is most commonly utilized by market participants. Following is a summary relating the overall comparability of the individual sale properties to the subject parcel. Value Data Indication Per SF E far lower range $ 6.47 C lower range $ 7.56 A similar $ 9.39 F similar $ 9.87 B similar $ 9.89 Subject - - - - $10.00 D similar $11.90 After considering the various elements of comparability, as well as economic and financial conditions prevailing during the consummation of the various sale properties, when compared to current market conditions, it is the appraiser's opinion that the unencumbered fee simple market value of the subject land parcel is based on $10.00 per square foot of land area, as follows: 410,771 SF @ $10.00 = $4,107,710. Adjusted: $4,100,000. FINAL ESTIMATE OF MARKET VALUE: Based on the foregoing valuation study, the unencumbered fee simple market value of the subject property, as of the date of value employed herein, is estimated at $4,100,000. LIDOARD AND ASSOCIATES APPRAISERS -CONSULTANTS 14 VALUATION ANALYSIS (Continued) EXPOSURE TIME: Exposure time is defined in the 2014-2015 Edition of the Uniform Standards of Professional Appraisal Practice as the "estimated length of time that the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal." Exposure time is a retrospective opinion based on an analysis of past events assuming a competitive and open market. The reasonable exposure time is a function of price, time, and use, not an isolated opinion of time alone. The exposure time of a particular property is a direct function of supply and demand within a particular market segment. Generally, a higher demand results in a shorter marketing period. During the course of extensive market research, interviews were conducted of parties involved in the transactions regarding the sale properties employed in the Sales Comparison Approach. Based on said interviews, as well as interviews with a number of real estate brokers and other market participants, the exposure time estimated for the subject property, assuming an aggressive and comprehensive marketing program, is estimated at approximately six to nine months. LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS 15 MARKET DATA SUMMARY COMMERCIAL LAND VALUE INDICATORS: Land Area Street Data Date Zoning Acres S4Ft. Corner Frontages Sale Price $—Par SF A. 3-16 CG 10.70 ac 466,092 sf yes 1,426 feet $4,375,000. $ 9.39 NW'ly/C Hwy. 111 and Mirage Cove Dr., Rancho Mirage B. 5-16 0-1/R-2 4.64 ac 202,287 sf no 583 feet $2,000,000. $ 9.89 SEQ Palm Canyon Dr. and Via Olivera, Palm Springs C. 6-16 OR 22.02 ac 959,191 sf yes 2,840 feet $7,250,000. $ 7.56 SEQ Adams St. and Auto Centre Dr., La Quinta D. 7-16 CG 6.56 ac 285,754 sf no 1,210 feet $3,400,000. $1 1.90 NEQ Harrison St. and 6`' St., Coachella E- 8-16 CE-PD 10.64 ac 463,478 sf no 955 feet $3,000,000. $ 6.47 E/S Monroe St., 1,290±' S/O Ave. 50, Indio F. 3-17 SI 2.79 ac $121,532 sf no 235 feet $1,200,000. $ 9.87 N/S Dinah Shore Dr., btwn. Leilani Wy. and Spyder Cir., Palm Desert LIDOARD AND ASSOCIATES APPRAISERS -CONSULTANTS 1 Little Mo 62 Joshua Tree Desert Heights Yucca Valley Panorama Heights Heights S A N Palm Wells B E R N A R D I N 0 \110 B o Y;' $9.89 `, Eureka Pe, C Duos I �Mountafn $9.87 sert Hot Joshua Tree Joshua Tree National Park S rings Wilderness Bonnie BOA. • Dos i Mount Palma I jn*mfion white to Comers North Pa Im S rings PM-- Subject `Snow creek ky valley. Property t11 IVIa '1 C A L I F O R N I A {� . W111s Palms Mt San Jacinto Palm S rl s RI Ion a State Park `• fnQ"O-.f- Hidden Pal i Pusha+vaI San Jacinto alms Wilderness RaitiE Nf tuber Palms Cathedra Biskra Palms Tahquhz Peak San Bernardino Nation/Fest Thomas Th. Mountain A $9.39 371 Anxa Santa Rosa I.R. Cahullla Indian Reservation City r Palm R Indian Be f I E R S I j1 Cahullla Hills. La Quin Anza-Borrego Desert State Park Queen Mounvn Pinto D $11.90 � + r N �. an Kome emn81 Ja u Cochran, inyo I Crest Ree�ori• or va tf1 P nini y4n Pines V @ Mecca nwoad Martinez - Mountain rt Camp Santa Rosa hued ! Mountain Pa s 195 I C $7.56 r C Salton Sea $6.47 08 Rabbit Peak O mi 5 4fl 15 LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS i J MARKET DATA A Northwesterly corner of Highway 1 1 1 and Mirage Cove Drive, Rancho Mirage. GRANTOR: Home Tech Visions, LP APN: 689-030-004, 005 GRANTEE: HJH Construction, Inc. LAND SIZE: 10.70 acres, or 466,092 sq.ft. SALE DATE: March 31, 2016 ZONING: CG DOC. NO.: 125026 TOPOGRAPHY: Level SALE PRICE: $4,375,000. DOC. STAMPS: $4,812.50 H & B USE: Commercial PRESENT USE: Vacant land TERMS: All cash IMPROVEMENTS: None at time of sale. ENTITLEMENTS: None ST. FRONTAGE: 1,426 feet VALUE INDICATION $9.39 per SF land. DATE INSPECTED: October 26, 2016 BY: Scott A. Lidgard, MAI LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS 4 MARKET DATA A (Continued) V VERIFICATION: Document of public record, Costar Comps, and Steve Lyle, broker representing grantor. LIDOARD AND ASSOCIATES APPRAISERS -CONSULTANTS 3 MARKET DATA B Southeast quadrant of Palm Canyon Drive and Via Olivera, Palm Springs. GRANTOR: North First Street Properties APN. 504-270-003, 005, 006, 007, 008 GRANTEE GMG Palm Canyon, LLC LAND SIZE: 4.64 acres, or 202,287 sq.ft. SALE DATE: May 26, 2016 ZONING: C-1/R-2 DOC. NO.: 216220 CORNER: No SALE PRICE: $2,000,000. DOC. STAMPS: $2,200.00 H & B USE: Commercial PRESENT USE: Vacant land TERMS: All cash IMPROVEMENTS: None at time of sale. ENTITLEMENTS: None ST. FRONTAGE: 583 feet VALUE INDICATION: $9.89 per SF land. DATE INSPECTED: October 26, 2016 BY: Scott A. Lidgard, MAI LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS MARKET DATA B (Continued) w 101 VIA OLIVERA R "' "" ■ ,„ VIA OLIVERA �, a ® 4 ... 06 v , 14�� h �•� rnR mf� �r of Y ,.oe nc wa U9 M E iij ds A--—--—-—---- ------- ESCUELA2--- VERIFICATION: Document of public record and CoStar Comps. ND ASSOCIATES LIDGARD A APPRAISERS-CONSULTANTS 5 MARKET DATA C Southeast quadrant of Adams Street and Auto Centre Drive, La Quinta. GRANTOR GRANTEE:. SALE DATE: DOC. NO.: SALE PRICE H & B USE: TERMS: Saxony Productions, LP APN: Shopoff Realty Investments, LP LAND SIZE: June 24, 2016 260717 $7,250,000. Commercial All cash ENTITLEMENTS: None DATE INSPECTED ZONING. TOPOGRAPHY 600-340-048 22.02 acres, or 949,191 sq.ft. Level DOC. STAMPS: $7,975.00 PRESENT USE: Vacant land IMPROVEMENTS: None at time of sale. ST. FRONTAGE: 2,840 feet VALUE INDICATION: $7.56 per SF land. October 26, 2016 BY: Scott A. Lidgard, MAI LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS 0 MARKET DATA C (Continued) r PAR S 18 I.mM .. w=u PAIL: 7iD2AC 4 . 1«• i a] VERIFICATION: Document of public record and CoStar Comps. LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS FA MARKET DATA D GRANTOR: Lunista, LLC APN: 778-080-006 GRANTEE: R. B. Johnson Investments, LLC LAND SIZE: 6.56 acres, or 285,754 sq.ft. SALE DATE: July 28, 2016 ZONING CG DOC. NO.: 319363 TOPOGRAPHY: Level SALE PRICE: $3,400,000. DOC. STAMPS: $3,740.00 H & B USE: Commercial PRESENT USE: Vacant land TERMS: All cash IMPROVEMENTS: None at time of sale. ENTITLEMENTS: None ST. FRONTAGE: 1,210 feet VALUE INDICATION: $1 1.90 per SF land. DATE INSPECTED: October 26, 2016 BY: Scott A. Lidgard, MAI LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS N. MARKET DATA D (Continued) i o a�� o 0 osu7 0 o B 1 A 'POR�7b� VERIFICATION: Document of public record, CoStar Comps, and Noel Ramos, broker representing grantor. LIDGAI D AND ASSOCIATES APPRAISERS -CONSULTANTS 9 MARKET DATA E East side of Monroe Street, beginning 1,290± feet south of Avenue 50, Indio. GRANTOR: Plantation Golf Club, Inc. APN: 767-080-007 GRANTEE: HCL Slauson Overhill, LLC LAND SIZE: 10.64 acres, or 463,478 sq.ft. SALE DATE: August 22, 2016 ZONING: CE-PE DOC. NO.: 357974 CORNER: No SALE PRICE: $3,000,000. DOC. STAMPS: $3,300.00 H & B USE: Commercial PRESENT USE: Vacant land. TERMS: All cash IMPROVEMENTS: None at time of sale. ENTITLEMENTS: None ST. FRONTAGE: 955 feet VALUE INDICATION: $6.47 per SF land. DATE INSPECTED: October 26, 2016 BY: Scott A. Lidgard, MAI LIDGARD AND ASSOCIATES APP RAI S E RS-CONSULTANTS 10 j j I MARKET DATA E (Continued) lY r o 1 1� I � I � 0- ; 1 �\ I ' W 1 1 1 1 ■1 j VERIFICATION: Document of public record, CoStar Comps, and Susan Harvey, broker representing grantor. LIDGARD AN D ASSOCIATES APPRAISERS -CONSULTANTS 1 11 MARKET DATA F North side of Dinah Shore Drive, between Leilani Way and Spyder Circle, Palm Desert. GRANTOR: Promontory Development LLC APN: 694-060-030 GRANTEE: Charles Spinelli LAND SIZE: 2.79 acres, or 121,532 sq.ft. SALE DATE: March 24, 2017 ZONING: SI DOC. NO.: 118761 CORNER- No SALE PRICE: $1,200,000. DOC. STAMPS: $1,320.00 H & B USE: Commercial PRESENT USE: Vacant land. TERMS: 33% cash down IMPROVEMENTS: None at time of sale. ENTITLEMENTS: None ST. FRONTAGE: 235 feet VALUE INDICATION: $9.87 per SF land. DATE INSPECTED: June 14, 2017 BY: Scott A. Lidgard, MAI LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS 12 MARKET DATA F (Continued) VERIFICATION n u Document of public record, CoStar Comps, and Bruce Haulley, broker representing grantor. LIDGARD AND ASSOCIATES AP P RA I S E R S-CONSULTANTS 13 Ii J I See Photo No. 1 on first page of Subject Property Section. PHOTO NO. 2! View looking southwesterly at the subject property from Highway 1 1 1. APPRAISERS -CONSULTANTS I STREET SCENE 1 � View looking west along Highway 1 1 1 from the subject frontage. STREET SCENE 2: View looking east along Highway 1 1 1 from the subject frontage. LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS BACKGROUND AND QUALIFICATIONS Scott A. Lidgard, MAI, CCIM President of LIDGARD AND ASSOCIATES ' INCORPORATED i Full service appraisal firm encompassing all types of real 1 property including commercial, industrial, complex residential, and special use properties. Scott A. Lidgard has over 30 years' experience in the appraisal of real property for various clients including public agencies, corporations, law firms in connection with litigation support, accountants, and private clients. OFFICE ORGANIZATIONAL STRUCTURE: Principal Appraiser: Scott A. Lidgard Market Research Analyst: Jason T. Clayton Market Research Analyst: Jason P. Boyer Market Research Analyst: Andrew S. Lidgard Market Research Assistant: Mayra Villegas-Garcia Office Administrator: Sarah A. Petty Office Assistant: Kelly M. Lidgard } PROFEgSHONAL ORGANIZATION AFFILIATIONS: _ y MAI Designated Member of the Appraisal Institute (Member No. 11715). CCIM (Certified Commercial Investment Member) designated member of the CCIM Institute (Member No. 11262). STATE CERTIFICATION: Certified General Real Estate Appraiser by the Office of Real Estate Appraisers, State of California. Certificate No. AG004014. BROKER'S LICENSE: Licensed California Real Estate Broker (License No. 00825141). J EXPERT WITNESS• Qualified as an expert on Real Property Valuation in the Los Angeles, Orange, San Bernardino, and Riverside County Superior Courts, as well as Federal Bankruptcy Court. LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS B&CKGRQUND AND QUALIFICATIONS (Continued) ACADEMIC BACKGROUND California State University, Fullerton B.A., Business Administration, emphasis in real estate finance. Successfully completed various educational courses and seminars sponsored by the Appraisal Institute, as well as other real estate and business organizations. BUSINESS AFFILIATIONS: Appraisal Experience: President, Lidgard and Associates, Inc., Orange, California, established October 1, 1997. Vice President, R. P. Laurain & Associates, Inc., Long Beach, California, between 1984 and 1997. Real Estate Sales Associate, Merrill Lynch Realty, Placentia, California, between 1982 and 1984. BOARD OF DIRECTORSHIPS: Sergeant at Arms, Long Beach Rotary President, Belmont Estates HOA, Orange Vice President, Canyon Rim Villas HOA, Anaheim Hills Treasurer, Orchard Owner's Association, Orange Board of Directors, Villa Heights HOA, Villa Park APPRAISAL SERVICES RENDERED: Real estate appraisal services performed on projects for the following public agencies and private corporations, since 1984: Cities: City of Anaheim City of Azusa City of Baldwin Park City of Bell City of Bellflower City of Bell Gardens City of Brea City of Carson City of Cathedral City City of Costa Mesa City of Diamond Bar City of Downey City of Fullerton City of Garden Grove City of Glendora City of Hawaiian Gardens City of Highland City of Huntington Park City of Indio City of Irvine City of La Mirada City of La Habra City of La Quinta City of Laguna Hills City of Long Beach City of Lynwood City of Mission Viejo City of Montclair City of Monterey Park City of Murrieta City of Ontario City of Palm Desert City of Palm Springs City of Pasadena City of Pico Rivera City of Placentia City of Pomona City of Rancho Mirage City of Redondo Beach LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS I BACKGROUND AND QUALIFICATIONS (Continued) APPRAISAL SERVICES RENDERED (Continued) Cities: (Continued) City of Rialto City of Riverside City of San Clemente City of San Bernardino City of San Juan Capistrano City of Santa Ana City of Santa Clarita City of Signal Hill City of Stanton City of Tustin City of Upland City of Whittier City of West Covina City of Yorba Linda City of Victorville Redevelopment Agencies: Baldwin Park Redevelopment Agency Bell Redevelopment Agency Bell Gardens Redevelopment Agency Buena Park Redevelopment Agency Carson Redevelopment Agency Cathedral City Redevelopment Agency El Monte Redevelopment Agency Garden Grove Redevelopment Agency Glendale Redevelopment Agency Huntington Beach Redevelopment Agency Huntington Park Redevelopment Agency Inglewood Redevelopment Agency La Puente Redevelopment Agency Long Beach Redevelopment Agency Los Angeles Community Redevelopment Agency Norwalk Redevelopment Agency Ontario Redevelopment Agency Palm Desert Redevelopment Agency Rialto Redevelopment Agency Riverside Redevelopment Agency San Bernardino Redevelopment Agency Signal Hill Redevelopment Agency West Covina Community Development Commission Whittier Redevelopment Agency Yorba Linda Redevelopment Agency Other Government Agencies: Calleguas Municipal Water District County of Los Angeles, Internal Services Division County of Riverside Inland Empire Utilities Agency Long Beach Unified School District Los Angeles County Sanitation District Los Angeles Unified School District Orange County Transportation Authority Palm Springs Unified School District LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS kA Ij j BACKGROUND AND QUALIFICATIONS (Continued) APPRAISAL SERVICES RENDERED (Continued) Other Government Agencies: (Continued) Placentia Unified School District Port of Long Beach Port of Los Angeles Resolution Trust Corporation Riverside County Transportation Commission State of California U. S. Department of Navy U. S. Marshal Service Victor Valley Wastewater Reclamation Authority Financial Institutions: American First Federal Credit Union Farmers and Merchants Bank First Federal Bank First Federal Credit Union Fiscal Federal Credit Union Harbor Bank Long Beach Bank Mineral King National Bank Northern Trust Bank Queen City Bank Sumitomo Bank, Ltd. Union Bank Asset Management Companies: Amresco, Inc. American Residential Mortgage Corporation BEI Management, Inc. Emerson International Equitable Real Estate Investment Management EQ Services Icon Associates Independence One Pacific Southwest Partners Private Companies/Corporations: Allstate Insurance Company Best, Best & Krieger, LLP Bonnie, Hopkins & Bastardi, LLP Bridgestone/Firestone, Inc. Black & Vetch Corporation Buchalter Nemer, A Professional Corporation Burke, Williams & Sorenson, LLP California Eminent Domain Law Group LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS BACKGROUND AND QUALIFICATIONS (Continued) APPRAISAL SERVICES RENDERED (Continued) Private Companies/Corporations: (Continued) Carl Karcher Enterprises Chapman University Century Law Group Daley & Heft, LLP Eastman Kodak Company Ferro Corporation Flagstar Companies Guild Financial Hahn & Hahn, LLP Harbor Chevrolet Inland Partners Corporation Kaufman and Broad Latham & Watkins, Attorneys at Law Long Beach Memorial Medical Center Madden, Jones, Cole & Johnson, Attorneys at Law Oliver, Vose, Sandifer, Murphy & Lee Pan Pacific Development Rutan & Tucker, LLP Scotsdale Insurance Snell & Wilmer, Attorneys at Law T.R.W. The Trust for Public Land Westport Packers Windes and McClaughry, Accountancy Corporation Wise, Wiezorek, Timmons & Wise, Attorneys at Law LIDGARD AND ASSOCIATES APPRAISERS -CONSULTANTS