appraisal report the subject property located: 2020, …

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APPRAISAL REPORT

THE SUBJECT PROPERTY LOCATED:

2020, 2026 and 2046 Solano Street,

Corning, California

REPORT PREPARED FOR

David Wolffs 2605 Tulare Avenue El Cerrito, CA 94530

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May 4, 2021 David Wolffs 2605 Tulare Avenue El Cerrito, CA 94530 Dear David: In accordance with your request, I have prepared an opinion of the Fair Market Value of the subject property, which is located at 2020 and 2026 and 2046 Solano Street, Corning California. I have valued this property as of the valuation date of April 7, 2021. This appraisal report is prepared in compliance with the Uniform Standards of Professional Appraisal Practices (USPAP) requirements. By reason of my investigation and by virtue of my experience, I have been able to form and have formed the opinion that the requested Fair Market Value of the subject property, as of the valuation date of April 7, 2021, is as follows:

FAIR MARKET VALUE………………………………………....………$1,500,000

Your attention is respectfully invited to the following report, which contains certain exhibits and factual data upon which the value conclusions are partially predicated.

Respectfully submitted,

____________________________ Michael H. Evans, FASA, FRICS California State Certified General Real Estate Appraiser #AG002019 Recertified until October 28, 2022

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TABLE OF CONTENTS TITLE PAGE LETTER OF TRANSMITTAL TABLE OF CONTENTS INTRODUCTION EXECUTIVE SUMMARY ............................................................................................................................ -4- THE APPRAISAL PROCESS ..................................................................................................................... -5- SCOPE OF APPRISAL............................................................................................................................... -6- COMPETENCY .......................................................................................................................................... -7- PURPOSE AND INTENDED USE OF APPRAISAL .................................................................................. -7- FAIR MARKET VALUE DEFINED .............................................................................................................. -7- IDENTIFICATION OF THE SUBJECT PROPERTY .................................................................................. -8- PROPERTY RIGHTS APPRAISED ............................................................................................................ -8- DEFINITION OF FEE SIMPLE ESTATE .................................................................................................... -8- DATE OF VALUATION ............................................................................................................................... -8- ASSUMPTIONS AND LIMITING CONDITIONS ........................................................................................ -8- TEHAMA COUNTY REGIONAL MAP ...................................................................................................... -11- TEHAMA COUNTY AREA ANALYSIS ..................................................................................................... -12- IMMEDIATE AREA MAP .......................................................................................................................... -24- IMMEDIATE AREA ANALYSIS ................................................................................................................ -24- MARKET TRENDS ................................................................................................................................... -25- NATIONAL FLOOD INSURANCE PROGRAM ........................................................................................ -28- GENERAL PLAN AND ZONING .............................................................................................................. -29- TAXES…….…. ......................................................................................................................................... -31- PHYSICAL DESCRIPTION SUBJECT PHOTOGRAPHS .................................................................................................................... -32- ASSESSOR'S PLAT MAP ........................................................................................................................ -40- PHYSICAL DESCRIPTION ...................................................................................................................... -41- STATEMENT OF OWNERSHIP ............................................................................................................... -46- HIGHEST AND BEST USE ...................................................................................................................... -46- ANALYSIS SALES COMPARISON APPROACH ....................................................................................................... -49- COST APPROACH TO VALUE ................................................................................................................ -85- INCOME APPROACH .............................................................................................................................. -87- RECONCILIATION OF VALUES .............................................................................................................. -90- CERTIFICATION OF VALUE ................................................................................................................... -91- ADDENDA SALES SUMMARY ................................................................................................................................... -93- SALES MAP ............................................................................................................................................. -94- LEGAL DESCRIPTION............................................................................................................................. -96- QUALIFICATIONS OF MICHAEL H. EVANS, FASA ............................................................................... -98- REFERENCES…….…. .......................................................................................................................... -103-

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EEXXEECCUUTTIIVVEE SSUUMMMMAARRYY Appraisal Type: Appraisal report Property Type: Retail property Location of Property: 2020 and 2026 and 2046 Solano Street, Corning California Assessor’s Parcel Numbers:

Assessor's Parcel Number(s)

Acres

071-080-008 1.40

071-080-009 0.48

071-080-010 0.84

071-080-015 0.29

Total 3.01

Land Configuration: Irregularly shaped Date of Appraisal: April 7, 2021 Zoning/General Plan: Commercial and Commercial Land Area: 3.01 gross acres Improvements: Retail buildings Highest and Best Use: Existing retail use Values: SALES COMPARISON APPROACH $1,462,000 COST APPROACH $1,916,000 INCOME APPROACH $1,528,000 Fair Market Value: $1,500,000

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THE APPRAISAL PROCESS The appraisal process is an orderly procedure of gathering information from the market which

will lead to an opinion of value. This information is obtained from many sources, but the best

source is through recent sales of similar type properties. All sales used are examined and

confirmed by, the buyer, the seller, or a party knowledgeable to the transaction. All pertinent

facts from the sales are analyzed, classified, and interpreted for use in the approaches to

value.

There are three approaches to value that are considered when arriving at an opinion of value

for real estate. These are the Sales Comparison Approach, the Cost Approach, and the

Income Approach.

The Sales Comparison Approach is a method of comparing recent sales of similar properties

to the subject property. This approach is based on the principle that the prudent investor would

pay no more for a property than the cost of acquiring a satisfactory alternative property that

possesses physical, economical, and financial comparability. The value of a particular property

tends to coincide to the value indicated by the actions of informed buyers and sellers in the

marketplace for similar properties. A number of sales are investigated in order to determine the

value of the subject property. A discussion and analysis of the sales are provided and

adjustments are typically made for date of sale, physical and economical characteristics, and

terms of sale or financing.

In the Cost Approach, the value of the land is estimated from market data. Next, the

replacement cost of the buildings is estimated and the accrued depreciation is estimated and

subtracted from the replacement cost estimate, providing an indication of the contributing value

of the buildings. The estimated value of the land, added to the contributing value of the

buildings, results in an opinion of value.

The Income Approach is based on an accurate measurement of a property's productivity under

typical management, a conversion of the yields into gross and net income, and capitalization of

this net income into an indication of market value. Whenever possible, all three approaches

should be used. One approach, however, will often be given greater weight than the others,

depending on the type of property, the most convincing factual data available, and the

objective of the appraisal.

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SCOPE OF APPRAISAL

This is an "appraisal assignment" as defined by the American Society of Appraisers and the

Royal Institution of Chartered Surveyors, within the standards of professional practice. The

services resulting from this assignment have been performed in a manner consistent with the

requirements of these organizations and the analysis, opinions, and conclusions are those of a

disinterested third party. All appropriate data deemed pertinent to the solution of the appraisal

problem has been collected, confirmed, and reported in conformity with the standards of

professional practice and the code of professional ethics of the American Society of

Appraisers. This appraisal report reflects a summary of the data, analysis, opinion, and

conclusions of the author.

For completion of this appraisal assignment, a preliminary survey is conducted, the property to

be appraised is inspected, and a search for relevant market data is completed. By use of

county records, a sales search is conducted for transactions involving properties which meet

the criteria deemed by the appraiser to be appropriate for comparison to the subject. In

addition, listings are obtained from knowledgeable sources within the area of the subject,

including real estate brokers and participants within the real estate market. The sales

information collected is then screened, inspected, confirmed, and analyzed for use within the

comparison process. Supplementary information such as comparative costs, rents, and market

data are collected from knowledgeable sources as necessary, as well as from files maintained

for this purpose within the office of the appraisal firm.

The data is analyzed through the appropriate approaches to value explained in the Analysis

section of this report and finally, the appraisal containing the description, analysis, and

conclusions is completed.

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COMPETENCY

The Uniform Standards of Professional Appraisal Practice (USPAP) require that prior to

accepting any assignment or entering into an agreement to perform any assignment, an

appraiser must properly identify the problem to be addressed and have the knowledge and

experience to complete the assignment completely or alternatively:

1. Disclose the lack of knowledge and/or experience to the Client before accepting the assignment. Take all steps necessary or appropriate to complete the assignment competently. 3. Describe the lack of knowledge and/or experience and the steps taken to complete the assignment competently in the report. The author of this report has had previous experience appraising real estate in the subject’s

area, and is familiar with the geographical area in which the property is located. Furthermore,

properties which are physically and economically similar to the subject property have been

common appraisal assignments. The author believes that he possesses the knowledge and

experience to complete this assignment competently.

PURPOSE AND INTENDED USE OF APPRAISAL

The purpose and intended use of this appraisal report is to assist the client in making financial

decisions regarding the subject property in estate related matters.

CLIENT AND INTENDED USER OF APPRAISAL

David Wolffs and designees are the clients and the intended users of this appraisal report.

The IRS is a third party unintended user of this appraisal report.

FAIR MARKET VALUE

Estate Tax: Treas. Reg. §20.2031-1(b).

“The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts. The fair market value of a particular item of property includible in the decedent’s gross estate is not to be determined by a forced sale price. Nor is the fair market value of an item of property the sale price in a market other than that in which such item is most commonly sold to the public, taking into account the location of the item wherever appropriate.”

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IDENTIFICATION OF THE SUBJECT PROPERTY

The subject property is identified in a legal description located in the Addenda section of this

appraisal report. The subject property is located at 2020 and 2026 and 2046 Solano Street,

Corning California. The Tehama County Assessor's office identifies the subject property as

Assessor's Parcel Numbers: 071-080-008; 009; 010; and 015. A copy of the Assessor’s Map is

located in the Physical Description section of this report. This map shows the basic outline of

the subject property, and its relationship with the surrounding area.

PROPERTY RIGHTS APPRAISED

The rights of the subject property to be appraised are for the fee simple estate. The definition

of these property rights are as follows:

DEFINITION OF FEE SIMPLE ESTATE

Absolute ownership unencumbered by any other interest or estate; subject only to the

limitations of governmental powers of taxation, eminent domain, police power, and escheat.1

DATE OF VALUATION

I have valued this property as of the inspection date, on April 7, 2021.

ASSUMPTIONS AND LIMITING CONDITIONS

1) That I assume no responsibility for matters legal in character, nor do I render any

opinion as to the title, which is assumed to be good and marketable. All existing liens and

encumbrances securing payment of money have been disregarded, and the property is

appraised as though free and clear under responsible ownership and competent management.

2) That although dimensions are taken from sources considered reliable and verifying,

measurements were made and such verification should not, in any way, be construed as a

survey. Areas not calculated by an engineer are not guaranteed accurate from an engineering

standpoint.

3) That legal descriptions, as furnished, are assumed to be correct.

1 The Appraisal of Real Estate, 12

th Edition, Page 68

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4) That information obtained for use in this appraisal is believed to be true and correct to

the best of my ability; however, no responsibility is assumed for errors or omissions, nor for

any information not disclosed which might otherwise affect the valuation opinion. However, the

appraiser reserves the right to consider and evaluate such data upon its disclosure.

5) That there exist no undisclosed restrictions or prohibitions concerning the possible use

or development of the property for any purpose for which it is available.

6) That no responsibility is assumed for any condition not readily observable from the

customary inspection of the premises, which condition might affect the valuation, except those

items specifically mentioned in this report.

7) That exhibits included herein are to assist in visualizing the property and the

surrounding area and are not to be construed to be the result of a survey.

8) That oil, gas, and mineral rights were not considered in making this appraisal unless

otherwise stated.

9) That possession of this report, or a copy thereof, does not carry the right of use for any

purpose for any but the client or their authorized agent without first obtaining the written

consent of the author.

10) That testimony or attendance in court, by reason of this appraisal with reference to the

property in question, shall not be required unless prior arrangements are made.

11) Unless otherwise stated in this report, the existence of hazardous material, which may

or may not be present on the property, was not observed by the appraiser. The appraiser

has no knowledge of the existence of such materials on or in the property. The appraiser,

however, is not qualified to detect such substances. The presence of substances such as

asbestos, urea-formaldehyde foam insulation or other potentially hazardous materials may

affect the value of the property. The value opinion is predicated on the assumption that there

is no such material on or in the property that would cause a loss in value. No responsibility is

assumed for any such conditions, or for any expertise or engineering knowledge required to

discover them. The client is urged to retain an expert in this field, if desired.

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The Four Forces

As indicated in the Appraisal Process section of this report the Four Forces constitute an

important portion of the valuation process. How these forces affect the region and/or

neighborhood has to be addressed. It is noted that regions and or neighborhoods can offer

different advantages to its inhabitants, and are said to differ in quality. The quality of a region

or a neighborhood can best be judged in terms of the needs and standards of its occupants.

The major factors that affect the quality of any area can be grouped as physical, economic,

social, and political in nature.

These major factors are often referred to as the four forces, which affect the Market Value of

any type of property within a defined region or neighborhood. Typically, the area surrounding

any property being appraised can only be understood via an analysis of the county, city or

town, and the immediate area where this property exists. It is noted that the immediate area

analysis is considered to be a direct indication of the way the four forces influence the overall

marketability of a property.

Based on the above, the author of this report researched and reported analyses of Tehama

County, the city of Corning and the immediate area where this property is located. They are as

follows on the next pages:

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TEHAMA COUNTY AREA MAP

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TEHAMA COUNTY AREA ANALYSIS

History & Location

Tehama County was created from parts of Butte, Colusa, and Shasta counties in 1856.

Named for the City of Tehama, some of the suggested roots for the word Tehama are “hot

lowlands” (Arabic) and “high water” (local Native

American).

Tehama County’s 2,976 square miles are

surrounded by snow-covered mountains, including

Mt. Shasta, Mt. Lassen, and the Trinity Mountain

Range. The Sacramento River runs through the

county, providing a variety of fishing and boating

activities. Red Bluff, the county seat, is located 135 miles north of Sacramento and 444 miles

south of Portland, Oregon. Surrounding Tehama County is Shasta County to the north,

Plumas and Butte to the east, Glenn to the south, and Trinity and Mendocino Counties to the

west.

Environmental Characteristics

Situated in the northern end of the Sacramento Valley, Tehama County consists of a broad,

low alluvial plain that is bordered on the east by

the Sierra Nevada Mountain Range and on the

west by the Pacific Coast Mountain Range. The

valley extends from Red Bluff and becomes

larger as it fans out south along the Sacramento

River. The Sacramento River drainage area

flows through the middle of Tehama County in a

north-south direction, with the North Coast Range lying west of the river and the foothills of the

Sierra Nevada lying east of the river. Tehama County has an annual rainfall of 21 inches per

year. In higher elevations, the county receives over 50 inches of rainfall, as well as a

considerable amount of snow.

Tehama County experiences cool, wet winters and hot, dry summers. The growing season in

the Sacramento Valley is approximately 260 days.

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Social Characteristics

As of 2017, the population for Tehama County as a whole was reported at 63,926 by the US

census. The population in Tehama County has been slowly increasing from 2008’s estimate of

62,419.

Transportation

State Highway 99E runs southeasterly between Red Bluff and Chico. Rail lines of the

Southern Pacific Railroad run through Tehama County on their way between San Francisco

and Portland. State Highway 36 branches off east and west from Red Bluff to serve the

mountainous and forested areas of the county. Truck services are provided by various freight

lines, as well as by United Parcel. The Greyhound and Continental Trailways bus lines serve

Red Bluff, with overnight service to Sacramento and San Francisco, as well as Reno, Nevada,

and Medford and Klamath Falls, Oregon.

The rest of the county is served by an extensive system of good county roads. Many of these

roads are asphalt paved.

Recreation

The county also has an extensive system of forest highways and roads utilized for logging,

lumbering, and recreation. Red Bluff is the official head of navigation for the Sacramento

River. It is 246 miles above Suisun Bay where the river empties into the San Francisco Bay.

The recreation minded will find many activities available in Tehama County. Year-round

fishing can be enjoyed in the Sacramento River which winds its way through the county.

Streams to the west, north, and east offer excellent trout fishing. The salmon spawning facility

located at the Red Bluff Diversion Dam is a multi-million-dollar Federal Government project.

This facility is one of the largest artificial salmon spawning areas in the world. Upon the

closing of this dam, the seasonal Red Bluff Lake is formed. Home to many summer

recreational activities, Red Bluff Lake is a favorite of many local residents. Lassen Volcanic

National Park, only minutes east of Red Bluff, contains rugged peaks, green meadows, trout

streams, and lakes that draw vacationers from near and far to hike in the cool air and camp at

the many developed sites.

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Mt. Lassen is the largest plug dome volcano in the world; however, all four types of volcanoes

that can be found in the world can also be found in the small area of the park. This active

volcano experienced its last eruption in 1921. In 1915, the peak had its largest eruption,

blowing volcanic material over seven miles up into the stratosphere. Large volcanic rocks from

this eruption are easily visible over a hundred miles away. Lassen Park looms 10,453 feet

above the valley floor with 160 square miles contained within the park boundaries. Lassen

Volcanic National Park is also very thermally active, with hot springs, fumaroles, and bubbling

mud pots.

Economic Characteristics

As of March 2021, the unemployment rate for Tehama County is 7.9%, which is an increase

compared to 2019’s 6.9%, as per the following charts:

April 16, 2021 Employment Development Department

March 2020 Benchmark Labor Market Information Division, (916) 262-2162

Data Not Seasonally Adjusted http://www.labormarketinfo.edd.ca.gov

Historical Civilian Labor Force

Tehama County

Notes: 1) Data may not add due to rounding. The unemployment rate is calculated using unrounded data.

2) Labor force data for all geographic areas for 1990 to 2021 now reflect the March 2020

annual revision (or benchmark) and Census 2014 population controls at the state level.

2021 Labor Force Employment Unemployment Unemp. Rate

January 25,220 23,190 2,040 8.1%

February 25,530 23,460 2,070 8.1%

March 25,240 23,240 2,000 7.9%

April May June July August September October November December Annual Averages

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January 25,910 24,240 1,670 6.4%

February 25,970 24,380 1,590 6.1%

March 26,100 24,310 1,790 6.9%

April 25,420 21,680 3,740 14.7%

May 24,860 21,790 3,070 12.4%

June 25,670 22,910 2,760 10.7%

July 25,110 22,520 2,590 10.3%

August 25,660 23,390 2,280 8.9%

September 25,560 23,490 2,070 8.1%

October 26,140 24,230 1,910 7.3%

November 25,360 23,700 1,660 6.6%

December 25,180 23,160 2,020 8.0%

Annual Averages 25,580 23,320 2,260 8.8%


January 25,510 23,660 1,840 7.2%

February 25,520 23,800 1,720 6.7%

March 25,420 23,660 1,760 6.9%

April 25,170 23,720 1,440 5.7%

May 25,320 24,030 1,300 5.1%

June 25,610 24,140 1,470 5.7%

July 25,430 23,900 1,530 6.0%

August 25,510 24,090 1,420 5.6%

September 26,050 24,860 1,190 4.6%

October 26,090 24,860 1,240 4.7%

November 25,740 24,490 1,250 4.9%

December 25,250 23,920 1,330 5.3%

Annual Averages 25,550 24,090 1,460 5.7%


January 25,340 23,690 1,660 6.5%

February 25,600 23,920 1,690 6.6%

March 25,330 23,600 1,730 6.8%

April 25,260 23,790 1,470 5.8%

May 25,290 23,990 1,300 5.1%

June 25,600 24,090 1,510 5.9%

July 25,380 23,800 1,570 6.2%

August 25,410 23,970 1,440 5.7%

September 25,790 24,530 1,260 4.9%

October 26,070 24,820 1,240 4.8%

November 25,510 24,220 1,280 5.0%

December 25,290 23,800 1,490 5.9%

Annual Averages 25,490 24,020 1,470 5.8%

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The following is a list of major employers in the County:

Employer Name Location Industry

Bell-Carter Olive Co Corning Olives (Whls)

Cal Fire Red Bluff Fire Departments

Forestry & Fire Protection Red Bluff Government-Forestry Services

Home Depot Red Bluff Home Centers

Pacific Gas & Electric Co Red Bluff Electric Companies

Petro Stopping Ctr Corning Truck Stops & Plazas

Precision Towing Red Bluff Wrecker Service

Raley's Red Bluff Grocers-Retail

Red Bluff Union High School Red Bluff Schools

Rolling Hills Casino Corning Casinos

Sierra Pacific Industries Corning Lumber-Manufacturers

Sierra Pacific Industries Red Bluff Lumber-Manufacturers

Sierra Pacific Industries Proberta Lumber-Manufacturers

Sierra Pacific Windows Inc Red Bluff Windows

St Elizabeth Community Hosp Red Bluff Hospitals

State Dept Forrestry & Fire Red Bluff Fire Departments

Tehama County Education Dept Red Bluff County Government-Education Programs

Tehama County Health Svc Red Bluff County Government-Public Health Programs

Tehama County Health Svc Red Bluff County Government-Public Health Programs

Tehama County Health Svc Agcy Red Bluff County Government-Public Health Programs

Tehama County Mental Health Red Bluff County Government-Public Health Programs

Tehama County Sherriff/Records Red Bluff Government Offices-County

Tehama County Social Svc Dept Red Bluff County Government-Social/Human Resources

Walmart Red Bluff Department Stores

Walmart Distribution Ctr Red Bluff Distribution Centers (Whls)

http://www.labormarketinfo.edd.ca.gov/aspdotnet/databrowsing/empDetails.aspx?menuchoice=emp&geogArea=0604000103&empId=004366282

























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Agriculture

The total gross value of Tehama County agricultural production in 2019 was $300,826,400,

which represents an increase of 19% ($48,883,600) from the 2018 total values.

Walnuts remained Tehama County’s top crop with an overall value of $88,039,200. The

production of table olives and prunes rebounded significantly from 2018 in which early spring

temperatures decreased production yields on these crops that year.

The top five highest value agricultural crops for Tehama County in 2019 were:

1. Walnuts $88,039,200 (38% increase in value due to increase in price and acreage)

2. Almonds $40,922,800 (7% decrease in value due to decrease in yield)

3. Beef Cattle $27,610,800 (1% increase in value due to increase in number of head sold)

4. Table Olives $29,535,500 (210% increase in value due to increase in yield)

5. Prunes $23,281,900 (33% increase in value due to increase in yield)

See the following chart on the next page showing a summary of the past few years:

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With an abundance of good pasture and range land, Tehama County is the hub of the cattle

and sheep industry in Northern California. There are more beef cattle in the county than

people. Cattle of all kinds contribute greatly to the economy of Tehama, with three of the top

nine income producers being livestock.

Governmental Characteristics

Tehama County is a general law county governed by an elected

five-member Board of Supervisors. The general population also

has the responsibility of electing the County Assessor, the

Auditor/Controller, the Treasurer/Tax Collector, the

Clerk/Recorder, the District Attorney, and the Sheriff/Coroner.

The Board of Supervisors is in charge of appointing the County

Administrator who oversees the day-to-day operations of the

County. The County Administrator in turn appoints the

Agricultural Commissioner and the County Counsel. Some of the

major responsibilities of the County government include the

Sheriff Department, the justice courts, Public Health, and Public

Works (including road maintenance). The major County agencies affecting real estate are the

Planning Commission and the Assessor’s office. Real estate assessments and taxes change

dramatically in California in 1978 with the passage of Proposition 13. All counties within

California were required to appraise all properties, except certain agricultural and timber

properties, at full market value as the property existed on March 1, 1975, with increases limited

to a maximum of 2% annually. By the passage of Proposition 13, the basic tax rate in

California is $1.00 per $100.00 of appraised value, plus any taxes levied to cover bond

indebtedness for county, city, school, or other taxing agencies. The County Assessor’s office

is responsible for the appraisal of each property within the constraints of Proposition 13 and

appraised values and tax rates are published annually after July 1st. The results of Proposition

13 have included some severe economic difficulties for county governments in northern

California.

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CITY OF CORNING ANALYSIS:

Location and History

Corning is one of three incorporated cities in Tehama County, located on Interstate 5. It is the

mid-point between Portland, Oregon, and Los Angeles, California. Chico is located

approximately 25 miles southeast of Corning, with Red Bluff located 17 miles to the north, and

Orland located 15 miles to the south.

During the mid-1800’s, many people were traveling to California. Though many sought gold,

several families settled down in the area and began agricultural production. The city was

named for John Corning, the nephew of Erastus Corning, president of the New York Central

Railroad for many years. He became Assistant Superintendent of the Central Pacific Railroad

in 1868. It was common practice for towns to be named in honor of railroad men. Corning,

New York, was named in honor of John's uncle, Erastus, and Corning, California, was named

in honor of John when he passed away in 1878.

Environmental Characteristics

The City of Corning is a rural community that covers 2.9 square miles within Tehama County.

The elevation is approximately 270 feet above sea level. On average, temperatures in the

warmer months of July and August reach into the mid to upper 90’s, whereas the coldest

months, December and January, can dip as low as the mid 30’s. The average annual

precipitation for Corning is 24.2 inches, producing an environment conducive to diverse

agriculture.

Woodson Bridge State Recreation Area is located on South Avenue, just six miles east of

Interstate 5 at Corning. Nestled in beautiful oak woods on the Sacramento River between

Chico and Red Bluff, Woodson Bridge offers year-round camping, fishing, boating, and hiking

in an unspoiled natural setting. Over a hundred plant species have been identified throughout

the park; the most prominent is the large valley oak. The California black walnut, Oregon ash,

black cottonwood, sycamore, and willow are also plentiful. Beneath the oaks and cottonwoods

along the river is a profusion of elderberry, wild grape, other shrubs, and wildflowers in season.

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Next to Woodson Bridge is Tehama County Park, which offers a broad sand-and-gravel beach

for wading, but the water is chilly even in summer, generally ranging from 58 to 60 degrees.

The county park also offers a free boat-launching ramp, picnic grounds, a cafe, and a privately

operated trailer park with utility hookups, a small store, fishing bait, a boat dock, and a boat

and motor rental are available next to the county park.

Social Characteristics

According to the US Census, the population for the City of Corning was 7,535 in 2018.

Transportation

Corning is serviced by the Southern Pacific Railroad. Interstate 5 runs north to south through

the city, a major thoroughfare for California. Greyhound Bus Lines also service the City of

Corning, providing transcontinental service. Corning Municipal Airport Rainbow Aviation

provides for charter flights and personally owned planes, but the closest commercial flights

may be taken from Redding or Chico airports.

Cultural Opportunities

Corning is well known as the Olive City, home to the Bell Carter Olive Company, which is the

world's largest ripe olive cannery. Tours of the cannery are available for tourists.

Corning's history is displayed throughout the Corning Museum, which is located within the

Corning Chamber of Commerce, Corning City Hall, and Corning Police Department in the

historic Hotel Maywood building. The Corning Museum preserves and exhibits artifacts that

represent the cultural heritage of Corning and Tehama County specifically and northern

California in general. Displays at the museum include German and Japanese mounted

machine guns, articles of period clothing, tools, pictures and other items dating back to the

early days of Corning. There are also many historical items from the Hotel Maywood.

The Corning Chamber of Commerce presents several community events. The annual May

Madness car show has been held for the past nine years, providing multiple competitions for

various stock cars from all over northern California. It is a weekend event hosted by several of

the city’s vendors, including such activities as a pancake breakfast, raffles, and award

presentations.

http://www.ohwy.com/ca/c/corning.htm

http://www.ohwy.com/ca/y/ytehama.htm

http://www.ohwy.com/ca/c/corning.htm

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Also hosted by the Corning Chamber of Commerce is the Corning Olive Festival. This annual

event is a full weekend in August, beginning on a Friday with the Olive Festival Parade, bed

and lawnmower races and a youth dance. Saturday includes a pancake breakfast, a walk

through Woodson City Park, music and entertainment, and children’s carnival games. There

are also arts, crafts, and food booths, with cook-off competitions, talent shows and the annual

Miss Corning Pageant. Corning also has 19 churches of various denominations, one library,

one newspaper, one radio station, 3 TV channels received direct, one TV cable system, three

banks, four parks, and two playgrounds. There are also several other recreational facilities

including a city swimming pool, tennis courts, and a bowling alley.

Educational Services

The Corning Elementary School District encompasses five elementary schools. Maywood

Middle School offers education services to grades 6-8. Olive View School consists of grades

3-5, West Street Elementary School includes kindergarten to third grade, and Rancho Tehama

School and Woodson Elementary School are open to students from kindergarten to fifth grade.

There are two high schools operating under the Corning Union High School District. Corning

Union High School has an enrollment of 986 students, grades 9-12. Centennial High School is

a continuation school with an enrollment of 67 students, grades 9-12.

Health Services

Corning has three physicians/surgeons, three dentists, two optometrists, two chiropractors,

and an ambulance service. There are three major medical centers located in nearby cities.

Mercy Medical Hospital and Shasta Regional Medical Center are located 50 miles north in

Redding. Enloe Medical Center is located in Chico, 25 miles southeast of Corning.

Economic Characteristics

The unemployment rate in Corning is 7.80% (U.S. avg. is 5.20%). Recent job growth is

Positive. Corning jobs have increased by 1.66 percent.

- 23 -

Government and Political Characteristics

The City of Corning operates under a Council-Manager form of city government. The City

Council is composed of a mayor and four other Council Members, who are elected by the

citizens of the City of Corning as their representatives to make the legislative and policy

decisions of the City, subject to the provisions of City Ordinances, Resolutions, and the

Government Code and the Constitution of the State of California. The City Council appoints the

City Manager who serves at their pleasure and who implements Council Policy. The Mayor

and City Council members also represent the City at official functions and in relationship with

other organizations.

The Mayor is elected by the voters every two years, and the City Council members are elected

for four year terms that overlap with the Mayor's term. Elections are held in November in even

numbered years. The California State Code requires every county and incorporated city to

have a general plan. This is a long range policy establishing a generalized pattern of future

land use which provides the basis for more detailed plans. Both the City and Tehama County

have a zoning code.

The City of Corning employs a small police department. Other jurisdictions include the

Tehama County Sheriff’s Department, the California Highway Patrol, and other state and

federal law enforcement agencies which have jurisdiction related to the many state and

environmental constraints.

The City of Corning is one of three incorporated cities in Tehama County. This agriculturally

dominated area also provides a full range of municipal services including Police, Fire, Parks

and Recreation, Library, Public Works and Municipal Airport. There is a continuing population

and economic growth which provides for increased development in the area.

A description of the immediate area of the subject property is as follows on the next page.

- 24 -

IMMEDIATE AREA MAP & IMMEDIATE AREA ANALYSIS

The subject property is located

in a commercial/retail area, on

the west side of the City of

Corning, in Tehama County.

The subject property has street

addresses of 2020 and 2026

and 2046 Solano Street,

Corning, Tehama County, CA.

The subject is located at the northeast corner of Edith Avenue and Solano Street, less

than ¼ of a mile east of the Solano Street and I-5 Interchange site. Easy access is

provided to the subject property via Solano Street, which is a four lane, asphalt paved

roadway that is city maintained.

The immediate area of the subject property consists mainly of commercial/retail types of

properties. Most of the facilities located along Solano Street consist of restaurants, gas

stations, banks, antique stores, delis, etc. As one advance further east of this roadway,

the usage starts getting intermixed with light industrial types of properties and older

homes, as Solano Street ends and joins with Hoag Road. However, it is noted that the

dominant usage in the immediate area of the subject property consists of a mixture of

commercial/retail usage.

The boundaries of the subject property are as follows: I-5 to the west, Hoag Road to

the east, and Solano Street to the north and south. Traffic is considered to be heavy

along this roadway since it has most of the commercial retail facilities in town, which is

considered advantageous to the property being appraised. This site has direct frontage

along Solano Street. All public utilities are available to this area including public water.

City sewer is available in the area as well.

- 25 -

Electrical power is provided by Pacific Gas & Electric Company, telephone service is

provided by Pacific Bell, and natural gas is also available. Solid waste collection is

available from several companies at competitive rates.

In conclusion, the subject property is located in a good retail/commercial area, at a very

close proximity to I-5, which provides it with the desired clientele, in general. As of the

valuation date, the subject property's neighborhood conforms to the general plan and

zoning ordinance.

MARKET TRENDS

As of the valuation date, there are limited sales of commercial lands and retail facilities

in the subject’s immediate area and in Corning in general; the Co Star system shows a

total of 16 retail sales since 2016 showing a range in sale price of $15.96 to as high as

$921.37 per square foot. There is not enough market data to establish a narrower range

for this type of property at this junction of this report, noting that comparable sales from

other competing markets will be used in valuing the subject property; in examining the

listings and sales however, one can state that the market although somewhat flat has

been at least stable. See the following comps statistics as extracted from the Co Star

system:

- 26 -

Market Conditions as Influenced by Current COVID 19 - Coronavirus Situation

The appraisal process is developed with a strong emphasis on completed transactions.

This is most reflected in the Sales Comparison Approach; however, the Cost Approach

and Income Approach are often reflective of somewhat lagging market data. Therefore,

rapid market changes are often not reflected in current market value appraisals.

USPAP requires analysis of current market conditions and credible value opinions are

dependent upon in-depth, ongoing, and current analysis of all factors that have

significant impact on market value.

On January 20, 2020, the first case of COVID-19 was confirmed in the state of

Washington and has rapidly increased throughout the nation as well as the world at an

exponential growth rate. As the virus has spread, significant impacts have been felt in

the stock market, oil prices, travel industry, lodging, food and beverage, and other

industries. The impact is rapid, significant, and as of now, the length, and eventual

overall damage is unknown. As of the date of report, market evidence (sufficient sale

data to indicate a market value impact) is not available and therefore current impact is

yet to be settled within the market. Several factors would of course contribute to this,

including the length of time the nation continues to be affected and the pace of the

eventual recovery once the virus is contained or growth is at least mitigated. Most

epidemiologists and medical professionals initially believed that within a 2-3-month

period, based upon government and private sector efforts, the virus spread would have

been mitigated. However, it is now clear that the far reaching effects of the pandemic

have yet to be fully realized and the duration of its influence is yet to be determinable.

- 27 -

Given the degree of uncertainty and current debate regarding the process of returning

to a more normal situation, there is a lack of adequate or sufficiently reliable market

data from which to develop a measurable economic impact. Even less evidence is

available how these historical and future potential events are affecting market

participants today. However, it is my opinion that overall, considering the market

statistics, the economic impact within the local agricultural, commercial and residential

real estate markets will be realized primarily in predominate marketing times.

Consequently, as of the effective date of the report, marketing times for properties

similar to the subject will likely experience an additional marketing time of 30 to 90 days

(or no additional marketing time if that is the case).

Exposure time, as reflective of the time exposed to the market prior to the effective date

would not be affected.

- 28 -

NATIONAL FLOOD INSURANCE PROGRAM

The subject property is located in Zone “X” a non flood zone area, as per FEMA panel

number 06103C1465H dated September 29, 2011. A copy of the FEMA map is as

follows:

FLOOD MAP

- 29 -

ZONING AND GENERAL PLAN

The subject’s parcel is zoned Commercial and the general plan is Commercial. A

description of the zoning ordinance, as originally received, is as follows:

Chapter 17.22 - C-3 GENERAL COMMERCIAL DISTRICT 17.22.010 - Generally.

This district classification is intended to be applied where general commercial facilities are

necessary for public service and convenience. The following specific regulations and the

general rules set forth in Sections 17.04.060 and 17.04.070 and Chapter 17.50 of this code shall

apply in all C-3 districts.

(Ord. 153 §11.01, 1959).

17.22.020 - Permitted uses.

In C-3 districts, permitted uses shall be as follows:

A. Uses permitted in the C-1 and C-2 districts;

B. The following and other uses which, in the opinion of the planning commission, are of a similar character:

1. Gasoline service stations; provided, that all operations except the servicing with gasoline, oil, air and water are carried on within a building,

2. Commercial repair garages, and incidental service uses,

3. Automobile sales and service, used car lots,

4. Wholesale distribution uses, warehouses,

5. Laundry and dry cleaning businesses using non-inflammable cleaning solvents,

6. Veterinary hospitals, animals to be kept in an enclosed structure,

7. Carwash;

C. All other commercial uses except those uses which are specified in Chapter 17.24 of this title as being permitted only in M-1 and M-2 districts;

D. Incidental storage and accessory uses, including repair operations and services, provided such uses shall be clearly incidental to the sale of products at retail on the premises, and shall be so placed and constructed as not to be offensive or objectionable because of odor, dust, smoke, noise or vibration.

E. Upon securing a conditional use permit, an on-site residence not to exceed one third the square footage of an active business establishment and occupied by the owner/proprietor or their agent, such residences are to be a secondary use to an active commercial enterprise, either upstairs or in the rear, with the storefront remaining commercial. No residential garages shall be permitted.

(Ord. 589 §7, 2001; Ord. 558 (part), 1996; Ord. 588 (part), 1996; Ord. 524 §§13, 13.1, 1992; Ord. 184 §1, 1962: Ord. 153 §11.02, 1959).

30

17.22.030 - Minimum height, bulk and space requirements.

In C-3 districts, the minimum height, bulk and space requirements shall be as

follows:

A. Lot area, width and coverage, none;

B. Side yard and front yard shall be as follows:

1. Side yard, none; except as required by the building code or other regulation, or where the side of a lot abuts an R district, the side yard shall not be less than ten feet.

2. Front yard, none; except where the frontage in a block is partially within an R district, the same setback shall be required as in the R district.

C. Rear yard, twelve feet where accessible from street, alley or parking lot for loading purposes. Building may project over rear yard area, providing fourteen feet clear vertical distance from ground level is maintained. Building Code and other regulations shall apply;

D. Building height limit, four stories, but not to exceed fifty feet; and provided, that buildings shall be confined within inclined planes sloping inward at a ratio of one foot horizontally to two feet vertically, such planes beginning directly above property lines at an elevation of thirty feet above average ground grade;

E. Loading area, twenty-foot alleys for loading and delivery purposes shall be provided adjacent to all lots to be used for commercial purposes. Ten feet of the required yard may be included in such alleys;

F. Parking requirements as required by Chapter 17.51;

G. Corner lots, side yard setback ten feet.

(Ord. 589 §3, 2001; Ord. 524 §13.2 1992; Ord. 153 §§11.10-11.14, 1959).

17.22.040 - Uses permitted with a use permit.

In C-3 districts, uses requiring use permits are as follows:

A. RV facilities, provided that:

1. An RV facility shall mean any use which derives income directly from providing an area or place in which to park mobile living and/or sleeping units specifically for the purpose of occupation and use of such mobile units.

2. RV facilities shall provide some landscaped exterior yard area for the use of guests.

B. Commercial communication towers and associated facilities.

(Ord. 590 (part), 2001; Ord. 566, 1997; Ord. 487 §1, 1989).

31

TAXES

The subject property is identified by the Tehama County Assessor’s Office as the

following Assessor’s Parcel Number. The tax data for the 2020/2021 tax year is as

follows:

Assessed Values

Assessor's Parcel

Number(s) Acres Land Improvements Personal Property Taxes Tax Rate

071-080-008 1.40 $71,073.00 $618,207.00 $0.00 $7,312.58 1.311200%

071-080-009 0.48 $27,975.00 $78,615.00 $0.00 $1,134.78 1.311200%

071-080-010 0.84 $43,060.00 $78,615.00 $0.00 $1,301.70 1.311200%

071-080-015 0.29 $24,749.00 $44,030.00 $0.00 $734.82 1.311200%

Total 3.01 $166,857 $819,467 $0 $10,484

According to the Assessor’s Office Records, the total market value of the subject

property is $986,324. It should be noted that the Assessor’s Office values are not

indicative of market value of the subject property. It is also noted that the Assessor’s

Office Records are merely a factoring of the values, as they existed in 1978 when

Proposition 13 was passed. Unless, a recent sale has taken place, or the property has

been transferred initiating a new appraisal report, these values are not normally

indicative of market value in today’s real estate market. Therefore, they were not

utilized in establishing a market value.

A typical purchaser would have the expectation that immediately after purchase, the

taxes would either increase or decrease dramatically depending on the purchase price.

Therefore, typically, the tax rate will be used in estimating the taxes as an expense item

in the Income Approach to value section, whenever this approach is applicable.

32

SUBJECT PHOTOGRAPHS

West side of property from across the street

West side of Napa Auto Parts

View of Toomes frontage

33

Vacant building main interior

Vacant building main interior

Vacant building east side

34

Vacant building east section

Vacant building ceiling

Street Scene along Solano Street

35

Toomes Road looking south

Southern exposure of Napa Auto Parts

Southeastern exposure of Quick Lube

36

Quick Lube waiting area

Quick Lube tire repair

Quick Lube north side

37

Quick Lube Lift

Northern edge of property

Napa Auto Parts retail display

38

Napa Auto Parts office

Napa Auto Parts stock room

39

AERIAL PHOTOGRAPH OF THE SUBJECT

40

ASSESSOR’S PLAT

41

PHYSICAL DESCRIPTION

Site Description

The subject property consists of four legal parcels in total. They are contiguous and

contain a combined total of 3.01 acres within their boundaries. The legal description for

this subject is lengthy and is located in the addenda section of this report.

The subject has three separate buildings with street addresses of 2020 and 2026 and

2046 Solano Street, Corning California. It has 589 feet of frontage along the north side

of Solano Street and extends 310 feet at its deepest point having this frontage along

Toomes Avenue. Solano Street and Toomes Avenue are four and three lane city

maintained asphalt paved roadways with concrete gutters, curbs, and sidewalks, storm

drains, and they provide several access points to the subject property’s lots. These lots

are fairly level being raised ½ a foot above street grade. Given the grading slope to

drain toward the street frontages, drainage is deemed to be adequate. There are

currently an estimated 100 painted parking spaces in front of the buildings. It should be

noted that there is enough unused parking lot square footage to have a total of 250

parking spaces possible. Located behind the building is a combination of paved loading

docks and gravel roadway, which will be described further below. A large portion of the

ground remains unused as of the valuation date.

Improvements

As of the valuation date, the subject property is improved upon with three buildings.

Each of these buildings is identified in the sketch shown later in the report. Each of

these buildings will be described below using their address:

2020 Solano Street-Vacant

This 12,840 square foot, metal framed building was built in 1960. This structure has a

concrete slab foundation, concrete siding and a low-level gable roof design with a rolled

composition roof covering.

42

This building was originally designed as a retail store with one retail display main open

room and several smaller offices. The ceilings are acoustical tile with fluorescent light

fixtures. The current flooring is smooth concrete and ready for new flooring and the

renovations necessary for a new tenant. This building is centrally heated and air

conditioned. The building also has 720 square feet of covered walkway. Overall, this

building is in fair condition as of the valuation date.

There is one 14’ wide roll up door at the north end of the building for moving material in

and out of the building. There is also a 300 square foot dock and 1,095 square foot

paved truck loading well and a 270 square foot lean to at the side of the dock for

storage. The parking lot at the front and/or south side of the property is 103,502 square

feet and in good condition as of the valuation date. The rest of the subject’s land, some

40,809 square feet, is gravel paved parking to the west of the 2026 Solano Street.

2026 Solano Street-Napa Auto Parts

This 11,875 square foot metal framed structure was built in 1960. This structure has a

concrete slab foundation, a combination of stone and concrete siding and a straight

gable roof design with a metal roof covering. The ceilings are an acoustical tile metal

suspension framed system with typical light fixtures. The floor coverings are vinyl and

the building is centrally heated and air conditioned, with wall air conditioners in the

offices. There are two 14’ wide roll up doors, one at the west side of the building and

the other at the north side of the building with a 540 square foot gated open storage

area attached. On the south side of the building there are 500 square feet of covered

walkway. Overall, this building is in average condition as of the valuation date.

2046 Solano Street-Quick Lube

This 1,875 square foot metal framed structure was built in 1960, originally as a gas

station and was later converted to the Quick Lube. This structure has a concrete slab

foundation, metal siding and a straight gable roof design with a metal roof covering.

43

This building has a men’s and women’s bathroom and an office/waiting area which have

wood panel walls, concrete floors and typical lighting. There are two 14’ wide drive

through roll-up doors as well as a lift. The office/waiting area has a wall unit for air

conditioning. There is a metal canopy south of the Quick Lube, which is used for

parking and measures 1,875 square feet in size. Overall, this building is in fair to poor

condition as of the valuation date.

It is noted that this property is a retail center with two large retail buildings and the old

gas stations, noting that there is sufficient room for additional units to be built on the

property.

A sketch of the subject’s improvements is as follows on the next pages:

44

SKETCH OF SUBJECT

46

STATEMENT OF OWNERSHIP

According to the Tehama County Assessor’s Office, and a search by RealQuest of

County Records, the subject property is currently owned by Pearl Wolff's, as Trustee of

the Survivor's Trust subdivision of The Valter and Pearl Wolffs 1973 Trust dated

November 19, 1973, under Amended and Restated Declaration of Trust dated August

1991 et al. As per the author’s research, no transfers have occurred on the subject

property during the last three years, as of the valuation date.

INCOME AND EXPENSE INFORMATION

As of the valuation date, 2020 Solano Street is listed for $4,200 per month on a triple

net basis. According to the broker there have been several interested parties with one

he is currently working on to create an offer to the owner. Note that as per the broker,

the landlord was willing to offer a TI allowance in the neighborhood of $3-4/SF. There is

a letter of intent that was just received and even though it does not have any request for

TI’s, it does have some front loaded free rent for 9 months, which is about equal to the

TI’s the landlord was willing to spend.

2026 Solano Street is leased out to Napa Auto Parts; a copy of the lease is located in

the author’s files. This lease is for a base rental rate of $3,100 per month and/or $0.26

per square foot. The lease has another three years on the original lease with the

agreement having one additional five-year term option. The lease is a modified net

lease leaving the landlord responsible for the repair of surface and structural elements

of the roof, foundations and bearing walls as well as the property taxes.

Additionally, 2046 Solano Street is leased to Quick Lube on a month-to-month gross

basis lease at $600 per month and/or $0.32 per square foot.

Note that there were no expenses reported to the author of this report; however, the

income and expenses of the subject property will be estimated and further analyzed in

the Income Approach to value section of this report.

47

At this point, it is noted that the subject is generating $44,400 in gross income with one

of the suites being vacant, and some tenant improvements being negotiated at $3 to $4

per square foot, which would indicate a discount of $51,360, assuming $4.00 was

agreed to. Even though the author believes this is high, it is not uncommon in the

Corning market, especially as of the valuation date, and under the COVID restrictions

and risks associated with retail types of investments.

HIGHEST AND BEST USE

Highest and Best Use is identified as the reasonably probable and legal use of vacant

land or an improved property, which is physically possible, appropriately supported,

financially feasible and that results in the highest value. The four criteria the highest

and best use must meet are legal permissibility, physical possibility, financial feasibility,

and maximum profitability.2

Legally Permissible As Vacant:

The zoning of the subject property is C3. The zoning of the subject allows for a range of

retail, commercial and industrial uses.

Legally Permissible As Improved:

The current uses are legally permissible to the existing zoning and general plan of the

subject property, as of the valuation date.

Physically Possible As Vacant:

The soils, topography, location, and size suggest a range of retail, commercial and

industrial uses. There is a wide range of physically possible uses that are available for

the subject property, as vacant, as of the valuation date, with the retail/light industrial

uses being the most likely due to the surrounding commercial community.

2 The Dictionary of Real Estate Appraisal, 12

th Edition, Page 306

48

Physically Possible As Improved:

As improved, the existing buildings limit the subject’s site to a retail facility, noting that

one of the buildings needs to finish its infill.

Feasible As Vacant:

As vacant, there is a wide range of retail, commercial and industrial uses that would be

feasible for the subject property.

Feasible As Improved:

The existing improvements for the subject are financially feasible as proven by one of

the leased buildings, noting that the largest suite needs to finish its infill so it can

accommodate another tenant, which will boost the financial feasibility of this site.

Maximum Productive As Vacant and As Improved:

The maximum productive use of the subject property, as vacant, would be for a range of

retail, commercial and industrial uses.

As improved, the maximum productive use of the subject property would be for its

existing buildings, noting that one of the buildings needs to finish its infill so it can

accommodate another tenant, which will boost the maximum productive use of this site.

In conclusion, the four tests indicate that the existing use is the highest and best use of

the subject property, as of the valuation date.

49

SALES COMPARISON APPROACH

The Sales Comparison Approach to value is that value a typical purchaser would be

willing to pay for a property as of the valuation date, in order to determine what the

subject property would sell for in today's real estate market. The direct Sales

Comparison Approach to value is based on the principle of substitution, that is, a

property is replaceable in its market. Its value tends to be set at the cost of acquiring an

equally desirable substitute property, assuming no costly delay in making the

substitution. This estimate involves the collection and analysis of sales of properties

with characteristics similar to those on the property being appraised. The validity of this

approach is very much dependent on the availability of this data and its relevancy and

quality. Analysis of the sales is based upon the following criteria:

A) Property rights conveyed

B) Financing terms

C) Conditions of sale

D) Market conditions

E) Location

F) Physical characteristics

G) Economic characteristics

H) Non-realty components

The assumption is that the sales are similar to the stated objectives of the report, the

market value definitions, and the above mentioned criteria, unless otherwise stated. In

making the necessary adjustments, sales are always adjusted to the subject and not

vice versa. This method makes adjustments where needed, and uses a specific unit of

comparison. For properties such as the subject, the dollar per square foot of land is

considered to be the most appropriate unit of comparison for the land’s valuation. In

researching the marketplace, the following sales were found and they are reported and

analyzed on the next pages.

50

PLAT - SALE NO.1

51

SALE NO. 1 EVANS APPRAISAL SERVICE, INC.

County: Tehama Sale Number: 2017COM00219

Use: Commercial lot Exposure Time: 390 DOM

Location: South Ave, Corning MLS: LISTING ID: CH16188056

SALE DATA:

Grantor: Margaret Rose Justice and Kenneth Daniel Griswold

Grantee: Takhar Properties Petroleum LLC

Document: 2017-15881 Recorded: 12/20/2017

APN: 087-090-077 Zoning: HC

Transfer Tax: $770.00 Full Value Indicated Equity: $700,000

Confirmed Price: $700,000 Confirmed By: Corwyn Sheridan

SP Adjustment: None noted. Confirmed With: Public Records/Listing agent- Paul Farsai, 342-7337

Terms: Cash sale.

52

PROPERTY DATA:

Gross Ac: 8.75 Topography: Level

Buildings and Improvement

Description Comments Age Cond Size (SF)

Class St Un

Description Size (SF) RCN Contrib RCN %

Totals Not Available Not Available Not Available

$/Sq.Ft (vacant land only) $1.84

$/Acre (Land only) $80,000.00

INCOME ANALYSIS:

Type of Operation: Vacant Land - Income and Expense Information not available

Other Information: Sewer/water available, but not to site; city did not have sewer and water available on that side of the freeway. Buyer-working on it to put a gas station on there, worked with city to bring water to other side. Seller- had a lease with it before, made it owner financing, and became old, so they wanted to sell it before they passed away. City is working on bringing water and sewer over, but it is very expensive.

COMPANY INFORMATION:

Appraiser: Michael H. Evans, FASA, FRICS

Analysis: Due to the larger size, the land value indicated by this sale is deemed to be inferior to the subject on the dollar per square foot of land unit of comparison basis.

53

PLAT - SALE NO.2

54




Location: 0 Hwy 99 W, Corning MLS: LISTING ID: CH17176628

SALE DATA:

Grantor: WOLD STEVEN N & DORIS C TRRT

Grantee: VILLAGE KEEPER 401K PSP TRUST/GAUMER DEBBIE (TE)


APN: 069-210-018 Zoning: City



SP Adjustment: None noted. Confirmed With: Public Records/Listing agent- Blake Anderson, 864-0151

Terms: Cash sale.

55

PROPERTY DATA:




Class St Un





INCOME ANALYSIS:


Other Information: Electricity, Gas, Sewer, Water to street. Seller- older wanted some money buyer- looking to build on it



Analysis: Due to the inferior location, the land value indicated by this sale is deemed to be inferior to the subject on the dollar per square foot of land unit of comparison basis.

56

PLAT - SALE NO.3

57



Use: Commercial lot Exposure Time: Not Available

Location: 3129 S Highway 99W, Corning MLS: Not Available

SALE DATA:

Grantor: THUEMLER FRED T LIVING TRUST

Grantee: OROZCO-SANCHEZ IRIS DAYANNA

Document: 2018- 12386 Recorded: 11/5/2018

APN: 087-180-005-000 Zoning: M1-SP


Confirmed Price: $90,000 Confirmed By: Nicole Evans

SP Adjustment: None noted. Confirmed With: Public Records/Ken Robinson

Terms: Cash sale.

58

PROPERTY DATA:




Class St Un





INCOME ANALYSIS:


Other Information: Power was at roadside. There was a previous fire and demolition of an older building, well and septic were there but no tests were done. Condition was unknown on both of those. The buyers were planning to move an existing business (truck/chrome polishing) building. The sellers inherited the property and didn't need it. Confirmed with Ken Robinson




59

PLAT - SALE NO.4

60



Use: Commercial/Residential Lot Exposure Time: 752 DOM

Location: SE Corner of Highway 99W and Fig Ln, Corning

MLS: LISTING ID: SN19070838

SALE DATA:

Grantor: GIAMBRONI FAMILY TRUST

Grantee: RURAL COMMUNITIES HSNG DEV COR


APN: 071-250-032 Zoning: R4


Confirmed Price: $170,000 Confirmed By: Nicole Evans

SP Adjustment: None noted. Confirmed With: Public Records/Tara Ellis

Terms: Cash sale.

61

PROPERTY DATA:




Class St Un





INCOME ANALYSIS:


Other Information: No utilities on site but were all out on the street. The owner had passed away and the family sold the land. Buyers are Rural California Housing Plan, they are planning on building an apartment complex. Confirmed with Tara Ellis.




62

PLAT - SALE NO.5

63




Location: 1905 Solano St, Corning MLS: LISTING ID: SN20097055

SALE DATA:

Grantor: DIAZ JUVENTINO T

Grantee: MUHAMACH AJIJAH


APN: 071-151-018 Zoning: C1 and C2



SP Adjustment: None noted. Confirmed With: Public Records/Listing Agent- Alberto Hernandez, 321-0358

Terms: $24,000

64

PROPERTY DATA:




Class St Un





INCOME ANALYSIS:


Other Information: Site has water and sewer, agent is not sure if there is power there. Power to street. Seller- did not think it was a good investment and didn’t want to be in Corning anymore. Site used to have a building that burned down, he just re listed it for $150,000. Used to be a Greyhound bus station.



Analysis: Due to the smaller size noting the excellent location, the land value indicated by this sale is deemed to be superior to the subject on the dollar per square foot of land unit of comparison basis.

65

SALES ANALYSIS

After analyzing the sales, the following was concluded:

Sales Chart

SALE# SALE DATE

ADDRESS SALE PRICE

ACRES $/ SF LAND ONLY

COMMENTS

1 12/20/2017 South Ave $700,000 8.75 $1.84 Inferior

2 1/30/2018 0 Hwy 99 W $60,000 1.69 $0.82 Inferior

3 11/5/2018 3129 S Highway 99W

$90,000 2.50 $0.83 Inferior

4 7/3/2019 SE Corner of Highway 99W and Fig Ln

$170,000 1.96 $1.99 Inferior

5 2/16/2021 1905 Solano St

$49,000 0.18 $6.25 Superior

$/Sq. Ft Analysis

In concluding a value for the subject’s site, based on the dollar per square foot of land

unit of comparison, it is noted that in this case, the value of this property is bracketed

between the range of sales number four and five. These comparables indicated a range

of values of $1.99 to $6.25 per square foot of land, with a value equal to $4.00 per

square foot of land being considered appropriate for the subject property, as of the

valuation date.

A breakdown of this $4.00/SF analysis is as follows.

Sales Comparison Approach – Dollar Per Sq. Ft Comparison Basis / Land Only

131,115.6 sq. ft. x $4.00 per sq. ft. = $524,462

Totaled and Rounded to= $524,000

SALES COMPARISON APPROACH TO VALUE-VACANT LAND: $524,000

66

SALES COMPARISON APPROACH TO VALUE – IMPROVED

The Sales Comparison Approach - improved is nearly identical to the Sales Comparison

Approach - vacant. The only difference is that the improvements on the sales are

compared to the improvements on the subject property for differences in size, quality of

construction, income characteristics, utility and lot size.

In researching the market place, the following sales of commercial buildings were

considered to be comparable to the subject property. In analyzing these sales, it is

noted that the best method of analysis considered was the Comparative Unit. This

method makes adjustments where needed, and uses a specific unit of comparison, (in

this case the overall dollar per square foot of building unit of comparison basis is being

used). The sales are ranked along with the subject, with its value typically bracketed

between two of the sales. These sales are as follows on the next pages:

67

PLAT - SALE NO.6

68

SALE NO.6 EVANS APPRAISAL SERVICE, INC.


Use: Retail Exposure Time: 201 DOM

Location: 755 Walnut St, Red Bluff MLS: Co Star

SALE DATA:

Grantor: KERNER MICHAEL P 2001 TRUST

Grantee: PATEL FAMILY TRUST



Transfer Tax: $2,777.50 Full Value Indicated Equity: $2,525,000

Confirmed Price: $2,525,000 Confirmed By: Corwyn Sheridan

SP Adjustment: None noted. Confirmed With: Public Records/Hugh Kelly 212-710-5252

Terms: Cash sale.

69

PROPERTY DATA:

Gross Ac: 0.96 L/B Ratio: 4.63 /1 Topography: Level



Class St Un

Retail Good condition. 2013 Average 9,026 D 1 1


Retail 9,026 $2,200,000 $2,065,000 93.86%

Totals $2,200,000 $2,065,000 93.86%

$/Sq.Ft (building only) $228.78

$/Sq.Ft (land & building) $279.75

$/Sq.Ft (land only) $11.00


INCOME ANALYSIS:

Type of Operation: Retail

Potential Gross Income: Not Available Vacancy Rate: 0%

Effective Gross Income: Not Available Total Expenses: Not Available

Net Op Income : Not Available Ro: Not Available

GIM: Not Available EGIM: Not Available

Other Information: This is the sale of a NNN leased investment property. The current tenant, Dollar General is locked into a long term lease. 10.1 Years Remaining in the Initial 15 Year Lease Term; the agent did not know the rental rate of this property.



Analysis: Due to the superior location, condition, smaller size and long term tenancy, this sale is deemed to be superior to the subject.

70

PLAT - SALE NO.7

71



Use: Industrial Exposure Time: 108 DOM

Location: 1530 & 1520 1540 & 1550 Schwab Street, Red Bluff

MLS: 20191239

SALE DATA:

Grantor: COLLIVER D F & C 1999 TRUST

Grantee: MISCKE LLC


APN: 035-490-060; 059 Zoning: Light Industrial


Confirmed Price: $1,300,000 Confirmed By: Corwyn Sheridan

SP Adjustment: None noted. Confirmed With: Public Records/Shane Budden 520-2770/Ken Robison 527-1111

Terms: Cash sale.

72

PROPERTY DATA:




Class St Un

Industrial buildings 4 buildings each has a total of 6,000 SF. 1,500 SF office

balance of buildings is warehouse areas.

2004 Average 24,000 S 1 4


Industrial buildings 24,000 $1,200,000 $750,000 62.50%

Totals $1,200,000 $750,000 62.50%





INCOME ANALYSIS:

Type of Operation: Industrial

Potential Gross Income: $184,596 Vacancy Rate: 25% / ($46,149)

Effective Gross Income: $138,447 Total Expenses: $20,767 / (15.00%)

Net Op Income : $117,680 Ro: 9.05%

GIM: 7.04 EGIM: 9.39

Other Information: Unit 1-6,000sf, $4421/month, Unit 2-6,000sf, Vacant (at owners choice-owner used it as a yard sale area), Long Term leases, Tenant paid expenses; the other 12,000 SF building has the following: Unit 1-6000sf, $2,800/month; Unit 2-6,000sf, $3823/mo.



Analysis: Considering the land to building ratio versus the better infill of this sale compared to the subject, this sale is deemed to be only slightly inferior to the subject.

73

PLAT - SALE NO.8

74



Use: Retail Exposure Time: 89 DOM

Location: 1055 Main Street, Red Bluff MLS: 2019-1326

SALE DATA:

Grantor: KEMEN CLIFFORD T

Grantee: CASTEEL DWAYNE E/CASTEEL BARBRA S





SP Adjustment: None noted. Confirmed With: Public Records/Max Froome 200-4655

Terms: $569,000 / PRIVATE PARTY.

75

PROPERTY DATA:




Class St Un

Retail and warehouse 10,660 + 1,440 mezzanine; no deferred maintenance.

Warehouse- 8,660sf (plus mezzanine), Retail- 2,000sf

1985 Average 10,660 D 1 1


Retail and warehouse 10,660 $425,000 $297,000 69.88%

Totals $425,000 $297,000 69.88%





INCOME ANALYSIS:

Type of Operation: Retail





Other Information: Vacant at time of sale. Sellers-reallocating assets buyers-business opportunity. Was originally built as car dealership and was used as Red Bluff Auto Electric for years prior to sale. Bldg. has 3 phase power.



Analysis: Due to the smaller size, this sale is deemed to be superior to the subject.

76

PLAT - SALE NO.9

77



Use: Retail and industrial Exposure Time: 388 DOM

Location: 1355 Vista Way, Red Bluff MLS: 2020005595

SALE DATA:

Grantor: HELSER TIMOTHY R

Grantee: FREDE FAMILY LIVING TRUST





SP Adjustment: None noted. Confirmed With: Public Records/Robin Fox 520-9600

Terms: Cash sale.

78

PROPERTY DATA:




Class St Un

Retail Industrial Average condition, no deferred maintenance.

unk Average 8,900 S 1 1


Retail Industrial 8,900 $356,000 $225,000 63.20%

Totals $356,000 $225,000 63.20%





INCOME ANALYSIS:

Type of Operation: Retail and industrial





Other Information: Used to be a paint shop; then an auto shop. Vacant at time of sale, was an auto shop for several years before. Sellers-moved out of state; buyers-using as an investment. Located in the airport business industrial park.



Analysis: Due to the inferior location, this sale is deemed to be inferior to the subject.

PLAT – SALE NO.10



Use: Retail and industrial Exposure Time: Not Available

Location: 22690 and 22686 Antelope Blvd, Red Bluff

MLS: Not Available

SALE DATA:

Grantor: Stan Neitling Trust.

Grantee: Charles Geyer


APN: 039-312-019; 020 Zoning: C2


Confirmed Price: $1,381,000 Confirmed By: MHE

SP Adjustment: None noted. Confirmed With: Purchase agreement

Terms: $898,000 conventional loan obtained from WESTAMERICA BK.

PROPERTY DATA:




Class St Un

Retail and industrial buildings

1976 and 1995 are years built; 22690 Antelope Blvd is vacant. However 22686 Antelope Blvd is leased out to AT&T who purchased another company and then assumed the existing lease a copy of which is located in the author’s files. This lease is for a base rental rate of $3,440 per month and/or $0.26 per square foot. A large amount of remodeling was completed for the tenant, which has and is being amortized over the lease at a rate of $2,402.76 and/or $0.19 per square foot of building for a total of $0.45 per squarer foot. The lease has another three years on the original lease with the agreement having two additional five year term options. The landlord pays the property taxes and any exterior walls roof structural maintenance as well as management.

unk Fair to average

24,640 S 1 2


Retail and industrial buildings

24,640 $1,911,106 $935,000 48.92%

Totals $1,911,106 $935,000 48.92%





INCOME ANALYSIS:

Type of Operation: Retail and industrial

Potential Gross Income: $133,548 Vacancy Rate: 48% / ($64,103)

Effective Gross Income: $69,445 Total Expenses: $15,278 / (22.00%)

Net Op Income : $54,167 Ro: 3.92%

GIM: 10.34 EGIM: 19.89

Other Information: 22686 Antelope Blvd: This 12,936 square foot metal framed structure was built in 1995. This structure has a concrete slab foundation, metal siding and a straight low level gable roof design with a metal roof covering. This building was originally designed as a retail store with one main open room. However, it has been remodeled in 2016 into Flex industrial building with 18% (2,352 square feet) finished office space at the south end of the building and the rest being open warehouse storage space. The finished office space has divided wood framed sheet rocked walls, which have been taped, textured and painted. The ceilings are an acoustical tile metal suspension framed system with light fixtures strategically placed within the frame. The floor coverings are a combination of vinyl in the two bathrooms, and carpet in the offices and conference rooms. This portion of the building is centrally heated and air conditioned. Overall, this area is in good condition as of the valuation date. The north end of the building has smooth concrete unfinished floors, insulated and unfinished walls and ceiling developed for warehouse storage space with some swamp cooling and blast furnaces for heat. Overall, this section is in average condition. There are two 14’ wide roll up doors at the north end of the building for moving material in and out of the building. There is a secure fenced and paved loading and storage yard at the rear of the building. The total asphalt paving including this storage yard is 30,156 square feet. The older parking lot at the front and/or south side of the property is older and in poor condition as of the valuation date needing to be re-chipped and seal coated. The rest of the subject land, some 7,125.84 feet is undeveloped and unused land. The land to building ratio for this section of the subject property is 3.92 to 1. Overall the building was remodeled in 2016 for the new tenant for this building. 22690 Antelope Blvd: This 11,704 square foot metal framed structure was built in 1976. This structure has a concrete slab foundation, metal siding and a straight low level gable roof design with a metal roof covering. This building was originally designed as a retail store with one main open room. It has a small 392 square foot men’s and women’s bathroom and an office in the southwest corner of the building. This building has been gutted and is currently cold shelled on the inside and in fair condition. The floor is smooth concrete wall and the ceilings are insulated, but remain unfinished. Overall this building is in fair condition needing remodeling on the interior prior to a tenant or owner using this building. It is noted that the metal suspension framed system light fixtures strategically placed is still in place. At one time, some of the building had central air conditioning. Whether this still works is unknown. There is a loading dock with well at the north end of the building with one 14’ wide roll up doors at the northeast corner of the building. The total asphalt paving is 22,332 square feet. The parking lot at the front and/or south side of the property is older and in poor condition as of the valuation date needing to be re-chipped and seal coated. The rest of the subject land, some 18,074 feet is undeveloped and unused land. The land to building ratio for this section of the subject property is 4.58 to 1. Overall, this building needs remodeling and is in fair to poor condition as of the valuation date and is vacant.



Analysis: This sale has similarities in use, vacancy and one of the buildings needing infill, with this property being slightly superior from a location standpoint.

IMPROVED SALES ANALYSIS After analyzing the improved sales, the following was concluded:

Improved Sales Chart SALE# ADDRESS SALE

PRICE SALE DATE ACRES BUILDINGSQFT

(Total) $/ SF LAND & BLDG

CAP RATE

COMMENTS

6 755 Walnut St $2,525,000 12/17/2018 0.96 9,026 $279.75 NA Superior

7 1530 & 1520 1540 & 1550 Schwab Street

$1,300,000 1/10/2020 1.97 24,000 $54.17 9.05% Inferior

8 1055 Main Street

$669,000 1/17/2020 0.40 10,660 $62.76 NA Superior

9 1355 Vista Way

$300,000 8/5/2020 1.00 8,900 $33.71 NA Inferior

10 22690 and 22686 Antelope Blvd

$1,381,000 1/14/2021 2.55 24,640 $56.05 3.92% Superior

The subject property is an averagely maintained facility, which has a good location being on

Solano Street and being surrounded by commercial and retail uses, with good access and

good parking amenities. In analyzing the researched market sales, the value of the subject is

bracketed between Sale Seven and Sale Ten. These comparable sales indicated a tight range

of $54.17 to $56.05 per square foot of building. Considering the location and condition, an

overall value of $55.00 per square foot of building is considered appropriate for the property

being appraised in its As Is condition, which takes into account the infill needed on the vacant

suite of the subject, along with also noting that Sale ten had similar conditions and dynamics

with one of its largest suite needing infill, as well as being vacant.

The value opinion of the subject property, via the Sales Comparison Approach to value -

Improved is as follows:

Sales Comparison Approach to Value – As Is - Improved:

26,590 SF x $55.00 = $1,462,000 (Rounded)

SALES COMPARISON APPROACH TO VALUE-IMPROVED……….……………..$1,462,000

COST APPROACH TO VALUE

The Cost Approach to value estimates the replacement cost new of the improvements and

deducts the appropriate depreciation to arrive at the present value of the improvements. The

land value is then added to the depreciated value of the improvements for a total value from

the Cost Approach to value.

In analyzing the subject property's improvements, the author relied on his own experience in

the building cost industry, as well as relying on the guidelines set forth by the Marshall Swift

Cost Handbook, a nationally recognized firm with over 50 years of experience in the building

cost industry in developing the Comparative Unit Method.

In estimating the depreciation, it is noted that there are three forms of depreciation. They are

physical deterioration, functional obsolescence, and external obsolescence. A description of

all three forms of depreciation follows:

Physical deterioration is a form of depreciation and is the loss in value resulting from wear and

tear in operation and exposure to the elements.

Functional obsolescence is a loss in value caused by factors inherent within a building or

building equipment unit, such as changes in construction materials and techniques, which

result in excess capital costs in existing facilities, lack of full use of space, and inability to

expand or update the property.

External obsolescence is an incurable loss in value caused by negative influences outside the

property itself, such as general economic conditions, availability of financing, or inharmonious

property uses.

It is noted that the subject property suffers only from physical depreciation. To estimate the

physical depreciation, the author utilized the effective Age-Life method. This method uses the

typical life expectancy of an improvement and the effective age of said improvement to

estimate the amount of depreciation present.

The life expectancy tables from the Handbook estimates the total economic lifespan of the

subject’s buildings at 45 to 50 years. As of the valuation date, the author observed some

physical deterioration of the subject’s improvements and estimated the effective age of the

improvements at 20 to 40 years. Therefore, the remaining economic life for the subject

property is at a range of 5 to 25 years depending upon the maintenance received. The

balance of the other components of the subject will be handled on a case by case basis. The

Comparative Unit Method of the Cost Approach to value is as follows:

Cost Approach to Value

Description of Improvements Size $Per Unit

Cost New Eff. Age

Econ Span

% Dep.

Dep. Depreciated

Value

2020 Solano Street 12,840 $89.24 $1,145,890 25 45 55.56% $636,605 $509,284

covered walkway 720 $17.13 $12,337 25 45 55.56% $6,854 $5,483

Dock 300 $28.56 $8,567 25 45 55.56% $4,760 $3,808

Loading well 1,095 $11.42 $12,508 25 45 55.56% $6,949 $5,559

Lean To 270 $19.99 $5,397 25 45 55.56% $2,999 $2,399

2026 Solano Street 11,875 $89.24 $1,059,770 20 45 44.44% $471,009 $588,761

Open Storage 540 $25.70 $13,879 20 45 44.44% $6,169 $7,711

covered walkway 500 $17.13 $8,567 20 45 44.44% $3,808 $4,760

2046 Solano Street 1,875 $128.26 $240,479 40 50 80.00% $192,383 $48,096

Metal Canopy 1,875 $39.25 $73,589 40 50 80.00% $58,871 $14,718

Gravel Paved Parking 40,809 $0.71 $29,136 25 30 83.33% $24,280 $4,856

Parking Lot & Landscaped Areas

103,502 $5.71 $591,161 20 30 66.67% $394,108 $197,054

BUILDINGS TOTAL $3,201,282 $1,808,794 $1,392,488

Rounded to $1,392,000

Add Land Value $524,000

Total $1,916,000

COST APPROACH TO VALUE – AS-IS: $1,916,000

INCOME APPROACH TO VALUE

The Income Approach to value is that value which a typical purchaser would be willing to pay

for a property based upon its income producing capability.

In order to establish an economic rental rate for the subject property, the author of this report

researched and inserted the following rent survey, which contains income information from

leased historical comparables from competitive neighborhoods to the subject. This

summarized survey is as follows:

Retail Rent comparables

ADDRESS RENT RATE

RENT DATE

LEASED SF

TYPE OF BLDG.

LEASE COMMENTS

1530 & 1520 1540 & 1550

Schwab Street, Red Bluff

$0.46 to $0.73

2020 18,000 Retail and Industrial

Modified Gross

Unit 1-6,000sf, $4421/month, Unit 2-6,000sf, Vacant (at

owner’s choice-owner used it as a yard sale area), Long Term

leases, Tenant paid expenses; the other 12,000 SF building has

the following: Unit 1-6000sf, $2,800/month; Unit 2-6,000sf,

$3823/mo.

1065 S Main St, Red Bluff

$2.54 10/2020-10/2035

2,784 Retail NNN Retail Market Broker indicated this was high rent

434 Walnut Street, Red Bluff

$0.74 7/12/1905 860 Retail Modified Gross

Salon, month to month, modified gross basis, $639, 860sf LL paid taxes and insurance (salon has

since closed)

320-420 S Main St, Red Bluff

$0.75 12/2018- 3 year lease

531 Retail Modified Gross

General Merchandise Stores

620-680 Edith Ave, Corning (Olive Tree

Plaza)

$1.5 2/2019-present

1,200 Retail NNN Retail suite

965 W Highway 99 (Bldg 1),

Corning

$1.00 10/2019- 3 year lease (had been vacant 86 months)

2,000 Retail NNN Retail suite; had to drop the asking rent to $1.00 to attract a

tenant


Corning

$1.10 12/2018-1 year

1,000 Office/Retail NNN Commercial suite


Corning STE 115

$1.75 3/1/2020- 1year lease

3,000 Retail NNN Tenant Pays All


Corning STE 119

$1.50 10/2019- 3 year lease (had been vacant 86

months prior to lease

3,000 Retail NNN Tenant Pays All

The leased comparables indicated a range of $0.46 per square foot per month to $2.54 per

square foot per month, on a variety of NNN and Modified Gross basis. Noting that the range is

higher than what the subject is commanding, however, also observing the slowdown that is

starting to be observed in the retail sector, most likely due to the impact of COVID, the existing

and asking rates of the subject at $0.26 to $0.33 per square foot per month on modified net

basis mostly is deemed to be economic for the subject. Note that an adjustment of $4.00 per

Square Foot will have to be applied to this approach in in order to account for the TI’s

previously discussed. Note that this attractive offer would reduce the vacancy of the subject to

an estimated 2.00%, and even though the rent will be low the first year, such an endeavor

would, at the end, and after the first year, yield a positive cash flow. This is all based on the

information presented to the author.

The concluded existing and asking rates of the subject would indicate a potential gross income

for this property. Once the potential gross income is established, a rent loss and vacancy

factor is deducted. This loss is caused by tenant turnover or lack of payment by the tenants

and/or vacant units. Due to the location and the nature of the subject property, a vacancy and

rent loss factor of 2.00% was estimated and considered to be appropriate, also based on the

discount established for the largest suite, which at the offered TI’s rate, should have no

problem being absorbed quickly by the market. Deducting the rent loss and vacancy from the

property indicates an annual effective gross income for the subject property.

From the Effective Gross Income are then deducted the typical expenses that a landlord would

incur. Based on the rent comparables, properties like the subject property are typically rented

on a variety of leases; considering the existing and asking agreements of the subject, a

modified NNN type of lease is warranted. This indicates that the landlord will incur minimal

expenses such as taxes, exterior maintenance and management. Taxes will be estimated by

loading the tax rate into an appropriate capitalization rate.

Deducting these expenses from the Effective gross income indicates a residual commonly

called the Net Income. The Net Income is then capitalized at a Rate of Return acceptable to

the market.

Therefore, the last step needed in developing the Income Approach to value would be to

develop an appropriate capitalization rate for the subject property.

In determining an appropriate capitalization rate for the subject, it was noted that the market

sales analyzed in the Sales Comparison Approach provided a range of 3.95% to 9.05%.

Relying on this range, and mostly on the one indicated by Sale 10, a rate of 3.95% is

warranted for the subject property. The Income Approach to value for the subject property is

developed as follows:

Income Approach to Value

SF Monthly

Rate/$/SF Monthly

Rate

2020 Solano Street 12,840 $0.33 $4,237.20 $50,846

2026 Solano Street 11,875 $0.26 $3,100.00 $37,200

2046 Solano Street 1,875 $0.32 $600.00 $7,200

Potential Gross Income: $95,246

Less Rent Loss & Vacancy Factory 2.00% $1,905

Effective Gross Income: $93,341

Less Expenses

Taxes Estimated by loading tax rate into cap rate

Maintenance 3.00% $2,800

Management 8.00% $7,467

Total Expenses: $10,267

Net Operating Income: $83,074

Tax Rate 1.311200%

Capitalization Rate 3.95%

Loaded Rate 5.26%

Indicated value from the Income Approach $1,578,992

Less TI's $51,360

Totaled and Rounded To $1,528,000

RECONCILIATION OF VALUES

The values, as indicated by the three approaches to value, are as follows:

SALES COMPARISON APPROACH $1,462,000 COST APPROACH $1,916,000 INCOME APPROACH $1,528,000

The Sales Comparison Approach to Value is typically a good indicator of value when one has

numerous sales of similar types of properties. The author used the best comparable sales that

he could find in the surrounding area. Overall, this approach seems to reflect a direct range of

values for properties of the subject’s type, and therefore, considerable weight is placed upon it

in arriving at a fair market value for the subject property.

The Cost Approach to Value is typically a good indicator of value when one has a newer

building with accurate estimates of construction costs, land values, estimates of depreciation,

and a strong market. There also needs to be a purchaser willing to pay replacement costs less

depreciation for the improvements on the property. Considering the age and condition of the

subject property’s improvements, less weight is placed on this approach.

The Income Approach to Value is typically a good indicator of value on an income producing

property, which is bought on a rate of return a typical investor would be willing to accept. The

subject property’s income was estimated based on market and this approach appears to be

credible in the valuation of the subject property. Overall, some weight is placed upon this

approach to value.

After analyzing all three approaches to value, and placing weight on the Sales Comparison

Approach and the Income Approach, the author’s opinion of the Fair Market Value for the

subject property is concluded as follows:

FAIR MARKET VALUE…..…………………………$1,500,000

CERTIFICATION OF REPORT

The appraiser hereby certifies: The statements of fact contained in this report are true and correct. The reported analysis, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, unbiased professional analysis, opinions, and conclusions. I have no present or prospective interest in the property that is the subject of this report, and I have no personal interest or bias with respect to the parties involved. My compensation is not contingent on an action or event resulting from the analysis, opinions, conclusions in, or the use of this report. My compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event. That this appraisal assignment is not based on a requested minimum valuation, a specific valuation, or the approval of a loan. My analysis, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice, the requirements of the Code of Professional Ethics and Standards of Professional Practice of the Royal Institution of Chartered Surveyors and the American Society of Appraisers. The use of this report is subject to the requirements of the Royal Institution of Chartered Surveyors and the American Society of Appraisers of Real Estate Appraisers relating to review by its duly authorized representatives. I have made a personal inspection of the property that is the subject of this report. I 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.

http://www.rics.org/




Evans Appraisal Service, Inc. Michael H. Evans, FASA / FRICS Page 2 I do not authorize the out-of-context quoting from or partial reprinting of this appraisal report. Further, neither all nor any part of this appraisal report shall be disseminated to the general public by the use of media for public communication without the prior written consent of the appraiser signing this appraisal. Michael H. Evans has successfully completed the requirements set forth by the State of California for licensing and certification, and has been awarded the Certified General Real Estate Appraiser Certificate No. AG002019. That in his opinion, the Fair Market Value of the subject property, as of the valuation date of April 7, 2021, is as follows:

FAIR MARKET VALUE…..…………………………….$1,500,000

Respectfully submitted,

____________________________ Michael H. Evans, FASA, FRICS California State Certified General Real Estate Appraiser #AG002019 Recertified until October 28, 2022

SALES SUMMARY

Land Sales Chart

SALE# SALE DATE

ADDRESS SALE PRICE

ACRES $/ SF LAND ONLY

COMMENTS

1 12/20/2017 South Ave $700,000 8.75 $1.84 Inferior

2 1/30/2018 0 Hwy 99 W $60,000 1.69 $0.82 Inferior

3 11/5/2018 3129 S Highway 99W

$90,000 2.50 $0.83 Inferior

4 7/3/2019 SE Corner of Highway 99W and Fig Ln

$170,000 1.96 $1.99 Inferior

5 2/16/2021 1905 Solano St

$49,000 0.18 $6.25 Superior

Improved Sales Chart

SALE# ADDRESS SALE PRICE

SALE DATE ACRES BUILDINGSQFT (Total)

$/ SF LAND & BLDG

CAP RATE

COMMENTS

6 755 Walnut St $2,525,000 12/17/2018 0.96 9,026 $279.75 NA Superior

7 1530 & 1520 1540 & 1550 Schwab Street

$1,300,000 1/10/2020 1.97 24,000 $54.17 9.05% Inferior

8 1055 Main Street

$669,000 1/17/2020 0.40 10,660 $62.76 NA Superior

9 1355 Vista Way

$300,000 8/5/2020 1.00 8,900 $33.71 NA Inferior

10 22690 and 22686 Antelope Blvd

$1,381,000 1/14/2021 2.55 24,640 $56.05 3.92% Superior

LAND SALES MAP

COMMERCIAL SALES

LEGAL DESCRIPTION

REFERENCES 1) American Institute of Real Estate Appraisers, The Dictionary of Real Estate Appraisal,

3rd Edition, (Chicago 1993) page 140 and 171. 2) 1987 National Survey of Buying Power of Metropolitan Areas, Sales and Marketing

Magazine, pages B-29. 3) The Appraisal of Real Estate, 12th Edition, page 336 4) Uniform Standards of Professional Appraisal Practice (USPAP), 2020-2021 Edition

REFERENCES/PHOTOS: 5) YCPD.ORG

6) CITY-DATA.COM

7) GREATSCHOOLS.NET

8) SYIX.COM

9) DOF.CA.GOV

10) WEBSHOTS.COM

11) REFERENCES/PHOTOS:

12) CALMIS.CA.GOV

13) DOF.CA.GOV

14) ADUNNPHOTOGRAPHY.OM

15) BOE.CA.GOV

16) GREATSCHOOLS.NET

17) CITY-DATA.COM

18) WEBSHOTS.COM

appraisal report the subject property located: 2020, …

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