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0.54 ACRES OF VACANT LAND LOCATED AT THE NORTHEAST CORNER OF SABIN BROWN ROAD AND INDUSTRIAL DRIVE WICKENBURG, ARIZONA 85390 CBRE GROUP, INC FILE NO. CB24US104188-1 BENNER NAWMAN, INC. APPRAISAL REPORT CBRE VALUATION & ADVISORY SERVICES VALUATION & ADVISORY SERVICES 2575 East Camelback Road, Suite 500 Phoenix, Arizona 85016 (602) 735-5000 www.cbre.com Date of Report: November 27, 2024 Brian Young Director of Operations & Product Development Benner-Nawman, Inc. (BN Products USA) 3450 North Sabin Brown Road Wickenburg, Arizona 85390 RE: An appraisal of 0.54 acres of vacant land located at the northeast corner of Industrial Drive and Sabin Brown Road, in Wickenburg, Arizona Dear Mr. Young: At your request and authorization, CBRE, Inc. has prepared an appraisal of the market value of the referenced property. Our analysis is presented in the following Appraisal Report. The subject property involves 0.54 net acres of vacant land located at the northeast corner of Sabin Brown Road and Industrial Drive, in Wickenburg, Arizona. The subject site is a parcel of undeveloped land owned by the town of Wickenburg, but situated adjacent to an improved industrial property owned by Benner-Nawman, Inc. The subject is zoned IND-2, Light Industrial, by the town of Wickenburg, and the General Plan indicates the site is designated for employment/industrial use. There is a municipal well located in the middle portion in the site which is not included in the land area and there is an access easement associated with the well site. As a result, potential uses of the site are limited to open storage and parking for the adjacent property owner. The appraised property is more fully described, legally and physically, within the enclosed report. The purpose of this appraisal is to develop an opinion of the “as is” market value of the fee simple interest in the subject site. The appraised property was inspected on November 16, 2024, which represents the effective date of the “as is” market value. The intended use of this appraisal is to assist the client in internal decision-making. The intended user is Benner-Nawman, Inc. (BN Products USA). Based on the analysis contained in the following report, the “as is” market value and fair market rent for the subject is concluded as follows: SUMMARY OF VALUE CONCLUSION Appraisal Premise Interest Appraised Date of Value Value Conclusion "As Is" Market Value Fee Simple Estate November 20, 2024 $19,400 Compiled by CBRE Mr. Brian Young November 27, 2024 Page 2 The report, in its entirety, including all assumptions and limiting conditions, is an integral part of, and inseparable from, this letter. The following appraisal sets forth the most pertinent data gathered, the techniques employed, and the reasoning leading to the opinion of value. The analyses, opinions and conclusions were developed based on, and this report has been prepared in conformance with, the guidelines and recommendations set forth in the Uniform Standards of Professional Appraisal Practice (USPAP), and the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. The intended use and user of our report are specifically identified in our report as agreed upon in our contract for services and/or reliance language found in the report. As a condition to being granted the status of an intended user, any intended user who has not entered into a written agreement with CBRE in connection with its use of our report agrees to be bound by the terms and conditions of the agreement between CBRE and the client who ordered the report. No other use or user of the report is permitted by any other party for any other purpose. Dissemination of this report by any party to any non-intended users does not extend reliance to any such party, and CBRE will not be responsible for any unauthorized use of or reliance upon the report, its conclusions or contents (or any portion thereof). It has been a pleasure to assist you in this assignment. If you have any questions concerning the analysis, or if CBRE can be of further service, please contact us. Respectfully submitted, CBRE - VALUATION & ADVISORY SERVICES Thomas Raynak, MAI Jo Dance, MAI, CCIM First Vice President Managing Director Appraiser Certified General Appraiser Certified General Real Estate Appraiser No. 30413 Real Estate Appraiser No. 30249 Certification i NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Certification We certify to the best of our knowledge and belief: 1. The statements of fact contained in this report are true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are our personal, impartial and unbiased professional analyses, opinions, and conclusions. 3. We have no present or prospective interest in or bias with respect to the property that is the subject of this report and have no personal interest in or bias with respect to the parties involved with this assignment. 4. Our engagement in this assignment was not contingent upon developing or reporting predetermined results. 5. Our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. 6. This appraisal assignment was not based upon a requested minimum valuation, a specific valuation, or the approval of a loan. 7. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. 8. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. 9. As of the date of this report, Thomas Raynak, MAI and Jo Dance, MAI, CCIM have completed the continuing education program for Designated Members of the Appraisal Institute. 10. Thomas Raynak, MAI has and Jo Dance, MAI, CCIM has not made a personal inspection of the property that is the subject of this report. 11. No one provided assistance to the persons signing this report. 12. Valuation & Advisory Services operates as an independent economic entity within CBRE, Inc. Although employees of other CBRE, Inc. divisions may be contacted as a part of our routine market research investigations, absolute client confidentiality and privacy were maintained at all times with regard to this assignment without conflict of interest. 13. Thomas Raynak, MAI and Jo Dance, MAI, CCIM have not provided services as appraisers regarding the subject property within the three-year period. 14. Thomas Raynak, MAI and Jo Dance, MAI, CCIM have the appropriate knowledge, education and experience to complete this assignment in a competent manner and have appraised properties of similar type. The reader is referred to the appraisers’ Qualifications in the Addenda. Thomas Raynak, MAI Jo Dance, MAI, CCIM First Vice President Managing Director Arizona Certified General Real Estate Appraiser No. 30413 Arizona Certified General Real Estate Appraiser No. 30249 Subject Photographs ii NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Subject Photographs Subject Subject Photographs iii NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Subject Subject Photographs iv NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Subject Subject Photographs v NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona View of Subject Site Facing East/Southeast View of Subject Site Facing South/Southeast Subject Photographs vi NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona View Of Subject Site Facing Southeast View Of Driveway Into Larger Parcel Facing North, Subject Site At Right Subject Photographs vii NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Southwest Along Sabin Brown Drive, Subject Site At Right Southeast Along Industrial Drive, Subject Site At Left Executive Summary viii NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Executive Summary Property Description Assessor Parcel Number Client Highest and Best Use Property Rights Appraised Date of Report Date of Inspection Date of "As Is" Market Value Estimated Exposure Time Estimated Marketing Time Buyer Profile CONCLUDED MARKET VALUE Appraisal Premise Interest Appraised Value "As Is" Market Value Fee Simple Estate $19,400 Compiled by CBRE The subject property involves 0.54 net acres of vacant land located at the northeast corner of Sabin Brown Road and Industrial Drive, in Wickenburg, Arizona. The subject site is a parcel of undeveloped land owned by the town of Wickenburg, but situated adjacent to an improved industrial property owned by Benner-Nawman, Inc. The subject is zoned IND-2, Light Industrial, by the town of Wickenburg, and the General Plan indicates the site is designated for employment/industrial use. There is a municipal well located in the middle portion in the site which is not included in the land area and there is an access easement associated with the well site. As a result, potential uses of the site are limited to open storage and parking for the adjacent property owner. November 20, 2024 Benner-Nawman, Inc. (BN Products USA) November 27, 2024 Portion of 505-41-008R Fee Simple Estate Assemblage with the adjacent property to the east with potential uses primarily limited to outdoor storage and parking November 20, 2024 November 20, 2024 Adjacent property owner One year, or less One year, or less Date of Value STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS (SWOT) Strengths/Opportunities • The subject site benefits from being located within the Wickenburg Industrial Park, near the Wickenburg Municipal Airport. • The subject site is located one block from Wickenburg Way (US 60). • The average vacancy rate within the Wickenburg industrial market has remained below 3% since 2016. Weaknesses/Threats • The subject site is located within the town of Wickenburg, in the far northwest portion of the Phoenix MSA where there is limited demand for industrial use. • The subject site is too small to be separately developed. • There is a municipal well located in the middle portion of the subject site and there is an access easement associated with the well site. As a result, potential uses of the site are limited to open storage and parking for the adjacent property owner. Executive Summary ix NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona EXTRAORDINARY ASSUMPTIONS An extraordinary assumption is defined as “an assignment-specific assumption as of the effective date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser’s opinions or conclusions.” 1 • None noted. HYPOTHETICAL CONDITIONS A hypothetical condition is defined as “a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results but is used for the purposes of analysis.” 2 • None noted 1 The Appraisal Foundation, USPAP, 2024 ed, 3 (Effective January 1, 2024) 2 The Appraisal Foundation, USPAP, 2024 ed, 3 ( (Effective January 1, 2024) Table of Contents x NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Table of Contents Certification ....................................................................................................................... i Subject Photographs ...........................................................................................................ii Executive Summary ......................................................................................................... viii Table of Contents ............................................................................................................... x Introduction ...................................................................................................................... 1 Area Analysis .................................................................................................................. 12 Neighborhood Analysis ................................................................................................... 28 Site Analysis .................................................................................................................... 36 Zoning ............................................................................................................................ 41 Market Analysis ............................................................................................................... 43 Sales Comparison Approach ............................................................................................ 48 Assumptions and Limiting Conditions ............................................................................... 54 ADDENDA A – COMPARABLE LAND SALES B – ENGAGEMENT LETTER C – QUALIFICATIONS Introduction 1 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Introduction PROPERTY IDENTIFICATION The subject property involves 0.54 net acres of vacant land located at the northeast corner of Sabin Brown Road and Industrial Drive, in Wickenburg, Arizona. The subject site is a parcel of undeveloped land owned by the town of Wickenburg, but situated adjacent to an improved industrial property owned by Benner-Nawman, Inc. The subject is zoned IND-2, Light Industrial, by the town of Wickenburg, and the General Plan indicates the site is designated for employment/industrial use. There is a municipal well located in the middle portion in the site which is not included in the land area and there is an access easement associated with the well site. As a result, potential uses of the site are limited to open storage and parking for the adjacent property owner. The legal description for the subject property, along with a survey of the site, is presented on the following three pages. The legal description and a survey of the well site are presented on the fourth and fifth following pages. The appraised property may also be identified as a portion of Maricopa County Assessor’s parcel number 505-41-008R. The Assessor’s plat map, showing the location and configuration of the subject site (highlighted in yellow), is presented on the sixth following page. OWNERSHIP AND PROPERTY HISTORY According to public records, the subject property is owned by the town of Wickenburg. There has been no known sales activity pertaining to the appraised property during the past three years. Additionally, the subject is not being actively marketed for sale, nor is the property known to be encumbered by any purchase agreements. As noted, there is a municipal well situated in the middle portion of the subject site which is not included in the land area. Given the subject’s relatively small size, and given there is municipal well situated within the property, potential uses of the site are limited to outdoor storage or parking for the adjacent property owner. These factors, plus a size which is too small to separately develop significantly reduces the site’s marketability, appeal and value. PURPOSE OF THE APPRAISAL The purpose of this appraisal is to develop an opinion of the “as is” market value of the fee simple interest in the subject site. INTENDED USE OF REPORT The intended use of this appraisal is to assist the client in internal decision-making. CLIENT The client is Benner-Nawman, Inc. (BN Products USA). Introduction 2 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Introduction 3 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Introduction 4 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Introduction 5 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Introduction 6 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Introduction 7 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Subject Introduction 8 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona INTENDED USER OF REPORT The intended user is Benner-Nawman, Inc. (BN Products USA). Intended users are those who an appraiser intends will use the appraisal or review report. In other words, appraisers acknowledge at the outset of the assignment that they are developing their expert opinions for the use of the intended users they identify. Although the client provides information about the parties who may be intended users, ultimately it is the appraiser who decides who they are. This is an important point to be clear about: The client does not tell the appraiser who the intended users will be. Rather, the client tells the appraiser who the client needs the report to be speaking to, and given that information, the appraiser identifies the intended user or users. It is important to identify intended users because an appraiser’s primary responsibility regarding the use of the report’s opinions and conclusions is to those users. Intended users are those parties to whom an appraiser is responsible for communicating the findings in a clear and understandable manner. They are the audience. 3 DEFINITION OF VALUE The current economic definition of market value agreed upon by agencies that regulate federal financial institutions in the U.S. (and used herein) is as follows: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 1. buyer and seller are typically motivated; 2. both parties are well informed or well advised, and acting in what they consider their own best interests; 3. a reasonable time is allowed for exposure in the open market; 4. payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and 5. the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. 4 DEFINITION OF MARKET VALUE “AS IS” Market Value "As Is" is defined in Appraisal Policies and Practices of Insured Institutions and Service Corporations, Federal Home Loan Bank Board "Final Rule", 12 CFR, Parts 563 and 571, December 21, 1987 as follows: 3 Appraisal Institute, The Appraisal of Real Estate, 15th ed. (Chicago: Appraisal Institute, 2020), 40. 4 Interagency Appraisal and Evaluation Guidelines; December 10, 2010, Federal Register, Volume 75 Number 237, Page 77472. Introduction 9 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Market Value “As Is " on appraisal date means an estimate of the market value of a property in the condition observed upon inspection and as it physically and legally exists without hypothetical conditions, assumptions, or qualifications as of the date of inspection. INTEREST APPRAISED The value estimated represents Fee Simple Estate as defined below: Fee Simple Estate - Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power and escheat. 5 SCOPE OF WORK This Appraisal Report is intended to comply with the reporting requirements set forth under Standards Rule 2 of USPAP. The scope of the assignment relates to the extent and manner in which research is conducted, data is gathered, and analysis is applied. Extent to Which the Property is Identified The property is identified through the following sources: • Legal descriptions and surveys • Public records • Assessor’s plat map Extent to Which the Property is Inspected Thomas Raynak, MAI inspected the subject site, as well as its surrounding environs on the effective date of appraisal. This inspection was considered adequate and is the basis for our findings. Type and Extent of the Data Researched CBRE reviewed the following: • zoning requirements • flood zone status • demographics • industrial market data • comparable land sales data Type and Extent of Analysis Applied CBRE, Inc. analyzed the data gathered through the use of appropriate and accepted appraisal methodology to arrive at a probable value indication via each applicable approach to value. 5 Appraisal Institute, The Dictionary of Real Estate Appraisal, 7th ed. (Chicago: Appraisal Institute, 2022), 73. Introduction 10 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Statement of Competency Thomas Raynak, MAI and Jo Dance, MAI, CCIM have the appropriate knowledge, education and experience to complete this assignment competently. Data Resources Utilized in the Analysis DATA SOURCES Item: Source(s): Site Data Size Legal descriptions and surveys Economic Data ESRI; US Bureau of Labor Statistics; ADOT; CBRE Research; CBRE Econometrics Advisors Comparable Land Sales Data CoStar, Inc.; Vizzda; public records; and market participants Compiled by CBRE APPRAISAL METHODOLOGY In appraisal practice, an approach to value is included or omitted based on its applicability to the property type being valued and the quality and quantity of information available. Cost Approach The Cost Approach is based on the proposition that the informed purchaser would pay no more for the subject than the cost to produce a substitute property with equivalent utility. This approach is particularly applicable when the property being appraised involves relatively new improvements that represent the highest and best use of the land, or when it is improved with relatively unique or specialized improvements for which there exist few sales or leases of comparable properties. Sales Comparison Approach The Sales Comparison Approach utilizes sales of comparable properties, adjusted for differences, to indicate a value for the subject. Valuation is typically accomplished using physical units of comparison such as price per square foot, price per unit, price per floor, etc., or economic units of comparison such as gross rent multiplier. Adjustments are applied to the physical units of comparison derived from the comparable sale. The unit of comparison chosen for the subject is then used to yield a total value. Economic units of comparison are not adjusted, but rather analyzed as to relevant differences, with the final estimate derived based on the general comparisons. Income Approach The Income Approach reflects the subject’s income-producing capabilities. This approach is based on the assumption that value is created by the expectation of benefits to be derived in the future. Specifically estimated is the amount an investor would be willing to pay to receive an income stream plus reversion value from a property over a period of time. The two common Introduction 11 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona valuation techniques associated with the Income Approach are direct capitalization and the discounted cash flow (DCF) analysis. Methodology Applicable to the Subject In the valuation of the subject site, only the Sales Comparison Approach to value is employed as the property involves vacant land best suited for outside storage or parking. EXPOSURE TIME AND MARKETING TIME Current appraisal guidelines require an estimate of a reasonable time period in which the subject could be brought to market and sold. This reasonable time frame can either be examined historically or prospectively. In a historical analysis, this is referred to as exposure time. Exposure time always precedes the date of value with the underlying premise being the time a property would have been on the market prior to the date of value, such that it would sell at its appraised value as of the date of value. On a prospective basis, the term marketing time is most often used. The exposure time and marketing time are a function of price, time, and use. It is not an isolated estimate of time alone. In consideration of the factors noted above, we have analyzed the following in determining an exposure time and marketing time for the subject site: • exposure times for comparable land sales employed within this appraisal; • current and anticipated supply and demand; and • the opinions of market participants Based on exposure times of pertinent residential land sales data from throughout metropolitan Phoenix, continued demand for industrial land, and discussions with brokers active in the metropolitan Phoenix industrial market, the value opinion pertaining to the subject site is predicated upon an exposure time of one year, or less, assuming the site is adequately marketed at a price commensurate with the value conclusion. A marketing time of one year, or less, is also anticipated for the subject site based on the foreseeable market conditions projected to exist over the next approximate one-year period. Area Analysis 12 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Area Analysis Population Source: ESRI, downloaded on Nov, 3 2024 The subject is located in the Phoenix-Mesa-Chandler, AZ Metropolitan Statistical Area. Key information about the area is provided in the following tables. The area has a population of 5,149,752 and a median age of 38, with the largest population group in the 20-29 age range and the smallest population in 80+ age range. Population has increased by 956,865 since 2010, reflecting an annual increase of 1.5%. Population is projected to increase by 249,887 between 2024 and 2029, reflecting a 1.0% annual population growth. 4,192,887 5,149,752 5,399,639 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 2010 2024 2029 POPULATION BY YEAR 0 200,000 400,000 600,000 800,000 0-9 10-19 20-29 30-39 40-49 50-59 60-69 70-79 80+ AREA POPULATION BY AGE Source: ESRI Source: ESRI Area Analysis 13 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Robust population growth across the Phoenix MSA is supported by strong net migration. The metro’s population has grown from 375,000 people in 1950 to more than 5.0 million residents today. Greater Phoenix added an estimated 106,000 residents in 2020 while Maricopa County— where Phoenix is located—was in the top five fastest growing counties in the U.S. over the last decade. While many know Phoenix as a retirement destination, the metro boasts a relatively young population with a median age of 36.4 years—younger than the national median age of 38.8 (see table below). This young and growing skilled labor pool offers long-term stability to metro employers. The following graphs show median income for metropolitan Phoenix and a general breakdown of education. Income Education The area features an average household income of $118,826 and a median household income of $87,166. Over the next five years, median household income is expected to increase by 17.9%, or $3,127 per annum. A total of 36.3% of individuals over the age of 24 have a college degree, with 23.3% holding a bachelor's degree and 13.0% holding a graduate degree. $87,166 $102,799 $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 2024 2029 MEDIAN INCOME BY YEAR POPULATION BY DEGREE Bachelor's Degree Graduate Degree Other Source: ESRI Source: ESRI As indicated above, the Phoenix MSA has a median and average household income of $87,166 and $118,826, respectively. Approximately 36% of the population age 24 or older has a college or graduate degree. Area Analysis 14 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona The Phoenix Value Proposition • The metro Phoenix value proposition continues to attract residents and employers to the region. • Phoenix is one of the fastest growing metros in the nation. Its growth is fueled by net migration which supports the deep and growing talent pool. • Growth across a number of industries (most notability in education, leisure and hospitality and financial services) has decreased the metro's reliance on construction and real estate. Diversification insulates the metro area from future economic shocks that impact specific sectors. • The metro boasts a relatively affordable cost of living which offers residents a higher quality of life. • A relatively low regulatory and tax environment makes the State business friendly. • Since the recession, new supply has remained in balance with demand, supporting market fundamentals. Business Activity With a competitive advantage in regard to cost, talent and quality of life, Phoenix is uniquely attractive to businesses. These factors, in addition to the metro’s business-friendly regulatory environment and proximity to major markets, continue to help fuel growth. In recent years, a significant number of financial, technology and manufacturing companies have located and expanded operations in greater Phoenix. The metro’s growing prominence as a financial hub is fueled by companies such as USAA, State Farm, Charles Schwab, Freedom Financial, PayPal, Voya Financial, Vanguard, and Northern Trust, all of which have expanded operations within the last few years. As a result, hiring rates for finance and insurance jobs in Phoenix have been among the highest in the country. The financial activities sector accounts for 7.8% of total non-farm employment in Phoenix and is a growing sector that supports more than 171,000 jobs. Still, industries such as wholesale and retail trade, professional and business services, and healthcare and social services make up the largest share of the metro’s labor economy. In recent years, metropolitan Phoenix has gained recognition for its entrepreneurial community. The Phoenix MSA had a startup formation rate of 9.6% between 2014 and 2018, placing it seventh in the nation for startup activity. Greater Phoenix is also one of the most rapidly expanding high-tech job markets in the nation. In fact, the Phoenix MSA was in the top 20 for high tech employment growth in CBRE’s 2021 Scoring Tech Talent report. With more than 98,220 high-tech employees, metro employment has grown 14.2% over a five-year period. Another prominent industry sector in metro Phoenix that continues to expand is advanced manufacturing, driven largely by aerospace, semiconductors, and electric and autonomous vehicles. Industry leaders like Intel, Microchip and Benchmark Electronics have a strong presence in metropolitan Phoenix. In 2020, Lucid Motors completed construction on the initial phase of their electric car manufacturing plant in Casa Grande which is expected to generate 6,000 direct and indirect jobs over the next decade. In 2022, Pinal County purchased an additional 1,400 Area Analysis 15 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona acres around Lucid's existing plant in Casa Grande for the expansion of a full original equipment manufacturer campus, which could total 5 million square feet at full build-out and include suppliers. Meanwhile, Nikola purchased about 1,000 acres in southern Buckeye recently for a proposed hydrogen production hub to support the deployment of Nikola's Tre FCEV trucks and hydrogen infrastructure. In 2021, Taiwan Semiconductor, the world’s largest maker of leading-edge silicon wafers, began construction of a $12 billion foundry in north Phoenix. In late-2022, the Taiwan-based chip giant confirmed its plans to invest $40 billion with two factories in Arizona with the north Phoenix facility scheduled to be operational by 2024, with the second facility being operational by 2026. TSMC is working with about 40 suppliers that are moving or expanding to Arizona, while it will eventually employ 4,500. Intel recently completed a $20 billion expansion to their Ocotillo campus in south Chandler. This project will add nearly 3,000 jobs over the next few years. The outlook for this sector is bright and is a top priority for state and community leaders. The Phoenix metro has ranked as one of the top growth markets for data centers across the U.S. and is expected to continue growing in 2023. In the past few years, both cloud providers and colocation providers, which lease out space, have made big plans to build up megawatt capacity across the Valley. Other newer projects include Facebook's $800 million data center in Mesa, Stack Infrastructure's new 234-megawatt campus in Phoenix and a planned data center campus across a 400-acre site in Glendale by QTS Realty Trust. Nestle announced in 2022 that it will develop a new coffee creamer manufacturing plant in the West Valley and invest $675 million with 350 new jobs. VAI Resort and Mattel Adventure Park is a $1 billion dollar resort under construction in west Glendale, just to the south of the Glendale Entertainment District and State Farm Stadium. At full build-out, the 60-acre resort will comprise three separate hotels, including a 5-star luxury hotel with 700 rooms, a family and group hotel with 311 rooms, and a hotel with 342 rooms. Additionally, the project will include: a conference, ballroom, meeting and wedding venue; an indoor theme park with roller coasters and attractions; a sprawling water feature; and 12 upscale restaurants, 10 exclusive bars and lounges and 100,000 square-feet of retail. Most of the 50-year-old, Metrocenter regional mall in Phoenix was purchased by a group of investors for redevelopment into a new mixed-use project with housing and retail which could support the growing semiconductor industry in the area. The top key industries in the Phoenix MSA are summarized below. Area Analysis 16 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Metropolitan Phoenix is the economic engine of the state, accounting for two-thirds of Arizona residents and nearly three-fourths of the state’s labor economy. The employment outlook for the metro is positive. Notable growth is occurring in the professional and business services, financial activities and health care employment sectors. Rising employment in these higher-paying industries, combined with an extremely tight post-pandemic labor market, is driving substantial wage increases. The table below shows employment growth by industry over the past year (through September 2024). The following table summarizes the top 10 private employers in the Phoenix MSA. Area Analysis 17 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Median earnings for the top 10 occupational categories is displayed below. The most recent employment picture for selected locations in Arizona, including metropolitan Phoenix, in comparison to the national averages is displayed in the bar graph below. Area Analysis 18 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona As indicated above, the unemployment rate decreased in metropolitan Phoenix and other locations in Arizona from September 2023 to September 2024. By contrast, the national unemployment rate increased from September 2023 to September 2024. The following line graph shows changes in employment for metropolitan Phoenix compared to the national average over the past three years. As indicated above, the Phoenix MSA has consistently outperformed the nation in employment growth over the past three years. Area Analysis 19 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Housing (Single and Multi-Family) A summary of the residential permit activity (both single-family and multi-family residential) in metropolitan Phoenix dating back to 2004, as reported by Zonda is summarized in the following graphs. As indicated above, permit activity for both single-family and multi-family generally trended higher between 2012 and 2021; however, the combination of elevated home prices, higher mortgage interest rates and economic uncertainty resulted in reduced demand during 2022 and 2023, before a rebound in 2024. Zonda reveals single-family permit activity decreased by 21.8% in 2022 and by 8.0% in 2023; however, single-family permit activity is projected to increase by 15.8% in 2024, 10.8% in 2025 and by 11.7% in 2026. The market is anticipated to remain underbuilt, but home prices are projected to remain overvalued through 2026. The following graph tracts the 30 and 15-year fixed mortgage interest rates for the past year (through late-November 2024), per Freddie Mac. Area Analysis 20 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona As indicated above, mortgage interest rates generally trended lower between 2023 and September 2024 before trending higher over the past month or so. The 30-year mortgage averages near 6.81% as of late-November 2024, while the 15-year mortgage averages near 6.1%. Both the 30 and 15-year mortgage interest rates are toward the low end of the 52-week ranges and near the lowest levels in about 1.5 years. Despite the recent uptick in rates, the longer term trend is anticipated to be modestly lower. The following graph shows new and existing, detached median homes prices over the past two years through August 2024, per Zonda. Area Analysis 21 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona As indicated above, new detached home prices trended slightly lower from late-2022 until about September 2023, and then generally stabilizing over the past 12 to 15 months. The median resale price for detached homes corrected downward through the second half of 2022, but trended modestly higher in 2023 before stabilizing in recent months. The median existing home price decreased by 3.1% in 2023, but is projected to trend higher by 4.7% in 2024, 5.1% in 2025 and by 2.5% in 2026. The multi-family sector bottomed in about 2009-2010 and demonstrated significant improvement most of 2022, with occupancy rates having stabilized near 93%+ on a metro-wide basis, steadily increasing effective rental rates and a steady flow of new construction activity. As a result, per unit and per square foot prices for multi-family properties increased significantly in recent years up through mid to late-2022. Due to increased borrowing costs and economic uncertainty, overall capitalization rates for improved apartment properties have increased resulting in a price correction in many cases that continued throughout 2023, although prices have stabilized somewhat during 2024. Real Page forecasts a substantial increase in new multi- family inventory for the next few years (2024-2026) before tapering off in 2027 and 2028, while occupancy rates are projected to maintain a stabilized rate during 2024 and then steadily increase through 2028, as supply and demand are projected to be in near equilibrium. Effective rental rates are projected to remain relatively stable in 2024 before modestly increasing through 2028. Office/Retail/Industrial Office After six straight quarters of negative absorption largely attributed to the COVID-19 pandemic, the metro Phoenix office market experienced positive net absorption during Q4 2021, which was followed by negative net absorption in each quarter of 2022, again due to higher borrowing costs and economic uncertainty. The average vacancy as of Q2 2024 was 23.5%, which is higher than the 10-year average of 18.9%. Despite seeing a rise in vacancy, the rate remains below the post-pandemic high of 24.9%. Year-over-year, the average rental rate increased nominally. The 3-year average growth rate for metro Phoenix was 2.4% as of Q2 2024. There was 992,742 square feet of new office space delivered in 2022 and another 402,054 square feet of space added in 2023. There was a total of 287,054 square feet under construction as of Q2 2024, 88.6% of which has been pre-leased by single tenants. Retail The retail sector has experienced a modestly downward trend in the average vacancy rate on a metro-wide basis in recent years, as net absorption was positive each year between 2012 and 2019. Net absorption was impacted in 2020 due to the COVID-19 pandemic, but rebounded in 2021 and 2022. The Phoenix retail sector has experienced positive net absorption of 317,677 square feet during the first three quarters of 2024. As of Q3 2024, the average vacancy rate was Area Analysis 22 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona 5.5%. These tight market conditions have fueled rent growth in the market area. The average asking rent reached $17.78 per square foot in Q3 2024, marking a 1.8% quarter over quarter increase, a 5.6% year-over-year gain. As of Q3 2024, there was 1,19,930 square feet of retail space under construction. Industrial In Q2 2024, the vacancy rate increased 120 bps quarter over quarter to 10.1%. The moderate increase in vacancy can be partially attributed by the 9.1 million square feet of delivered space outpacing 3.3 million square feet of net absorption. Leasing activity remains strong although the development pipeline remains significant with over 25.2 million square feet under construction. Users and developers from across the country continue to migrate to Phoenix due to strong market fundamentals, a robust workforce, and affordable industrial land and product. Rental rates trended higher in 2021, 2022 and 2023. The market direct average asking NNN lease rate remained unchanged from the prior quarter, which ended at $1.08 per square foot in Q2 2024. According to CBRE Econometric Advisors, rent growth is projected to be 3.6% in 2024, 4.9% in 2025, 4.1% in 2026, 3.8% in 2027 and 2028 and 3.5% in 2029. Education The Phoenix metropolitan area is home to nationally ranked schools and world-renowned universities that prepare the area’s workforce to meet current and future employer needs. An abundance of higher education programs and the talent graduating from them help to maintain the metro’s attractiveness to businesses. The higher education system is led by Arizona State University which is highlighted below. Area Analysis 23 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Transportation The region has a growing transportation network as summarized below. The Phoenix metro’s modern infrastructure enables an efficient flow of goods and services for local businesses and provides easy access for its residents. Sound regional transportation strategy ensures the Valley can accommodate future growth and meet the evolving needs of the population. The region’s automotive infrastructure is based on a looped highway system, providing drivers the ability to navigate the metro with numerous access points to outside markets via Interstates 10, 8 and 40. For travel within the metro, Loops 101, 202 and 303 are the main Area Analysis 24 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona freeways. Recent and ongoing infrastructure developments include: the recently opened South Mountain Freeway, which provides a 22-mile extension of Loop 202, connecting the East and West valleys; an extension to State Route 24, to be completed in late 2022, will provide greater access to growing communities in east Mesa; major renovation to Interstate 10 will greatly improve traffic flow through downtown after its completion in 2024; and the Interstate 17 improvement project, slated to begin in late 2022, will alleviate congestion on a crucial stretch of freeway that connects Phoenix to central and northern Arizona. The most recent Regional Transportation Plan Freeway Program Map is presented below: Source: Arizona Department of Transportation Greater Phoenix is served by Valley Metro for regional public transportation, including 103 bus routes, light rail and a variety of shared commuter services. There is approximately 30 miles of light rail line in Phoenix that runs from north Phoenix through downtown Phoenix, and east to Tempe and Mesa. Extensions are in development to more than double the system’s size to 66 miles throughout the region by 2034. All Valley Metro buses, and light rail train cars are equipped with bike racks. This multi-modal capacity helps connect bike commuters who use the Valley’s surface streets and extensive bikeways for daily transport. Additionally, bike share programs have been adopted in Phoenix, Mesa, Scottsdale and Tempe, offering more than 1,000 bikes for riders. The most recent Regional Transportation Plan Freeway Program Map is presented below: Area Analysis 25 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Source: ValleyMetro.org Airports Two major airports serve the greater Phoenix region: Phoenix Sky Harbor International Airport and Phoenix-Mesa Gateway Airport. Phoenix Sky Harbor Airport handles over 46 million passengers annually, providing domestic and international flights throughout Canada, Mexico, the United Kingdom and Germany. The airport serves over 120,000 passengers per day and generates a $106 million daily economic impact. Phoenix-Mesa Gateway Airport is a decommissioned air force base that today serves as a gateway to Phoenix. The airport serves more than 45 cities with non-stop service via Allegiant for domestic flights and Swoop and West Jet for flights to Canada, contributing over $1 billion annually to the Arizona economy.8 Phoenix- Mesa Gateway is developing as an international aerospace center and is a designated Foreign Trade Zone. Rail The Phoenix metro is served by two Class I railroads—BNSF and Union Pacific—that maintain more than 1,700 miles of rail throughout the state. The freight rail system transports cargo to ports in Southern California, across the nation and to Mexico via the Nogales crossing. Area Analysis 26 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Quality of Life The aptly named Valley of the Sun is known throughout the world for its climate, which averages 300 days of sunshine per year with an annual average temperature of 75 degrees. Valley residents embrace an active, outdoor-oriented lifestyle amid sweeping desert landscapes. metropolitan Phoenix boasts world-class resorts and professionally designed golf courses as well as a vibrant array of entertainment and nightlife options. Tourism remains an important economic driver in the metro. In 2019, travel to the Valley generated a record $16.7 billion in direct spending and supported 115,7000 jobs. With more than 300 golf courses in the region, the Valley is a top destination for golfers. Each year, Phoenix hosts the PGA, LPGA and Senior PGA tours, including the world-famous WM Phoenix Open. The Phoenix Open consistently sets PGA records for the most fans in attendance boasting nearly 700,000 spectators at the “Greatest Show on Grass”. There are more than 120 parks within the Valley, including South Mountain Park and Preserve—the largest municipal park in the United States. Breathtaking mountains and vibrant scenery provide an ideal backdrop for hundreds of trails spanning from wheelchair accessible pathways to expert hiking and mountain biking trails. The metro’s top destinations include Camelback Mountain, which attracts 750,000 people per year and Piestewa Peak with more than 350,000 visitors annually. Sports The major local sports teams include: the NFL’s Arizona Cardinals, MLB’s Arizona Diamondbacks, and NBA’s Phoenix Suns. In addition, Phoenix is home to the WNBA’s Mercury and USL’s Phoenix Rising Football Club founded in 2014. Major League Baseball has made a substantial investment in metropolitan Phoenix. Fifteen major league teams host spring training across the Valley— the greatest concentration of professional baseball facilities found anywhere in the U.S. Annually, the Cactus League contributes an estimated $644 million in economic impact in Arizona where the median spring training visitor group spends four days and $405 per day in the state. Arts & Culture Metropolitan Phoenix boasts 20 museums, including the Phoenix Art Museum, Musical Instrument Museum and the world-famous Heard Museum. The city is also home to the Phoenix Symphony, Arizona Opera Company, Ballet Arizona and a host of professional theatre companies. There are several live concert and entertainment venues throughout the metro. One of the most popular music venues is Ak-Chin Pavilion that hosts live bands and concerts and seats 20,000 spectators. Additionally, large venues like State Farm Stadium, Gila River Arena, Comerica Theater, Orpheum Theater, Footprint Arena and ASU Gammage Auditorium host numerous comedy tours, musicals, concerts and performances throughout the year. Area Analysis 27 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Conclusion Economic conditions in the Phoenix MSA are expected to remain favorable over the next several years as incomes increase, employment increases, and the population continues to expand. Over the past five years, total employment in the Phoenix MSA has grown at a significantly higher rate than the national average. Market conditions within the single and multifamily housing sectors as well as the industrial sector remain generally favorable, despite some recent softening in the market, while the retail and hospitality sectors continue to recover from the COVID-19 pandemic. The office market represents the sector which has been most impacted by the lingering effects of the COVID-19 pandemic, and the subsequent economic uncertainty. Neighborhood Analysis 28 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Neighborhood Analysis LOCATION The subject property is located at the northeast corner of Sabin Brown Road and Industrial Drive, in the town of Wickenburg, about four miles west of the downtown business district. A map illustrating the neighborhood (shaded in yellow) is presented above. The following table summarizes the neighborhood characteristics. NEIGHBORHOOD CHARACTERISTICS Location: (urban, suburban, rural) Suburban Built-Up: (>75%, 25-50%, <25%) 25% - 75% Growth Rate / Change: (rapid, stable, slow) Stable Change in Present Land Use: (not likely, likely*, taking place*) Taking Place * (*) From: Vacant land to Residential Neighborhood Boundaries North: Wickenburg town limits South: Wickenburg town limits East: Wickenburg town limits West: Wickenburg town limits Source: CBRE Neighborhood Analysis 29 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona RESIDENTIAL DEVELOPMENT The primary land use within the town of Wickenburg is single-family housing, primarily for retirees or winter visitors. Housing trends within the defined neighborhood are summarized in the following table NEIGHBORHOOD HOUSING TRENDS Property Values: (increasing, stable, declining) Stable Demand/Supply: (shortage, in balance, oversupply) In Balance Marketing Time: (< 3 months, 3-6 months, > 6 months) 3 - 6 Months Low High Predominant Price: $300,000 $1,500,000+ $620,000 Age: New 70 Years+ 15 -30 Years Source: Arizona Multiple Listing Service (ARMLS) Based on data extracted from the Arizona Multiple Listing Service (ARMLS), during the first half of 2024, home prices within the town of Wickenburg generally range from $300,000 to greater than $1,500,000+ with an overall average near $620,000. Trilogy At Wickenburg Ranch is a developing, 2,160-acre, all ages master planned community located northwest of downtown Wickenburg and on the site of one of the original guest ranches in Wickenburg. The community is designed around an 18-hole, championship golf course. The project is to contain approximately 2,324 lots and a built-out population of about 4,600 - 5,500 people. WICKENBURG Wickenburg lies in the foothills of the Bradshaw Mountains, along the banks of the Hassayampa River. The oldest town north of Tucson, Wickenburg boasts a rich western history which is still evident today. In 1863, Henry Wickenburg, for whom the town is named, discovered the Vulture Mine which in time become the richest gold-producing mine in Arizona’s history. In the early 1900's as the mine played out, ranching and tourism took over as the economic mainstays in the area. Today, Wickenburg offers a relaxing western lifestyle with a full range of municipal and private sector services. Traditionally, tourism, cattle ranching, and agriculture have been the main economic activities in Wickenburg. The major private employers include Rancho De Los Caballeros Resort, Safeway, Wickenburg Medical Center, Remuda Ranch, and The Meadows. The major public employers include Arizona Public Service, Southwest Gas, Town of Wickenburg, and Wickenburg Unified School District. Neighborhood Analysis 30 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Wickenburg Vulture Mine The Wickenburg area features a wide range of attractions, including the Vulture Mines, which produced $30 million in gold. A hiking guide detailing Vulture Peak information is available from the Chamber of Commerce. Robson’s Arizona Mining World and nearby jeep tours are also available. The Desert Caballeros Western Artifacts offers downtown visitors a landscaped park and rest area with statuary. A walking tour of historic buildings is also a highlight of the downtown area. The Hassayampa River Preserve provides a self-guided nature trail along Palm Lake and the banks of the Hassayampa River. The preserve is home to over 220 species of birds. Wishing Well Park The town of Wickenburg offers a wide range of community and cultural facilities. There is a community center, a 500-seat Del E. Webb Center for The Performing Arts, numerous art galleries, specialty gift shops, the Desert Caballeros Western Museum, a library, a swimming pool, two golf courses, a nature preserve, several tennis courts, a rodeo arena, and three parks. Neighborhood Analysis 31 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona The Bashas’ Center, located on Highway 89 in downtown Wickenburg, and the Safeway Center, located on Vulture Mine Road and US 60, are the primary retails centers located within the Wickenburg area. Several national restaurant chains (Taco Bell, McDonalds, and Pizza Hut) and convenience stores are located along the US Highways 60 and 93. Additional local retail, restaurants and offices are scattered throughout the area. The downtown tourist district at the junction of the two main highways features several small local business and restaurants. The Wickenburg School District includes Hassayampa Elementary School, Vulture Peak Middle School, and Wickenburg High School. Wickenburg is centered on the intersection of US Highways 60 and 93. US Highway 60/89 extends from central Phoenix in a northwesterly direction through Wickenburg and continues to Quartzsite, while US Highway 93 extends from Wickenburg and continues northwesterly to Las Vegas, Nevada. INDUSTRIAL FACILITIES Most of the industrial properties are located near Wickenburg Municipal Airport, which is located a few miles west of the downtown business district. Benner-Nawman is located at 3450 Sabin Brown Road and uses the 53,000 square foot facility for manufacturing, assembly, and distribution. The major product lines include specialty hand tools for the telecom and electrical industry, low-voltage pre-wire service boxes for housing telephone protectors and cable TV connections, portable rebar cutters and benders for the construction industry and office modular furniture products. Triad Steel Services operates a fabrication facility at 3640 Sabin Brown Road. The company provides steel fabrication/erection products and services to construction projects ranging from 50 to 5,000 tons. BearCat Manufacturing is located at 3650 Sabin Brown Road. The company builds asphalt road maintenance equipment. The facility contains their design, manufacturing, and warehousing departments. HOSPITAL/TREATMENT CENTERS Wickenburg Community Hospital is a non-profit community-owned hospital located at 520 Rose Lane. The hospital was built in 1956 and underwent extensive renovation in 2004. The hospital has 19 acute care beds and offers rehabilitation, radiology imaging/cat scan/ mammography/MRI, laboratory, cardiopulmonary care, physical/speech/occupational therapy, and nutritional counseling. There is also a nine-bed emergency room department that is staffed with emergency medicine physicians and critical care nurses 24-7. The Meadows is located on a 14-acre site at 1655 North Tegner Street. The facility’s treatment focuses on drug and alcohol addiction, sexual addictions, depression, psychological conditions, affective disorders and compulsive behaviors. Neighborhood Analysis 32 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Remuda Ranch Located at 1 East Apache Street, Remuda Ranch offers inpatient and residential treatment for eating disorders. The site was a former dude ranch before being converted in 1990 into a treatment center. Gatehouse Academy Located at 466 West Wickenburg Way and operates as a drug and alcohol rehabilitation for patients aged 17-25 years. The main campus has two separate, but adjacent settings known as the medical plaza and the educational building, which house the headquarters for these two integral departments. In any Gatehouse Academy setting, therapy and academics are separate from the residence. Residents have to leave where they live and go into the medical plaza next door for therapy or into the school building to attend classes. TOURISM Flying E Dude Ranch, a dude and working cattle ranch, is located four miles west of Wickenburg, near the famous Vulture Peak rock formation and home of the historic Vulture Gold Mine. Guest rooms are western in theme. Kay El Bar Ranch, which opened in 1926, has recently closed due the economic climate. Kay El Bar Historic Guest Ranch is on the National and Arizona Register of Historic Places and a member of the Arizona Dude Ranch Association. This is a turnkey operation including 60 acres, buildings, furnishings, 3 trucks, horse trailers, 25 horses, 50 saddles, heated pool and everything to keep the business rolling. The intimate ranch setting can host up to 24 guests. Rancho de los Caballeros is a 20,000-acre resort located at 1551 South Vulture Mine Road. The site offers rugged trails with seasoned wranglers and 100 saddle horses. The golf course is one of Golf Digest's Top 100 U.S. courses and the course design plays 7,014 yards with a challenging slope rating of 135. There is a full-service spa offering a wide array of health and beauty treatments. There is also a full-service restaurant and saloon. Del E. Webb Center for the Performing Arts is located at 1090 South Vulture Mine Road. The facility is a 600-seat theatre featuring outstanding artists from around the world in a variety of performances that are diverse, beautiful, high-energy and exciting including music, dance, theatre and special events. Hassayampa River Preserve is located at 49614 North US Highway 60. For most of its 100-mile course through the desert, the Hassayampa River flows only underground. But within the preserve its crystal-clear waters emerge, flowing above ground throughout the year. The 730-acre Hassayampa River Preserve, located on US Highway 60 three miles southeast of Wickenburg at milepost 114, was created in 1987 to protect a rare desert cottonwood/willow streamside habitat that attracts more than 280 species of birds annually and supports diverse plant and animal communities. Neighborhood Analysis 33 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona TRANSPORTATION US Highway 60 provides a direct link (northwest/southeast) between metropolitan Phoenix and the town of Wickenburg. From Wickenburg, US Highway 60 continues in a westerly direction to Quartzsite in far western Arizona. US Highway 93 provides direct access between Wickenburg and Kingman, Arizona, which in turn links to Las Vegas, Nevada. As recently as 1997, US Highway 93 was mostly a two-lane road between Wickenburg and Interstate 40, and was known for its dangerous curves and hills. In the late 1990’s, the Arizona Department of Transportation began widening the roadway to four lanes and in some areas building a completed new roadway. State Route 71 connects US Highways 60 and 93 northwest of Wickenburg. State Route 89 connects US Highway 93 with Prescott/Prescott Valley northeast of Wickenburg. Interstate 11 is a proposed interstate highway to extend from Casa Grande, Arizona, northwest to Buckeye, Arizona, then northwest to Kingman, Arizona, before terminating in Las Vega Nevada, with a proposed second section extending north to Reno, Nevada. The proposed highway is still in a preliminary study phase, with an exact route has yet to be determined. Preliminarily, the alignment would extend concurrently with US Highway 93. Given the extended time frame involved and uncertainty with respect to funding, Interstate 11 is not anticipated to have any significant impact in the immediate area for the foreseeable future. Wickenburg Municipal Airport The Municipal Airport/Wellik Field is owned and operated by the town of Wickenburg. The town of Wickenburg contracts with a Fixed Base Operator for the daily operation of the airport including fuel sales and line services. The FBO offers snacks and other merchandise for sale in the terminal and as available can provide a courtesy car. Aircraft repair, maintenance, and painting is available from I.A. Certified Aircraft Mechanics. The Airport is an integral element in the local economy. It serves the local guest ranches and medical treatment facilities. DEMOGRAPHICS Selected neighborhood demographics within a one, three, and five-mile radius from the subject are shown in the following table: Neighborhood Analysis 34 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona As indicated above, the population within a three-mile radius of the subject property is projected to increase from the Year 2024 estimate of 2,739, to a total of 3,536 by 2029, representing an average compounded annual increase of 4.83%. The number of households in 2024, estimated at 1,387 is projected to increase to 1,787 by Year 2029, representing an increase of 400 households, or 80 households per year, and an average annual compounded growth rate of 5.2%. This information suggests relatively strong demand for additional residential housing in the subject’s immediate market area over the next several years. The median ($72,936) and average Neighborhood Analysis 35 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona ($111,931) household income within a three-mile radius of the subject property is generally similar to the entire metropolitan Phoenix area. CONCLUSION Aside from some modest growth within the town of Wickenburg, no significant changes are anticipated within the general area of the subject neighborhood. The vast majority of the land situated outside of Wickenburg, Aguila, and Bagdad is either State Trust Land or under ownership of the Bureau of Land Management (BLM). No significant changes in land ownership are anticipated in this particular location for the foreseeable future. Site Analysis 36 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Site Analysis The following table summarizes the salient characteristics of the subject site. SITE SUMMARY AND ANALYSIS Physical Description Net Site Area 0.54 Acres 23,522 SF Shape Topography Parcel Number(s) Zoning District Flood Map Panel No. & Date 04013C0310M 18-Sep-20 Flood Zone Zone X (Shaded) Adjacent Land Uses Comparative Analysis Visibility Functional Utility Adequacy of Utilities Drainage Utilities Availability Water Yes Sewer Yes Electricity Yes Various sources compiled by CBRE Utilities are available to the site Provider Town of Wickenburg Rating Low Poor due to well site and access easement Irregular Generally level IND-2, Light Industrial (Wickenburg) Light industrial uses and the Wickenburg Municipal Airport Portion of 505-41-008R (Maricopa County) Appears Adequate Town of Wickenburg Arizona Public Service (APS) LOCATION The subject property is located at the northeast corner of Sabin Brown Road and Industrial Drive, in Wickenburg, approximately four miles west of the downtown business district. CONFIGURATION AND SIZE The subject site is irregular in shape and encompasses 23,522 square feet, or 0.54 net acres. TOPOGRAPHY/FLOOD STATUS/SOIL/ENVIRONMENTAL Topography The topography of the site is generally level. Flood Status No drainage problems were noted during inspection. According to Flood Insurance Rate Map Number 04013C0310M (effective date September 18, 2020), prepared by FEMA, the subject site is located in Zone X (Shaded), which is not a special flood hazard area. Flood insurance is not required. Copies of the flood maps are presented on the following two pages, with the location of the subject site indicated. Site Analysis 37 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Subject Site Analysis 38 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Subject Site Analysis 39 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Soil A soils investigation report pertaining to the subject property was not provided for review. Based on the existence of industrial uses and the Wickenburg Municipal Airport in the immediate area, there do not appear to be any adverse soil conditions, which would prohibit use of the site for open storage or parking. Environmental An environmental site assessment (ESA) pertaining to the subject site was not provided for review. During inspection of the property and surrounding area, no apparent signs of environmental contamination, hazardous waste storage or dumping were observed; however, the appraisers are not qualified to detect the existence of potentially hazardous material which may be present on or near the site. The value conclusion is based on the assumption that there are no adverse environmental conditions effecting the subject site. UTILITIES AND SERVICES Utility providers in the area of the subject site are summarized below. Water: Town of Wickenburg Sewer: Town of Wickenburg Electricity: Arizona Public Service (APS) EASMENTS/ENCROACHMENTS/COVENANTS/CONDITIONS There is a 225 square foot municipal well situated in the middle portion of the subject site and there is an easement which extends through the site allowing access to the well. The presence of the municipal well and easement significantly reduces the marketability/appeal of the subject site essentially limiting potential uses of the site to open storage and parking for the adjacent property owner. INGRESS/EGRESS Vehicular access to the is available via Sabin Brown Road and Industrial Drive, both of which are asphalt paved collector streets. Sabin Brown Road connects to Wickenburg Way (US 60) one block to the southwest. ADJACENT PROPERTIES Surrounding land uses include industrial oriented uses and the Wickenburg Municipal Airport. ASSESSMENTS AND REAL ESTATE TAXES Given the subject site represents a relatively small portion of a larger parcel which includes the runway to the Wickenburg Municipal Airport, an analysis of assessments and real estate taxes is not pertinent. Site Analysis 40 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona CONCLUSION In sum, the location, size, configuration, topography, availability of utilities and services, surrounding land uses, zoning (to be discussed in the following section) and presences of a municipal well and associated easement are factors conducive to a very limited number of uses for the subject site, primarily outdoor storage and parking for the adjacent property owner. Site Analysis 41 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Zoning The subject site an overall parcel the subject is a part of is zoned IND-2, Light Industrial, by the town of Wickenburg. A copy of the zoning map is presented below. IND-2, LIGHT INDUSTRIAL The purpose of this zoning district is to provide for light industrial uses in locations which are suitable and appropriate taking into consideration the land uses on adjacent or nearby properties, access to a major street or highway, rail service or other means of transportation, and the availability of public utilities. Principal uses permitted in this zoning district include the manufacture, compounding, processing, packaging or treatment of materials which do not cause or produce objectionable effects that would impose hazard to adjacent or other properties by reason of smoke, soot, dust, radiation, odor, noises, vibrations, heat, glare, toxic fumes, or other conditions that would affect adversely the public health, safety and general welfare. As indicated by the Wickenburg General Plan map presented on the following page, the subject site is designated for employment/business park use. Given the subject’s industrial zoning classification and Wickenburg General Plan designation for employment/industrial use, an industrial use for the subject appears most likely. Subject Site Analysis 42 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Subject Market Analysis 43 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Market Analysis TOWN OF WICKENBURG INDUSTRIAL MARKET ANALYSIS Below are tables and graphs provided by Costar Custom Analytics Search that summarize key market indicators within the town of Wickenburg. Overview The following table summarizes the Wickenburg industrial market as of Q4 2024. As indicated above, there are 19 industrial properties, totaling 218,523 square feet within the town of Wickenburg, per CoStar, Inc. data. The vacany rate is currently 0% with a five-year average of 0.8%. No industrial space has been added to the inventory over the past year and no new industrial space is under development. The line graph and bar graph below show the historical 10-year average vacancy rate for the Wickenburg industrial market. Market Analysis 44 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona As can be seen, the average vacancy rate has ranged from about 0% and 5% since 2016. Again, there is no vacant space as of Q4 2024. Absorption The following bar graph shows net absorption demand over the past 10 years. As indicated above, net absorption has been relatively nominal in recent years, mainly due to the lack of available space. All of the space constructed in 2023 was absorbed. Under Construction The following bar graphs show new construction activity over the past 10 years. Market Analysis 45 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona As indicated above, no new buildings were added to the inventory between 2014 and 2022; however, 13,803 square feet of industrial space was constructed in 2023. Conclusion The Wickenburg industrial market has experienced very low vacancy in recent years, although there has been little demand for additional space, as no new buildings were added to the inventory between 2014 and 2022. Although some industrial space was added to the inventory in 2023, no new inventory has been added in 2024 and there is no industrial space under construction. Highest and Best Use 46 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Highest and Best Use In appraisal practice, the concept of highest and best use represents the premise upon which value is based. The four criteria the highest and best use must meet are: legally permissible; physically possible; financially feasible; and maximally productive. The highest and best use analysis of the subject is discussed below. AS VACANT Legal Permissibility As noted, the subject site is zoned IND-2, Light Industrial, by the town of Wickenburg. Additionally, the site is designated by the Town for employment/industrial use. Physical Possibility The subject property is located at the northeast corner of Sabin Brown Road and Industrial Drive, in Wickenburg, approximately four miles west of the downtown business district. The subject site is irregular in shape and encompasses 23,522 square feet, or 0.54 net acres. The topography of the site is generally level. No drainage problems were noted during inspection and the subject site is not located within a flood hazard area. Furthermore, no adverse soil or environmental conditions were observed, or are known to exist. It appears utilities are available to the subject site. As noted, there is a 225 square foot municipal well located in the middle portion of the subject site and there is an easement which extends through the site allowing access to the municipal well. The presence of the well site and easement significantly impacts the marketability/appeal of the subject site, essentially limiting potential uses of the subject site to open storage and parking for the adjacent property owner. Vehicular access to the is available via Sabin Brown Road and Industrial Drive, both of which are asphalt paved collector streets. Sabin Brown Road connects to Wickenburg Way (US 60) one block to the southwest. Surrounding land uses include industrial oriented uses and the Wickenburg Municipal Airport. In sum, the location, size, configuration, topography, availability of utilities and services, zoning and the presence of the municipal well and associated easement are factors conducive to a limited number of uses for the subject site, primarily outdoor storage and parking for the adjacent property owner. Financial Feasibility As discussed in the Market Analysis section, industrial market conditions are generally favorable within the town of Wickenburg. The average vacancy rate remains low and there has been no new industrial space added to the inventory in the last 10 years, with the exception of 13,803 square feet of industrial space constructed in 2023. Highest and Best Use 47 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Maximum Productivity - Conclusion The final test of highest and best use of the site, as vacant, is that the use be maximally productive, yielding the highest return to the land. Although financial feasibility of any proposed use is beyond the scope of this report, it appears reasonable to conclude based on the information presented above and within the Market Analysis, the highest and best use of the subject, as vacant, is for assemblage with the adjacent property to the east with potential uses limited to outdoor storage and parking. The most likely buyer of the subject property, as vacant, is the adjacent property owner user who can utilize the site for outdoor storage and/or parking given the presence of the well site and associated easement. Sales Comparison Approach 48 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Sales Comparison Approach The Sales Comparison Approach involves comparing the subject property with similar vacant land parcels which have either recently sold or are currently listed for sale. This approach is based on the principle of substitution, which states the value of a property tends to be set by the price that would be paid to acquire a substitute property of similar utility and desirability within a reasonable amount of time. Since the town of Wickenburg’s General Plan designates the subject site for employment/industrial and lends itself to an industrial-related use, the sales utilized in this Sales Comparison Approach were acquired for industrial oriented uses. The vacant land sales are compared to the 0.54-acre subject site on the basis of price per square foot of net land area basis. This unit of comparison is most typical in the valuation of land zoned for industrial use. Each comparable was related to the subject site in terms of the following factors: 1. 2. 3. 4. 5. 6. 7. 8. Real Property Rights Conveyed Financing Terms Conditions Of Sale Market Conditions (Date of Sale) Location Physical Characteristics Zoning Highest And Best Use The dearth of land sales designated for industrial use within the town of Wickenburg (there has been just one industrial land sale within the past 3+ years) necessitated extending the search for comparable sales to outside of the immediate area. Therefore, land sales from the northwest portion of metropolitan Phoenix and the Prescott/Prescott Valley area are employed within this analysis. Data sheets regarding the land sales considered most pertinent in developing an opinion of the market value for the subject site are included in the Addenda. A map showing the location of the comparables in relation to the subject and a table summarizing pertinent data for each sale are presented on the following page. Sales Comparison Approach 49 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona SUMMARY OF COMPARABLE INDUSTRIAL LAND SALES Interest Sale Size Size Price No. Property Location Type Date Transferred Zoning Price (Acres) (SF) Per SF 1 W-SWC of Industrial Drive and Sabin Brown Road, Wickenburg Sale Mar-22 Fee Simple IND-2 $375,000 3.14 136,735 $2.74 2 NWC of Wilkinson Drive and Cirrus Drive, Prescott Sale Aug-22 Fee Simple IL $218,500 1.13 49,233 $4.44 3 NWC of Cactus Road and Perryville Road Unincorporated Maricopa County Sale Jan-23 Fee Simple RU-43 $1,341,637 9.99 435,009 $3.08 4 SW-SWC of Melville Road and Inter Cal Way, Prescott Sale Jan-24 Fee Simple IL $197,272 1.11 48,352 $4.08 Subject NEC of Sabin Brown Road and Industrial Drive, Wickenburg --- --- Fee Simple IND-2 --- 0.54 23,522 --- Compiled by CBRE Transaction ELEMENTS OF COMPARISON Real Property Rights Conveyed The real property rights conveyed in each comparable is the fee simple interest, which is consistent with the property rights of the property being appraised; therefore, no adjustments for property rights conveyed are indicated. Financing Terms The market value opinion for the subject site is based on all-cash, or cash-equivalent financing. Cash transactions typically sell for less than those sales which involve favorable financing terms Sales Comparison Approach 50 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona such as below market interest rates, buy downs, wraparound mortgages, interest only loans, etc. Therefore, cash equivalency adjustments must be made to sales involving favorable financing terms. Since all comparables represent cash-to-seller or cash equivalent transactions, no adjustments for financing terms are applicable. Conditions of Sale An adjustment for conditions of sale is used to reflect the motivations of buyers and sellers in sales that are not arm’s-length transactions, due to duress, special relationships, or unusual circumstances. Since all comparable sales represent arm’s-length transactions with no atypical circumstances reported, no conditions of sale adjustments are required. Market Conditions (Date of Sale) The subject is being appraised as of a specific date; therefore, adjustments to the comparables must be recognized for changes in market conditions between the sale dates of the comparables and the date of valuation. The adjustment for market conditions is not always related to “time”; changes in market conditions may be caused by inflation, deflation, fluctuations in supply and demand, or other factors. The four sales transpired between March 2022 and January 2024, or within about the past 32 months. As discussed in the Market Analysis section, there has only been one building constructed in Wickenburg within the last 10 years. Industrial market conditions within metropolitan Phoenix had been highly favorable over the past several years resulting in an upward trend in land prices, while appreciation in some locations have been more muted. Over the past approximate one to two years, the market has adjusted to higher borrowing costs and economic uncertainty, which resulted in price reductions for both improved industrial properties and vacant land designated for industrial use, although the correction in land prices has been relatively modest in most locations. Given modestly fluctuating prices in more outlying locations like the subject property and comparable sales, no adjustments for market conditions are considered necessary. Location The subject site is located at the northeast corner of Sabin Brown Road and Industrial Drive, in Wickenburg. A downward adjustment is considered necessary to Comparable 1 which is located in very close proximity to the subject property, but benefits from frontage along US 60. A downward adjustment is considered necessary to Comparable 3, which has a more central location within the Phoenix MSA. Furthermore, downward adjustments are made to Comparables 2 and 4, both of which are located near the Prescott Airport. Physical Characteristics Adjustments for physical characteristics are necessary when the physical characteristics of a comparable property are different from those of the subject. Primary factors analyzed include site size, configuration, access to utilities, accessibility, and on-site and off-site development requirements. Sales Comparison Approach 51 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Site Size Typically, as the site size increases, the per square foot price decreases, which is primarily due to economies of scale and smaller pool of potential buyers. Inversely, the per square foot price generally increases as the size decreases, due to the fact that more buyers have the ability to acquire smaller parcels, thus increasing demand for smaller parcels. The subject site contains 0.54 net acres, compared to between 1.11 and 9.99 net acres for the comparables. Although the subject site much smaller than any of the four comparables, the subject’s relatively small size is a limiting factor impacting (or limiting) development potential. In other words, the subject’s smaller size is not considered to be a superior feature in this particular case. As a result, no adjustments for size are considered necessary. Configuration The subject site has an irregular rectangular configuration. Since all four comparables have configurations adequately suited for industrial oriented development, no adjustments are considered necessary. Utilities As noted, utilities and services are available to the subject site. Similarly, all four comparables had utilities available at their respective dates of sale. Therefore, no adjustments are applied. On-Site Development Requirements The topography of the subject site is generally level and the site is not situated within a flood zone. As noted, there is a 225 square foot municipal well situated in the middle portion of the subject site and there is an easement which extends through the subject site allowing access to the municipal well. The presence of the well and associated easement significantly reduces the marketability/appeal of the subject site essentially limiting potential uses to open storage and parking. All four comparables have a generally level topography and none are not located within a flood hazard area. Unlike the subject site, none of the comparables are impacted by any atypical physical characteristics like the subject site. Consequently, rather significant downward adjustments are applied to all four comparable sales to offset the subject’s limitations. Off-Site Development Requirements Upon development of the subject site, no half street improvements will be required and there is paved access to the site. Similarly, none of the comparables will require half street improvements and all are accessible via paved access. Thus, no adjustments are considered necessary for this factor. Zoning The subject site is zoned IND-2, Light Industrial, by the town of Wickenburg. Since Comparables 1, 2, and 4 were hard zoned at the times of sale allowing for industrial oriented use, no adjustments are considered necessary to these three sales. An upward adjustment is applied to Sales Comparison Approach 52 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Comparable 3 which did not have hard zoning in place (zoned RU-43) and will require a rezone prior to development. Highest and Best Use The highest and best use for the subject site is essentially limited to outside storage and/or parking as part of an industrial property (adjacent property owner). Since all comparables were acquired for industrial oriented development, no adjustments for highest and best use are considered necessary. SUMMARY OF ELEMENTS OF COMPARISON Several factors were considered in the land value analysis including real property rights conveyed, financing terms, conditions of sale, market conditions (time), location, physical characteristics, zoning, and highest and best use. Presented in the following table is a summary of the adjustments for each comparable. LAND SALES ADJUSTMENT GRID Comparable Number 1 2 3 4 Subject Transaction Type Sale Sale Sale Sale --- Transaction Date Mar-22 Aug-22 Jan-23 Jan-24 --- Interest Transferred Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Zoning IND-2 IL RU-43 IL IND-2 Sale Price $375,000 $218,500 $1,341,637 $197,272 --- Size (Acres) 3.14 1.13 9.99 1.11 0.54 Size (SF) 136,778 49,223 435,164 48,352 23,522 Price Per SF $2.74 $4.44 $3.08 $4.08 --- Price ($ PSF) $2.74 $4.44 $3.08 $4.08 Property Rights Conveyed 0% 0% 0% 0% Financing Terms 0% 0% 0% 0% Conditions of Sale 0% 0% 0% 0% Market Conditions (Time) 0% 0% 0% 0% Subtotal $2.74 $4.44 $3.08 $4.08 Location -5% -15% -20% -15% Size 0% 0% 0% 0% Configuration 0% 0% 0% 0% Access to Utilities 0% 0% 0% 0% On-Site Development -65% -65% -65% -65% Off-Site Development 0% 0% 0% 0% Zoning 0% 0% 10% 0% Highest & Best Use 0% 0% 0% 0% Total Other Adjustments -70% -80% -75% -80% Value Indication for Subject $0.82 $0.89 $0.77 $0.82 Absolute Adjustment 70% 80% 95% 80% Compiled by CBRE The comparables provide an adjusted range of $0.77 to $0.89 per square foot, with added support for a midrange value conclusion and a mean indication of $0.83 per square foot. Since all four comparables required a substantial amount of adjusting (primarily for on-site Sales Comparison Approach 53 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona development potential), none stands out as being particularly good indicator of value. Nonetheless, added weight is applied to Comparable 1 due to its close proximity to the subject and being most similar overall. “AS IS” MARKET VALUE Based on the preceding analysis of the most pertinent sales data available, the “as is” market value conclusion is as follows. CONCLUDED LAND VALUE $ PSF Subject SF Total $0.80 x 23,522 = $18,818 $0.85 x 23,522 = $19,994 Indicated Value: $19,400 ($ PSF) $0.82 Compiled by CBRE Therefore, after considering all facts available, subject to the underlying assumptions, and limiting conditions included, it was concluded the fee simple interest in the subject site had an “as is” market value, as of November 20, 2024, of: MARKET VALUE CONCLUSION Appraisal Premise Interest Appraised Date of Value Value Conclusion "As Is" Market Value Fee Simple Estate November 20, 2024 $19,400 Compiled by CBRE Assumptions and Limiting Conditions 54 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona Assumptions and Limiting Conditions 1. CBRE, Inc. through its appraiser (collectively, “CBRE”) has inspected through reasonable observation the subject property. However, it is not possible or reasonably practicable to personally inspect conditions beneath the soil and the entire interior and exterior of the improvements on the subject property. Therefore, no representation is made as to such matters. 2. The report, including its conclusions and any portion of such report (the “Report”), is as of the date set forth in the letter of transmittal and based upon the information, market, economic, and property conditions and projected levels of operation existing as of such date. The dollar amount of any conclusion as to value in the Report is based upon the purchasing power of the U.S. Dollar on such date. The Report is subject to change as a result of fluctuations in any of the foregoing. CBRE has no obligation to revise the Report to reflect any such fluctuations or other events or conditions which occur subsequent to such date. 3. Unless otherwise expressly noted in the Report, CBRE has assumed that: (i) Title to the subject property is clear and marketable and that there are no recorded or unrecorded matters or exceptions to title that would adversely affect marketability or value. CBRE has not examined title records (including without limitation liens, encumbrances, easements, deed restrictions, and other conditions that may affect the title or use of the subject property) and makes no representations regarding title or its limitations on the use of the subject property. Insurance against financial loss that may arise out of defects in title should be sought from a qualified title insurance company. (ii) Existing improvements on the subject property conform to applicable local, state, and federal building codes and ordinances, are structurally sound and seismically safe, and have been built and repaired in a workmanlike manner according to standard practices; all building systems (mechanical/electrical, HVAC, elevator, plumbing, etc.) are in good working order with no major deferred maintenance or repair required; and the roof and exterior are in good condition and free from intrusion by the elements. CBRE has not retained independent structural, mechanical, electrical, or civil engineers in connection with this appraisal and, therefore, makes no representations relative to the condition of improvements. CBRE appraisers are not engineers and are not qualified to judge matters of an engineering nature, and furthermore structural problems or building system problems may not be visible. It is expressly assumed that any purchaser would, as a precondition to closing a sale, obtain a satisfactory engineering report relative to the structural integrity of the property and the integrity of building systems. (iii) Any proposed improvements, on or off-site, as well as any alterations or repairs considered will be completed in a workmanlike manner according to standard practices. (iv) Hazardous materials are not present on the subject property. CBRE is not qualified to detect such substances. The presence of substances such as asbestos, urea formaldehyde foam insulation, contaminated groundwater, mold, or other potentially hazardous materials may affect the value of the property. (v) No mineral deposit or subsurface rights of value exist with respect to the subject property, whether gas, liquid, or solid, and no air or development rights of value may be transferred. CBRE has not considered any rights associated with extraction or exploration of any resources, unless otherwise expressly noted in the Report. (vi) There are no contemplated public initiatives, governmental development controls, rent controls, or changes in the present zoning ordinances or regulations governing use, density, or shape that would significantly affect the value of the subject property. (vii) All required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, nor national government or private entity or organization have been or can be readily obtained or renewed for any use on which the Report is based. (viii) The subject property is managed and operated in a prudent and competent manner, neither inefficiently or super-efficiently. (ix) The subject property and its use, management, and operation are in full compliance with all applicable federal, state, and local regulations, laws, and restrictions, including without limitation environmental laws, seismic hazards, flight patterns, decibel levels/noise envelopes, fire hazards, hillside ordinances, density, allowable uses, building codes, permits, and licenses. (x) The subject property is in full compliance with the Americans with Disabilities Act (ADA). CBRE is not qualified to assess the subject property’s compliance with the ADA, notwithstanding any discussion of possible readily achievable barrier removal construction items in the Report. Assumptions and Limiting Conditions 55 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona (xi) All information regarding the areas and dimensions of the subject property furnished to CBRE are correct, and no encroachments exist. CBRE has neither undertaken any survey of the boundaries of the subject property nor reviewed or confirmed the accuracy of any legal description of the subject property. Unless otherwise expressly noted in the Report, no issues regarding the foregoing were brought to CBRE’s attention, and CBRE has no knowledge of any such facts affecting the subject property. If any information inconsistent with any of the foregoing assumptions is discovered, such information could have a substantial negative impact on the Report. Accordingly, if any such information is subsequently made known to CBRE, CBRE reserves the right to amend the Report, which may include the conclusions of the Report. CBRE assumes no responsibility for any conditions regarding the foregoing, or for any expertise or knowledge required to discover them. Any user of the Report is urged to retain an expert in the applicable field(s) for information regarding such conditions. 4. CBRE has assumed that all documents, data and information furnished by or behalf of the client, property owner, or owner’s representative are accurate and correct, unless otherwise expressly noted in the Report. Such data and information include, without limitation, numerical street addresses, lot and block numbers, Assessor’s Parcel Numbers, land dimensions, square footage area of the land, dimensions of the improvements, gross building areas, net rentable areas, usable areas, unit count, room count, rent schedules, income data, historical operating expenses, budgets, and related data. Any error in any of the above could have a substantial impact on the Report. Accordingly, if any such errors are subsequently made known to CBRE, CBRE reserves the right to amend the Report, which may include the conclusions of the Report. The client and intended user should carefully review all assumptions, data, relevant calculations, and conclusions of the Report and should immediately notify CBRE of any questions or errors within 30 days after the date of delivery of the Report. 5. CBRE assumes no responsibility (including any obligation to procure the same) for any documents, data or information not provided to CBRE, including without limitation any termite inspection, survey or occupancy permit. 6. All furnishings, equipment and business operations have been disregarded with only real property being considered in the Report, except as otherwise expressly stated and typically considered part of real property. 7. Any cash flows included in the analysis are forecasts of estimated future operating characteristics based upon the information and assumptions contained within the Report. Any projections of income, expenses and economic conditions utilized in the Report, including such cash flows, should be considered as only estimates of the expectations of future income and expenses as of the date of the Report and not predictions of the future. Actual results are affected by a number of factors outside the control of CBRE, including without limitation fluctuating economic, market, and property conditions. Actual results may ultimately differ from these projections, and CBRE does not warrant any such projections. 8. The Report contains professional opinions and is expressly not intended to serve as any warranty, assurance or guarantee of any particular value of the subject property. Other appraisers may reach different conclusions as to the value of the subject property. Furthermore, market value is highly related to exposure time, promotion effort, terms, motivation, and conclusions surrounding the offering of the subject property. The Report is for the sole purpose of providing the intended user with CBRE’s independent professional opinion of the value of the subject property as of the date of the Report. Accordingly, CBRE shall not be liable for any losses that arise from any investment or lending decisions based upon the Report that the client, intended user, or any buyer, seller, investor, or lending institution may undertake related to the subject property, and CBRE has not been compensated to assume any of these risks. Nothing contained in the Report shall be construed as any direct or indirect recommendation of CBRE to buy, sell, hold, or finance the subject property. 9. No opinion is expressed on matters which may require legal expertise or specialized investigation or knowledge beyond that customarily employed by real estate appraisers. Any user of the Report is advised to retain experts in areas that fall outside the scope of the real estate appraisal profession for such matters. 10. CBRE assumes no responsibility for any costs or consequences arising due to the need, or the lack of need, for flood hazard insurance. An agent for the Federal Flood Insurance Program should be contacted to determine the actual need for Flood Hazard Insurance. 11. Acceptance or use of the Report constitutes full acceptance of these Assumptions and Limiting Conditions and any special assumptions set forth in the Report. It is the responsibility of the user of the Report to read in full, comprehend and thus become aware of all such assumptions and limiting conditions. CBRE assumes no responsibility for any situation arising out of the user’s failure to become familiar with and understand the same. 12. The Report applies to the property as a whole only, and any pro ration or division of the title into fractional interests will invalidate such conclusions, unless the Report expressly assumes such pro ration or division of interests. Assumptions and Limiting Conditions 56 NEC of Sabin Brown Road and Industrial Drive – Wickenburg, Arizona 13. The allocations of the total value estimate in the Report between land and improvements apply only to the existing use of the subject property. The allocations of values for each of the land and improvements are not intended to be used with any other property or appraisal and are not valid for any such use. 14. The maps, plats, sketches, graphs, photographs, and exhibits included in this Report are for illustration purposes only and shall be utilized only to assist in visualizing matters discussed in the Report. No such items shall be removed, reproduced, or used apart from the Report. The report shall not be duplicated or provided to any unintended users in whole or in part without the written consent of CBRE, which consent CBRE may withhold in its sole discretion. Exempt from this restriction is duplication for the internal use of the intended user and its attorneys, accountants, or advisors for the sole benefit of the intended user. Also exempt from this restriction is transmission of the Report pursuant to any requirement of any court, governmental authority, or regulatory agency having jurisdiction over the intended user, provided that the Report and its contents shall not be published, in whole or in part, in any public document without the written consent of CBRE, which consent CBRE may withhold in its sole discretion. Finally, the Report shall not be made available to the public or otherwise used in any offering of the property or any security, as defined by applicable law. Any unintended user who may possess the Report is advised that it shall not rely upon the Report or its conclusions and that it should rely on its own appraisers, advisors and other consultants for any decision in connection with the subject property. CBRE shall have no liability or responsibility to any such unintended user. Addenda ADDENDA Addenda Addendum A COMPARABLE LAND SALES Sale Land - Industrial No. 1 Property Name N/A Address W-SWC of Industrial Road and Sabin Brown Road Wickenburg, AZ 85390 County Maricopa Govt./Tax ID 505-41-027, 028, and 029 Area Measurement(NRA) Land Area Net 3.139 ac/ 136,735 sf Land Area Gross N/A/ N/A Site Development Status Raw Utilities All utilities were available to the site at the time of sale. Maximum FAR N/A Max Allow Bldg Units/Density N/A Min Land Bldg Ratio N/A Shape Irregular Primary Frontage N/A ft on Industrial Road Secondary Frontage N/A ft on Wickenburg Way (US 60) Topography Generally Level Flood Zone Class Zone X (Shaded) Flood Panel No./ Date 04013C0310M/ Sep 2020 Zoning IND-2, Light Industrial (Wickenburg) Entitlement Status None Proposed Use or Development N/A Transaction Details Type Sale Primary Verification Public records, CoStar, Inc., and Vizzda Interest Transferred Fee Simple Transaction Date 03/30/2022 Condition of Sale Typically motivated arms length transaction Recording Date 03/30/2022 Recorded Buyer Daniel & Tracey Dill Sale Price $375,000 Buyer Type Private Investor Financing Other(See Comments) Recorded Seller John & Sharon F Crothers Cash Equivalent $375,000 Marketing Time N/A Capital Adjustment $0 Listing Broker N/A % Interest Purchased 100% Doc # 2022-0281533 and 0281547 Adjusted Price $375,000 Adjusted Price / ac and / sf $119,465 / $2.74 Adjusted Price/ FAR N/A Adjusted Price/ Unit N/A Comments This comparable represents the sale of 3.14 acres of vacant land located west of the southwest corner of Industrial Drive and Sabin Brown Road within Wickenburg Industrial Park, in Wickenburg. The site is zoned IND-2, Light Industrial, by the town of Wickenburg, and was purchased in March 2022 for $375,000, or $2.74 per square foot. Surrounding land uses primarily include industrial oriented uses and the Wickenburg Municipal Airport a short distance to the east, across Sabin Brown Road. The site has frontage along Industrial Road, while access to Wickenburg Way (US 60) is a short distance to the south via Sabin Brown Road. Upon development, no significant half street improvements will be required. Terms of sale included a cash down payment of $220,000, with the balance carried by the seller. Although the exact terms of the seller carryback were not disclosed, given the substantial down payment, the transaction is considered to be cash equivalent. Sale Land - Industrial No. 2 Property Name Prescott Airport Industrial Lot 20 Address NWC of Wilkinson Drive and Cirrus Drive Prescott, AZ 86301 County Yavapai Govt./Tax ID 102-03-037 Area Measurement(NRA) Land Area Net 1.130 ac/ 49,233 sf Land Area Gross N/A/ N/A Site Development Status Raw Utilities All available to site at time of sale Maximum FAR N/A Max Allow Bldg Units/Density N/A Min Land Bldg Ratio N/A Shape Irregular Primary Frontage 310 ft on Wilkinson Drive Secondary Frontage 160 ft on Cirrus Drive Topography Generally Level Flood Zone Class Zone X (Unshaded) Flood Panel No./ Date 04025C1693H/ Mar 2018 Zoning IL, Industrial Light (Presott) Entitlement Status None Proposed Use or Development Industrial Transaction Details Type Sale Primary Verification Listing Broker, CoStar Inc., and public records Interest Transferred Fee Simple Transaction Date 08/19/2022 Condition of Sale Arm's length transaction/seller carry Recording Date 08/19/2022 Recorded Buyer LEC Holdings LLC Sale Price $218,500 Buyer Type Private Investor Financing Other(See Comments) Recorded Seller Investment Potential, L.L.C. Cash Equivalent $218,500 Marketing Time 39 Month(s) Capital Adjustment $0 Listing Broker Matthew Fish (480) 309-1089 % Interest Purchased 100% Doc # 2022-0049835 Adjusted Price $218,500 Adjusted Price / ac and / sf $193,329 / $4.44 Adjusted Price/ FAR N/A Adjusted Price/ Unit N/A Comments This comparable represents the sale of a 1.13-acre vacant site located at the northwest corner of Wilkinson Drive and Cirrus Drive, within the Prescott Regional Airpark and Commerce Center, in Prescott, Arizona. The site is zoned IL, Industrial Light, by the city of Prescott. Surrounding land uses primarily include industrial oriented uses and other vacant lots within the Prescott Regional Airport. The site has frontage along Wilkinson Drive, Cirrus Drive, and Melville Road, while access to Arizona Route 89A is approximately two miles to the south via Larry Caldwell Road. No significant half street improvements will be required upon development. The site sold for $218,500 or $4.44 per square foot with a $75,000 down payment (34%) and the remainder of the balance carried by the seller. Given the amount of the down payment, the price is thought to be cash equivalent. Sale Land - Industrial No. 3 Property Name N/A Address NWC of Cactus Road and Perryville Road (alignment) Unincorporated Maricopa County, AZ 85388 County Maricopa Govt./Tax ID 502-07-005G Area Measurement(NRA) Land Area Net 9.986 ac/ 435,009 sf Land Area Gross N/A/ N/A Site Development Status Raw Utilities All utilities were available to the site at the time of sale. Maximum FAR N/A Max Allow Bldg Units/Density N/A Min Land Bldg Ratio N/A Shape Rectangular Primary Frontage N/A ft on Cactus Road Secondary Frontage N/A ft Topography Generally Level Flood Zone Class Zone X (Shaded) Flood Panel No./ Date 04013C1655L/ Oct 2013 Zoning R-43, Residential with 43,000 SF Minimum (Maricopa County) Entitlement Status None Proposed Use or Development N/A Transaction Details Type Sale Primary Verification CoStar, Inc.; Vizzda; and public records Interest Transferred Fee Simple Transaction Date 01/31/2023 Condition of Sale Typically motivated arms length transaction Recording Date 01/31/2023 Recorded Buyer CC Land Acquisitions Maricopa 2 LLC Sale Price $1,341,637 Buyer Type End User Financing Cash to Seller Recorded Seller Cook Bros LLC Cash Equivalent $1,341,637 Marketing Time N/A Capital Adjustment $0 Listing Broker N/A % Interest Purchased 100% Doc # 2023-0049986 Adjusted Price $1,341,637 Adjusted Price / ac and / sf $134,346 / $3.08 Adjusted Price/ FAR N/A Adjusted Price/ Unit N/A Comments This comparable represents the sale of 9.99 acres of vacant land located along the north side of Cactus Road at Perryville Road, in unincorporated Maricopa County. The site is zoned R-43, Residential with 43,000 SF minimum, by Maricopa County, and was purchased in January 2023 for $1,341,637, or $3.08 per square foot. The topography is generally level to slightly rolling/undulating native desert. Surrounding land uses primarily include a water treatment facility, single-family housing and large tracts of undeveloped land. The site has frontage along Cactus Road, while access to Loop 303 is approximately 2.5 miles to the east via Cactus Road. Upon development, half street improvements will be required along Perryville Road. The site was acquired for an industrial oriented use. Sale Land - Industrial No. 4 Property Name Prescott Airport Industrial Lot 38 Address SW-SWC of Melville Road and Inter Cal Way Prescott, AZ 86301 County Yavapai Govt./Tax ID 102-03-055 Area Measurement(NRA) Land Area Net 1.110 ac/ 48,352 sf Land Area Gross N/A/ N/A Site Development Status Raw Utilities All available to site at time of sale Maximum FAR N/A Max Allow Bldg Units/Density N/A Min Land Bldg Ratio N/A Shape Irregular Primary Frontage 50 ft on Cirrus Road Secondary Frontage 140 ft on Melville Road Topography Generally Level Flood Zone Class Zone X (Unshaded) Flood Panel No./ Date 04025C1693H/ Mar 2018 Zoning IL, Industrial Light (Prescott) Entitlement Status None Proposed Use or Development Industrial Transaction Details Type Sale Primary Verification Listing Broker, CoStar Inc., and public records Interest Transferred Fee Simple Transaction Date 01/06/2024 Condition of Sale Typically motivated arm's-length transaction Recording Date 01/06/2024 Recorded Buyer Gregory James, Kris, and Gregory Shane Venhaus Sale Price $197,272 Buyer Type End User Financing Other(See Comments) Recorded Seller Investment Potential, L.L.C. Cash Equivalent $197,272 Marketing Time 55 Month(s) Capital Adjustment $0 Listing Broker Matthew Fish (480) 309-1089 % Interest Purchased 100% Doc # 2022-0025898 Adjusted Price $197,272 Adjusted Price / ac and / sf $177,723 / $4.08 Adjusted Price/ FAR N/A Adjusted Price/ Unit N/A Comments This comparable represents the sale of a 1.11-acre vacant site located between Cirrus Drive and Melville Road, within the Prescott Regional Airpark and Commerce Center, in Prescott, Arizona. The site is zoned IL, Industrial Light, by the city of Prescott. Surrounding land uses primarily include industrial oriented uses and other vacant lots within the Prescott Regional Airport. The site has frontage along Cirrus Drive, and Melville Road, while access to Arizona Route 89A is approximately two miles to the south via Larry Caldwell Road. No significant half street improvements will be required upon development. The site sold for $197,272 or $4.08 per square foot with a $49,318 down payment (25%) with the remainder carried by the seller. Given the amount of the down payment, the price is considered to be cash equivalent. Addenda Addendum B ENGAGEMENT LETTER Addenda Addendum C QUALIFICATIONS Thomas Raynak, MAI First Vice President, Phoenix, Arizona ̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶ Experience ̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶ Thomas Raynak, MAI, is a First Vice President with CBRE’s Valuation & Advisory Services. Thomas Raynak has experience with a broad spectrum of property types, but specializes in the valuation of vacant land, master planned communities, residential subdivisions (single-family, townhomes and condominiums), and apartments. He also provides review services to several lending institutions. He also has experience completing appraisals and consulting assignments on office and medical office buildings, retail properties, industrial properties, mobile home/RV parks, mini storage facilities, private/charter schools, restaurants, automotive facilities, and a variety of special use properties. Thomas Raynak has completed over 2,500 assignments throughout the state of Arizona. Additionally, he has extensive experience as a qualified expert in Federal Bankruptcy Court. As a member of the Appraisal Institute, he has held several positions including serving as a member of an experience review committee, a regional disciplinary panel, and as a mentor to candidates for membership. Thomas Raynak has been a partner in a private real estate development venture since 2007. Thomas Raynak works in the Western Region which covers the western portion of the United States. ̶̶̶̶̶̶ Professional Affiliations / Accreditations ̶̶̶̶̶̶ • Appraisal Institute, Designated Member (MAI) • Arizona Certified General Real Estate Appraiser, No 30413̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶ Education ̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶ • Master of Arts Degree, Geography (Land Use Analysis)̶ Arizona State University, Tempe, Arizona 1985 • Bachelor of Science Degree, Geography (Urban Planning)̶ Pennsylvania State University, University Park, Pennsylvania 1981 T + 602-735-1744 M + 602-516-8352 thomas.raynak@cbre.com 2575 East Camelback Road Suite 500 Phoenix, Arizona 85016 • Academy Bank • Alerus Financial • Axos Bank • AZ State Land Dept. • Bank of America • CIBC Bank • City of Phoenix • City of Mesa • Developers • Homebuilders • Farmers Merchant Bank • Fifth Third Bank • First Bank • First International Bank • HTLF Bank • M&T Bank • National Bank Of AZ • NY Community Bank • Parkway Bank & Trust • Talmer Bank & Trust • Town of Wickenburg • UMB Bank • Wells Fargo Bank • Western Alliance Bank Clients Represented ARIZONA FINANCIAL ENTERPRISE CREDENTIAL CERTIFICATE No: CGA-30413 THOMAS A. RAYNAK CREDENTIAL TYPE ISSUE DATE EFFECTIVE DATE EXPIRATION DATE This certificate was printed on August 26, 2024 and will remain in effect until a change request has been approved by the Department or the credential is surrendered, suspended, revoked or expired. Arizona Department of Insurance and Financial Institutions difi.az.gov 100 N 15th Ave, Suite 261 Phoenix, AZ 85007-2630 Certified General Appraiser September 04, 1991 October 01, 2024 September 30, 2026 Jo Jo Dance, MAI, CCIM Managing Director, Arizona ̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶ Experience ̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶ Jo Dance serves as Managing Director of CBRE Valuation & Advisory Services, West Division, where she leads a team of over 30 appraisal and consulting professionals in the Phoenix, Tucson, Albuquerque, Las Vegas and St. George offices. An accomplished 30+-year real estate professional with extensive industry and management experience, she leads CBRE’s efforts to provide exceptional outcomes for local, regional and global clients. Working alongside a dedicated team of specialized experts, she works to elevate CBRE’s best-in- class status by ensuring consistent, quality appraisal services. In her role as Managing Director, she coordinates all activities for Arizona, New Mexico, Las Vegas, Nevada and St. George, Utah including overseeing new business development, client relations and appraisal quality control production. She is licensed as a Certified General Appraiser in the states of Arizona, New Mexico and Nevada. Ms. Dance is a designated member of the Appraisal Institute (MAI and SRA) and holds a CCIM designation. Her appraisal experience spans a broad spectrum of real estate appraisals, rent analyses and market studies of commercial and multifamily residential properties. She has also provided litigation support and expert testimony in deposition and court in Arizona. ̶̶̶̶ Professional Affiliations / Accreditations ̶̶̶̶̶ • Appraisal Institute – Designated Member (MAI and SRA) • CCIM Institute – CCIM designation • Certified General Real Estate Appraiser, State of Arizona, No. 30249 • Certified General Real Estate Appraiser, State of New Mexico, No. 03242-G • Certified General Real Estate Appraiser, State of Nevada, No. No. A.0206799-CG • Licensed Real Estate Broker: State of Arizona (#BR505868000)̶̶̶̶̶̶̶̶̶̶̶̶̶̶̶ Education ̶̶̶̶̶̶̶̶̶̶̶̶̶̶ • Arizona State University̶ Science in Business Administration, Production & Operations Management T + 01 602-735-5686 M +01 602-361-6600 jo.dance@cbre.com 2575 East Camelback Road Suite 500 Phoenix, AZ 85016 Clients Represented • CBRE Capital Markets • Western Alliance Bank • Walker & Dunlop • MidFirst Bank • C-III Asset Management • Opus Bank • JLL • HFF • Bank of the West • National Bank of AZ • Bank of Oklahoma • BBVA Compass • PNC • Citibank • Washington Federal • Blackstone • StanCorp • A10 Capital • Starwood Capital • VEREIT, Inc. • CoBiz Bank • First Bank • East West Bank • Bank OZK ARIZONA FINANCIAL ENTERPRISE CREDENTIAL CERTIFICATE No: CGA-30249 JOLENE U. DANCE CREDENTIAL TYPE I SSUE DATE EFFECTI VE DATE EXPI RATI ON DATE This certificate was printed on August 2, 2024 and will remain in effect until a change request has been approved by the Department or the credential is surrendered, suspended, revoked or expired. Arizona Department of Insurance and Financial Institutions difi.az.gov 100 N 15th Ave, Suite 261 Phoenix, AZ 85007-2630 Certified General Appraiser Aug 15, 1991 Sep 1, 2024 Aug 31, 2026