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HomeMy WebLinkAbout2018 CON (DEED) Senter Family Trust - Purchase of 1430 Hoover AvenueRECORDING REQUESTED BY: Chicago Title Company When Recorded Mail Document and Tax Statement To: City of National City Attn: City Clerk 1243 National City Boulevard National City, CA 91950 DOC# 2018-0232152 IIIIIIIIIIII IIIIIIIIIIII IIIIIIII IIIIIIIIIIIIIIIIIIIIIIIVIII0I Jun 08, 2018 08:00 AM OFFICIAL RECORDS Ernest J. Dronenburg, Jr., SAN DIEGO COUNTY RECORDER FEES: $0.00 (SB2 Atkins: $0.00) PCOR: YES PAGES: 7 Escrow Order No.: 73718004959 APN/Parcel ID(s): 560-061-15 GRANT DEED The undersigned grantor(s) declare(s) SPACE ABOVE THIS LINE FOR RECORDER'S USE Q This transfer is exempt from the documentary transfer tax. Exempt Recording - Govt Code 6103 Transfer to a govenmental entity, R & T 11922 O The documentary transfer tax is $0.00 and is computed on: • the full value of the interest or property conveyed. O the full value less the liens or encumbrances remaining thereon at the time of sale. The property is located in Ei the City of National City. FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Edward W. Senter, Jr. and Pauline F. Senter, Trustees of the Senter Family Trust, dated October 16, 2000 hereby GRANT(S) to City of National City, a municipality the following described real property in the City of National City, County of San Diego, State of Califomia: For APN/Parcel ID(s): 560-061-15 Lots 13, 14, and 15 in Brock 79 of National City, in the City of National City, County of San Diego, State of California, according to Map thereof No. 348, filed in the Office of the County Recorder of San Diego County, October 2, 1882. Dated: June 6, 2018 IN WITNESS WHEREOF, the undersigned have executed this document on the date(s) set forth below. v• Ed ard}C1(. Sente , Jr., Trus ee of the Senter Family Trust, dated October 16, 2000 Pauline F. Senter, Trustee of the Senter Family Trust, dated October 16, 2000 Grant Deed Printed: 05.06.18 © 01:52 PM SCA0000129.doc / Updated: 11.20.17 CA-CT-FWDO-02180.055835-73718004959 RECORDING REQUESTED BY: Chicago Title Company When Recorded Mail Document and Tax Statement To: City of National City Attn: City Clerk 1243 National City Boulevard National City, CA 91950 THIS DOCUMENT HAS BEEN ELECTRONICALLY RECORDED. SEE THE ATTACHED COVER PAGE FOR RECORDING INFORMATION Escrow Order No.: 73718004959 APN/Parcel ID(s): 560-061-15 GRANT DEED The undersigned grantor(s) declare(s) SPACE ABOVE THIS LINE FOR RECORDER'S USE WI This transfer is exempt from the documentary transfer tax. Exempt Recording - Govt Code 6103 Transfer to a govenmental entity, R & T 11922 ❑ The documentary transfer tax is $0.00 and is computed on: 0 the full value of the interest or property conveyed. ❑ the full value less the liens or encumbrances remaining thereon at the time of sale. The property is located in I1 the City of National City. FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Edward W. Senter, Jr. and Pauline F. Senter, Trustees of the Senter Family Trust, dated October 16, 2000 hereby GRANT(S) to City of National City, a municipality the following described real property in the City of National City, County of San Diego, State of California: For APN/Parcel ID(s): 560-061-15 Lots 13, 14, and 15 in Block 79 of National City, in the City of National City, County of San Diego, State of California, according to Map thereof No. 348, filed in the Office of the County Recorder of San Diego County, October 2, 1882. Dated: June 6, 2018 IN WITNESS WHEREOF, the undersigned have executed this document on the date(s) set forth below. Ed and y1(. Sente , Jr., Trus ee of the Senter Family Trust, dated October 16, 2000 Pauline F. Senter, Trustee of the Senter Family Trust, dated October 16, 2000 Grant Deed Printed: 06.06.18 @ 01:52 PM SCA0000129.doc / Updated: 11.20.17 CA-CT-FW DO-02180.055835-73718004959 GRANT DEED (continued) APN/Parcel ID(s): 560-061-15 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of Cou of On'�., t3 before me, �'r ` �-�"'" � , Notary Public, (here insert na and ti - of the officer) v"� personally appeared L-) W�/. _Gl%i-z- , in/ �!%1.d[JK- F. c �'e-t— , who proved to me on the basis of satisfactory eviden o be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and c. - t. h. d :nd offi.,EI seal. Sign.t ,e (Seal) .A. BARONY FRY V a,'.y COMM. # 2210670 g V �,i;� "giR NOTARY PUBLIC • CALIFORNIA G) 2 �1!r� ' SAN DIEGO COUNTY 0 COMM. EXPIRES SEPT.15, 2021' Grant Deed Printed: 06.06.18 @ 01:52 PM SCA0000129.doc / Updated: 11.20.17 CA-CT-FWDO-02180.055835-73718004959 CERTIFICATE OF ACCEPTANCE This is to certify that the interest(s) in real property conveyed by this instrument to the City of National City are hereby accepted by the undersigned officer on behalf of the City of National City, pursuant to the authority conferred by City of National City Resolution No. 2018-85 adopted on May 15, 2018, and the grantee consents to the recordation thereof by its authorized officer. GRANTEE: City of National City By: Dated: June to , 2018 Leslie Deese, City Manager Approved as to Form: Angil P. Morris -Jones Roberto M. Contreras Deputy City Attorney A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document, to which this certificate is attached, and not the truthfulness, accuracy, or validity of the document. State of California County of San Diego On JP-- ( , 2018 before me, Angelita Palma, Notary Public (here insert name and title of the officer), personally appeared p u . _( who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature: An ft otary Public ANGELITA PALMA Commission No. 2215878 NOTARY PUBLIC - CALIFORNIA SAN DIEGO COUNTY Commission Expires October 25, 2021 w t.10• 00(?3,-SS- (Seal) RESOLUTION NO. 2018 — 85 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE CITY MANAGER TO EXECUTE THE STANDARD OFFER, AGREEMENT, AND ESCROW INSTRUCTIONS FOR THE PURCHASE OF REAL PROPERTY LOCATED AT 1430 HOOVER AVENUE IN NATIONAL CITY IN ORDER TO PROVIDE SECURE STORAGE FOR THE NATIONAL CITY POLICE DEPARTMENT AND OTHER DEPARTMENTS' OVERS IZED VEHICLES AND TRAILERS, FOR A TOTAL SALES PRICE OF $973,350 AND THE PAYMENT OF CLOSING COSTS NOT TO EXCEED $10,000, AND $100,000 FOR TENANT IMPROVEMENTS; AND AUTHORIZING THE ESTABLISHMENT OF A BUDGET APPROPRIATION IN THE AMOUNT OF $200,000 FROM AVAILABLE FUND BALANCE OF THE ASSET FORFEITURE FUND, AND $215,000 FROM AVAILABLE FUND BALANCE OF THE DEVELOPMENT IMPACT FEES FUND WHEREAS, as part of a pending relocation process, the National City Police Department ("NCPD") and the Public Works Department ("PW") need space to store vehicles and supplies that were previously stored at the Public Works Yard located at 2100 Hoover Avenue (the "locations"); and WHEREAS, the City demolished the facility at the location, conducted required environmental remediation, and sold the property to the National City Housing Authority for the development of a 201 unit affordable housing project known as WI-TOD or the Paradise Creek Affordable Housing Project; and WHEREAS, the NCPD has been actively searching for a location to securely store their Mobile Command Vehicle, SWAT armored vehicle and support vehicles, traffic radar trailers, DUI trailer, Crisis Negotiations trailer, surveillance van, and motorcycles; and WHEREAS, the real property ("Property") located at 1430 Hoover Avenue is 0.18 acres with a 6,400 square foot warehouse ("Warehouse") that is available for purchase; and WHEREAS, after an extensive search, the Warehouse was found to be ideal for NCPD's and PW's vehicle and equipment storage needs; and WHEREAS, City staff proposed to negotiate the purchase of the Property during a Closed Session Meeting of the City Council on April 17, 2018, and received direction to make an offer on the Property; and WHEREAS, the City procured an appraisal for the Property, which was appraised at $1,150,000; and WHEREAS, City staff negotiated a sales price of $973,350 and the payment of closing costs not to exceed $10,000; and WHEREAS, City staff negotiated $100,000 in needed tenant improvements, including modifications to make the Warehouse ADA compliant. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of National City hereby authorizes the City Manager or designee to execute a Purchase and Sale Agreement and any related escrow documents necessary to complete the purchase of the property located at 1430 Hoover Avenue in order to provide secure storage for Police Resolution No. 2018 — 85 Page Two Department and other departments' oversized vehicles and trailers, for a total sales price of $973,350, and the payment of closing costs not to exceed $10,000, and $100,000 for tenant improvements. Said Agreement is on file in the office of the City Clerk. BE IT FURTHER RESOLVED, that the City Council authorizes a budget appropriation of $200,000 from available fund balance of the Asset Forfeiture Fund and $215,000 from available fund balance of the Development Impact Fees Fund. PASSED and ADOPTED this 15th day of May, 2018. ATTEST: A Mi. ael R. D:IIa, ity Clerk APPROVED AS TO FORM: A gil -'ors- .ne Cit torney h Morrison,ayor Passed and adopted by the Council of the City of National City, California, on May 15, 2018 by the following vote, to -wit: Ayes: Councilmembers Cano, Mendivil, Morrison, Rios, Sotelo-Solis. Nays: None. Absent: None. Abstain: None. AUTHENTICATED BY: RON MORRISON Mayor of the City of National City, California MICHAEL R. DALLA City Clerk of the City of National City, California By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2018-85 of the City of National City, California, passed and adopted by the Council of said City on May 15, 2018. ill City Clerk of the City National City, California By: Deputy BOE-502-A (P1) REV. 13 (06-17) PRELIMINARY CHANGE OF OWNERSHIP REPORT To be completed by the transferee (buyer) prior to a transfer of subject property, in accordance with section 480.3 of the Revenue and Taxation Code. A Preliminary Change of Ownership Report must be filed with each conveyance in the County Recorder's office for the county where the property is located. FOR ASSESSOR'S USE ONLY ASSESSORS PARCEL NUMBER 560-061-15 SELLER/TRANSFEROR Edward W. Senter, Jr. and Pauline F. Senter, Trustees of the Senter Family Trust, dated October 16, 2000 BUYER'S DAYTIME TELEPHONE NUMBER (9) 336— 333 J BUYERS EMAIL ADDRESS STREET ADDRESS OR PHYSICAL LOCATION OF REAL PROPERTY 1430 Hoover Avenue, National City, CA 91950 ❑ YES NO ❑YES Pf NO This property is intended as my principal residence. If YES, please indicate the date of occupancy or intended occupancy. Are you a disabled veteran or an unmarried surviving spouse of a disabled veteran who was compensated at 100% by the Department of Veterans Affairs? MO DAY YEAR MAIL PROPERTY TAX INFORMATION TO (NAME) City of National City, a municipality MAIL PROPERTY TAX INFORMATION TO (ADDRESS) Attn: City Clerk, 1243 National City Boulevard PART 1. TRANSFER INFORMATION CITY National City Please complete all statements. STATE CA ZIP CODE 91950 This section contains possible exclusions from reassessment for certain types of transfers. YES NO ❑ A. This transfer is solely between spouses (addition or removal of a spouse, death of a spouse, divorce settlement, etc.). ❑ B. This transfer is solely between domestic partners currently registered with the California Secretary of State (addition or removal of a partner, death of a partner, termination .settlement, etc.). ❑ IT* C. This is a transfer: 0 between parent(s) and child(ren) 0 from grandparent(s) to grandchild(ren). o Er* D. This transfer is the result of a cotenant's death. Date of death o a. E. This transaction is to replace a principal residence by a person 55 years of age or older. Within the same county? 0 YES 0 NO ❑ Pf * F. This transaction is to replace a principal residence by a person who is severely disabled as defined by Revenue and Taxation Code section 69.5. Within the same county? 0 YES 0 NO ❑ H G. This transaction is only a correction of the name(s) of the person(s) holding title to the property (e.g., a name change upon marriage). If YES, please explain: ❑ Er H. The recorded document creates, terminates, or reconveys a lender's interest in the property. ❑ 0" I. This transaction is recorded only as a requirement for financing purposes or to create, terminate, or reconvey a security interest (e.g., cosigner). If YES, please explain: ❑ a J. The recorded document substitutes a trustee of a trust, mortgage, or other similar document. K. This is a transfer of property: ❑ B 1. to/from a revocable trust that may be revoked by the transferor and is for the benefit of O the transferor, and/or 0 the transferor's spouse ❑ registered domestic partner. ❑ a 2. to/from an irrevocable trust for the benefit of the ❑ creator/grantor/trustor and/or 0 grantor's/trustor's spouse 0 grantor's/trustor's registered domestic partner. ❑ Er L. This property is subject to a lease with a remaining lease term of 35 years or more including written options. ❑ H M. This is a transfer between parties in which proportional interests of the transferor(s) and transferee(s) in each and every parcel being transferred remain exactly the same after the transfer. ❑ Er N. This is a transfer subject to subsidized low-income housing requirements with governmentally imposed restrictions, or restrictions imposed by specified nonprofit corporations. ❑ 0 * O. This transfer is to the first purchaser of a new building containing an active solar energy system. ❑ 0 P. Other. This transfer is to * Please refer to the instructions for Part 1. Please provide any other information that will help the Assessor understand the nature of the transfer. THIS DOCUMENT IS NOT SUBJECT TO PUBLIC INSPECTION Preliminary Change of Ownership (PCOR) Printed: 06.06.18 @ 01:42 PM SCA0000251.doc / Updated: 12.28.17 Page 1 CA-CT-FWDO-02180.055835-73718004959 BOE-502-A (P2) REV. 13 (06-17) PART 2. OTHER TRANSFER INFORMATION A. Date of transfer, if other than recording date: B. Type of transfer: Purchase ❑ Foreclosure ❑ Gift ❑ Trade or exchange 0 Contract of sale. Date of contract: ❑ Sale/leaseback 0 Creation of a lease 0 Assignment of a lease Original term in years (including written options): ❑ Other. Please explain: Check and complete as applicable. ❑ Merger, stock, or partnership acquisition (Form BOE-100-B) 0 Inheritance. Date of death: 0 Termination of a lease. Date lease began: Remaining term in years (including written options): C. Only a partial interest in the property was transferred. ❑ YES EyJ NO If YES, indicate the percentage transferred: PART 3. PURCHASE PRICE AND TERMS OF SALE Check and complete as applicable. A. Total purchase price. B. C. First deed of trust © % interest for ❑ FHA ( Discount Points) 0 Cal -Vet ❑ Bank/Savings & Loan/Credit Union ❑ Balloon payment $ $ 945,000.00 Cash down payment or value of trade or exchange excluding closing costs Amount $ years. Monthly payment $ Amount $ 0 VA ( Discount Points) 0 Fixed rate 0 Variable rate ❑ Loan carried by seller Due date: D. Second deed of trust © % interest for years. Monthly payment $ ❑ Fixed rate 0 Variable rate 0 Bank/Savings & Loan/Credit Union 0 Loan carried by seller ❑ Balloon payment $ Due date: Amount $ E. Was an Improvement Bond or other public financing assumed by the buyer? ❑ YES 0 NO Outstanding balance $ F. Amount, if any, of real estate commission fees paid by the buyer which are not included in the purchase price $ G. The property was purchased: 0 Through real estate broker. Broker name: Phone number: ( ) ❑ Direct from seller 0 From a family member -Relationship ❑ Other. Please explain: H. Please explain any special terms, seller concessions, broker/agent fees waived, financing, and any other information (e.g., buyer assumed the existing loan balance) that would assist the Assessor in the valuation of your property. PART 4. PROPERTY INFORMATION A. Type of property transferred ❑ Single-family residence 0 Multiple -family residence. Number of units: ❑ Other. Description: (i.e., timber, mineral, water rights, etc.) B. Check and complete as applicable. ❑ Co-op/Own-your-own ❑ Condominium 0 Timeshare ❑ Manufactured home ❑ Unimproved lot $Commercial/Industrial ❑ YES 'NO Personal/business property, or incentives, provided by seller to buyer are included in the purchase price. Examples of personal property are furniture, farm equipment, machinery, etc. Examples of incentives are club memberships, etc. Attach list if available. If YES, enter the value of the personal/business property: $ Incentives $ C. 0 YES 13-NO A manufactured home is included in the purchase price. If YES, enter the value attributed to the manufactured home: $ 0 YES ❑ NO The manufactured home is subject to local property tax. If NO, enter decal number: D. 0 YES trNO The property produces rental or other income. If YES, the income is from: 0 Lease/rent ❑ Contract 0 Mineral rights 0 Other: E. The condition of the property at the time of sale was: Er Good 0 Average 0 Fair ❑ Poor Please describe: CERTIFICATION I certify (or declare) that the foregoing and all information hereon, including any accompanying statements or documents, is true and correct to the best of my knowledge and belief. SIGNATURE OF BUYER/TRANSFEREE OR CORPORATE OFFICER NAME OF BUYER/TRANSFEREE/PERSONAL REPRESENTATIVE/CORPORATE OFFICER (PLEASE PRINT) TITLE DATE c� /-7 l Pi TELEPHONE EMAIL ADDRESS T.PS1 l P fPPSP i, Manager The Assessor's office may contact you for additional information regarding this transaction. Preliminary Change of Ownership (PCOR) Printed: 06.06.18 @ 01:42 PM SCA0000251.doc / Updated: 12.28.17 Page 2 CA-CT-FWDO-02180.055835-73718004959 AI RCREi STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE (Non -Residential) Dated: April 19, 2018 1. Buyer. 1.1 The City of National City or Assignee ,("Buyer")hereby offers to purchase the real property, hereinafter described, from the owner thereof ("Seller") (collectively, the "Parties" or individually, a "Party"), through an escrow ("Escrow") to close 30.or 10 days after the waiver or expiration of the Buyer's Contingencies, ("Expected Closing Date") to be held by Chicago Title Company ("Escrow Holder")whose address is 2365 Northside Drive, #600, San Diego. CA 92108 ,Phone No. (619) 209-3485 ,Facsimile No. (619) 2 0 9— 3 4 8 9 upon the terms and conditions set forth in this agreement ("Agreement"). Buyer shall have the right to assign Buyer's rights hereunder, but any such assignment shall not relieve Buyer of Buyer's obligations herein unless Seller expressly releases Buyer. 1.2 The term "Date of Agreement" as used herein shall be the date when by execution and delivery (as defined in paragraph 20.2) of this document or a subsequent counteroffer thereto, Buyer and Seller have reached agreement in writing whereby Seller agrees to sell, and Buyer agrees to purchase, the Property upon terms accepted by both Parties. 2. Property. 2.1 The real property ("Property") that is the subject of this offer consists of (insert a brief physical description) an approximate 6,400 square foot warehouse situated on a .18 AC lot is located in the County of San Diego ,iscommonlyknownas (street address, city, state, zip) 1430 Hoover Avenue, National City, CA 91950 and is legally described as: to be followed through escrow (APN: 560-061-15 ). 2.2 If the legal description of the Property is not complete or is inaccurate, this Agreement shall not be invalid and the legal description shall be completed or corrected to meet the requirements of Chicago Title ("Title Company"), which shall issue the title policy hereinafter described. 2.3 The Property includes, at no additional cost to Buyer, the permanent improvements thereon, including those items which pursuant to applicable law are a part of the property, as well as the following items, if any, owned by Seller and at present located on the Property: electrical distribution systems (power panel, bus ducting, conduits, disconnects, lighting fixtures); telephone distribution systems (lines, jacks and connections only); space heaters; heating, ventilating, air condltibnlhg equipment ("HVAC"); air lines; fire sprinkler systems; security and fire detection systems; carpets; window coverings; wall coverings; and (collectively, the "Improvements"). 2.4 The fire sprinkler monitor: ❑ is owned by Seller and included in the Purchase Price, ❑ is leased by Seller, and Buyer will need to negotiate a new lease with the fire monitoring company, ❑ ownership will be determined during Escrow, or Q there is no fire sprinkler monitor. 2.5 Except as provided In Paragraph 2.3, the Purchase Price does not include Seller's personal property, furniture and furnishings, and all of which shall be removed by Seller prior to Closing. 3. Purchase Price. 3.1 The purchase price ("Purchase Prke") to be paid by Buyer to Seller for the Property shall be $ 9 4 5 , 0 0 0 , payable as follows: (Strike any not applicable) (a) Cash down payment, including the Deposit as defined in paragraph 4.3 (or if an all cash transaction, the Purchase Price): $945.000 (11) Aenn..n• ,.f "Ida.., 1,..^".. AeRe^A:., p„-mg.aph c t, if.ny. (r) a..ye..k.all •.l,e N•II .,. •he ar,epprty .Uh)p.• to an,vnr rise fnllnwino a .rtin8 Aap,l of era .6• ("g i.1g gm...44e) of 41) A^ C..I.N..g un n ("LIe.* Mean") with an ..np�:A pr:n.ip.l k.l.e.n ac of •he rin<:^g .,r .mpprnvhn•.•ely Total Purchase Price: % per annum $945,000 3.2 If Buyer is taking title to the Property subject to, or assuming, an Existing Deed of Trust and such deed of trust permits the beneficiary to demand payment of fees including, but not limited to, points, processing fees, and appraisal fees as a condition to the transfer of the Property, Buyer agrees to pay such fees up to a maximum of 1.5% of the unpaid principal balance of the applicable Existing Note. 4. Deposits. 4.1 L. Buyer has delivered to Broker a check in the sum of , payable to Escrow Holder, to be delivered by Broker to Escrow Holder within 2 or business days after both Parties have executed this Agreement and the executed Agreement has been delivered to Escrow Holder, or within 2 or business days after both Parties have executed this Agreement and the executed Agreement has been delivered to Escrow Holder Buyer shall deliver to Escrow Holder a check in the sum of S30,000 . If said check is not received by Escrow Holder within said time period then Seller may elect to unilaterally terminate this transaction by giving written notice of such election to Escrow Holder whereupon neither Party shall have any further liability to the other under this Agreement. Should Buyer and Seller not enter into an agreement for purchase and sale, Buyer's check or funds shall, upon request by Buyer, be promptly returned to Buyer. d 3 'v d•ti^ral 'tap^<k"• t, guy., chau Anpor:twleh C.rrn.., L1n1A,r ekn ady:ponml ii,... of «o by .ppnnA to thn Farrow W Ida. e^tb:p • se 0-no p ' oy pro xd.d tl1n^ sener'p'y ^citify m..yo,, a^d 4.3 Escrow Holder shall deposit the funds deposited with it by Buyer pursuant to paragraphs 4.1 and 4.2 (collectively the "Deposit"), in a State or Federally chartered bank in an interest bearing account whose term is appropriate and consistent with the timing requirements of this transaction. The interest therefrom shall accrue to the benefit of Buyer, who hereby acknowledges that there may be penalties or interest forfeitures if the applicable instrument is redeemed prior to its sp maturity. Buyer's Federal Tax Identification Number is . NOTE: Such interest bearing account cannot be opened until Buyer's Federal Tax Page 1 of 8 Last Edited: 5/2/2018 4:48 PM INITIALS IMTIA © 2017 AIR CRE. All Rights Reserved. OFA-20.00, Revised 01-03-2017 Identification Number is provided of coil .nr,ni� to call a= aril Car in,,nrnndant c....r rLarot.nn inc [allot ' a il,..tin. of Chic eg,aaa'ar t and lftp granting ..r the ',anti On •y pry irincl $i.nfl;wlnrancl.nt .nneiAerati..n ie grip rnf..nA,hle t.. Mayer hoot c hall M.rnAit A to tit. D,,rch'ea Drina kt the ..cant tint the p, ,r.k,•.. of the pr„rarly ;e ciaropletod. breacho^nthea"aottl'attheporno',i"tmirm.n'1Qdpn.Gunn.tpthepr0uirigncofo,ragraphoI(n)(nactn,,,;,..pa.n,p rl r )n 0 )) to Irh gg) C.a..- •hap ha, r Aar from, —,.girt of the ccarpa.it.,.mi,.t emitting f..wh the rnarr.c-A terrr.c of the l non .., ,pprn.,g o' d"nj'pro••e of grim p,of'or`d e If call f,tic to p,,tlfy corn.., unwat in writing f,f the Air,rrrn"al within calA T Aar :t than h. cnnrh.ci..mil prac.unnel that Callan hoc ,rprn..arl the tmir,nc..f,rfigyigw1,o,aa, C'J M..y,lr harehy'acne• to Ai"Qently Para ..htaining thn u.....1 non Ifm.m,hall fall to nnt:fy:trD"4'e,E`cw•aaeld^• and come., in WAti'g w'th61 51 1f akar dna rliligpnrp;boyar [hall notify itc Rrra,pt Fcrrnw Hnldar anti Soliar in writing. within 1ha hmp crnrifipd in paragraph 5 7 horned that Rltyar ha, 6 What pr.atcieg (Dur.ha•e looney [iota) (St' -'-'Jon "rr'' hi 61 If IlipeF,aa-Yl,Wifb prtncip,l and;nterect ryid a= follows- ..rch,sa rv,n,.miy nmimid of rr.,rt than ha ran the c„r,mint fn..nc r n•m'enty ....A by Fornw unld.5 anA k. junior n..A p.hnrAin,tn only to eh,. Fvictin0 unm(.),nA/o, the Naw igar. g.rrgrrly ..timid for bythic Agrowno. t F 7 Th. D..cehorn eMn.. biota and/or 1hn D..rchnc. agony need of Tr..rt chat' contain rrn.ee.nnc regarding thafnun,..ing (e ale -fa paragraph to a (h))• 4.) orapnymnnt Drinr;pai ,nay ha rrapaiel in whnlmi nr in ra ,t any tiro. wifhn,.t canopy. ,t !ha actin of thmi 01,y. 4)4 tnt.lhnr.J. 4latn chars. of G. [hall Iva p,yahlmi with corn.-t to any poi/m.nt of p,i.arip,l, torn•'"; o• oche• c6a•06S "at'• admi within In dray[ af'gr it icdlw. (c) Due On care iR the --ant tYmi Buy., coot o• trancfe•= Otte to the .rooerty or apy portion thmirmint, :bran the Seen. nvy, ,• S.uar•r nrtina, enU'a "ppaid babnca of raid muse to ha rail in f„u en ranch .,.,.rteaga ar Aged os te,,t .o wh;eh it anal be cabr.rdinalg iD 1 cQ•c col c ocugnv is To cnpertncc no, TUC Do013cp7v 6 c Sall .' obligation to rro.dAg financing it c,.,sngent .coon Sella t rg,con'bie arpro.,ai of g„yore financial eondipgn Mayor to pro.,id. a [.scent financial_ far...inata that !concoction n, to rnrthatg flag Drnpa.ty witting financing If gnyar fails to notify [Den, tl,.lAar within [aid .:rang paincl of itc glactinn 1n_ 7. Real Estate Brokers. 7.1 The following real estate broker(s) ("Brokers") and brokerage relationships exist in this transaction and are consented to by the Parties (check the applicable boxes): L represents Seller exclusively ("Seller's Broker"); represents Buyer exclusively ("Buyer's Broker"); or 2 Colliers International of CA, Inc. represents both Seller and Buyer ("Dual Agency"). The Parties acknowledge that other than the Brokers listed above, there are no other brokers representing the Parties or due any fees and/or commissions under this Agreement. See paragraph 24 regarding the nature of a real estate agency relationship. Buyer shall use the services of Buyer's Broker exclusively in connection with any and all negotiations and offers with respect to the Property for a period of 1 year from the date inserted for reference purposes at the top of page 1. 7.2 Buyer and Seller each represent and warrant to the other that he/she/it has had no dealings with any person, firm, broker or finder in connection with the negotiation of this Agreement and/or the consummation of the purchase and sale contemplated herein, other than the Brokers named in paragraph 7.1, and no broker or other person, firm or entity, other than said Brokers is/are entitled to any commission or finder's fee in connection with this transaction as the result of any dealings or acts of such Party. Buyer and Seller do each hereby agree to indemnify, defend, protect and hold the other harmless from and against any costs, expenses or liability for compensation, commission or charges which may be claimed by any broker, finder or other similar party, other than said named Brokers by reason of any dealings or act of the indemnifying Party. 8. Escrow and Closing. 8.1 Upon acceptance hereof by Seller, this Agreement, including any counteroffers incorporated herein by the Parties, shall constitute not only the agreement of purchase and sale between Buyer and Seller, but also instructions to Escrow Holder for the consummation of the Agreement through the Escrow. Escrow Holder shall not prepare any further escrow instructions restating or amending the Agreement unless specifically so instructed by the Parties or a Broker herein. Subject to the reasonable approval of the Parties, Escrow Holder may, however, include its standard general escrow provisions. In the event that there is any conflict between the provisions of the Agreement and the provisions of any additional escrow instructions the provisions of the Agreement shall prevail as to the Parties and the Escrow Holder. 8.2 As soon as practical after the receipt of this Agreement and any relevant counteroffers, Escrow Holder shall ascertain the Date of Agreement as defined In paragraphs 1.2 and 20.2 and advise the Parties and Brokers, in writing, of the date ascertained. 8.3 Escrow Holder is hereby authorized and Instructed to conduct the Escrow in accordance with this Agreement, applicable law and custom and practice of the community in which Escrow Holder is located, including any reporting requirements of the Internal Revenue Code. In the event of a conflict between the law of the state where the Property is located and the law of the state where the Escrow Holder is located, the law of the state where the Property is located shall prevail. 8.4 Subject to satisfaction of the contingencies herein described, Escrow Holder shall close this escrow (the "Closing") by recording a general warranty deed (a grant deed in California) and the other documents required to be recorded, and by disbursing the funds and documents in accordance with this Agreement. 8.5 Buyer and Seller shall each pay one-half of the Escrow Holder's charges and Seller shall pay the usual recording fees and any required documentary transfer taxes. Seller shall pay the premium for a standard coverage owner's or joint protection policy of title insurance. (See also paragraph 11.) 8.6 Escrow Holder shall verify that all of Buyer's contingencies have been satisfied or waived prior to Closing. The matters contained in paragraphs 9.1 subparagraphs (b), (c), (d), (e), (g), (i), (n), and (o), 9.4, 12,13, 14, 16, 18, 20, 21, 22, and 24 are, however, matters of agreement between the Parties only and are not instructions to Escrow Holder. 8.7 If this transaction Is terminated for non -satisfaction and non -waiver of a Buyer's Contingency, as defined in paragraph 9.2, then neither of the Parties shall thereafter have any liability to the other under this Agreement, except to the extent of a breach of any affirmative covenant or warranty in this Agreement. In the event of such termination, Buyer shall, subject to the provisions of paragraph 8.10, be promptly refunded all funds deposited by Buyer with Escrow Holder, less only the $100 provided for in paragraph 4.4 and the Title Company and Escrow Holder cancellation fees and costs, all of which shall be Buyer's obligation. If this transaction is terminated as a result of Seller's breach of this Agreement then Seller shall pay the Title Company and Escrow Holder cancellation fees and costs. 8.8 The Closing shall occur on the Expected Closing Date, or as soon thereafter as the Escrow is in condition for Closing; provided, however, that if the Closing does not occur by the Expected Closing Date and said Date is not extended by mutual instructions of the Parties, a Party not then in default under this Agreement may notify the other Party, Escrow Holder, and Brokers, in writing that, unless the Closing occurs within 5 business days following said notice, the Escrow shall be deemed terminated without further notice or instructions. : Except as otherwise provided herein, the termination of Escrow shall not relieve or release either Party from any obligation to pay Escrow Holder's fees and C±��\ �� Page 2of8 INITIALS Last Edited: 5/2/2018 4:48 PM I ITIALS © 2017 AIR CRE. All Rights Reserved. OFA-20.00, Revised 01-03-2017 costs or constitute a waiver, release or discharge of any breach or default that has occurred in the performance of the obligations, agreements, covenants or warranties contained therein. 8.10 If this sale of the Property Is not consummated for any reason other than Seller's breach or default, then at Seller's request, and as a condition to any obligation to return Buyer's deposit (see paragraph 21), Buyer shall within 5 days after written request deliver to Seller, at no charge, copies of all surveys, engineering studies, soil reports, maps, master plans, feasibility studies and other similar items prepared by or for Buyer that pertain to the Property. Provided, however, that Buyer shall not be required to deliver any such report if the written contract which Buyer entered into with the consultant who prepared such report specifically forbids the dissemination of the report to others. 9. Contingencies to Closing. 9.1 The Closing of this transaction is contingent upon the satisfaction or waiver of the following contingencies. IF BUYER FAILS TO NOTIFY ESCROW HOLDER, IN WRITING, OF THE DISAPPROVAL OF ANY OF SAID CONTINGENCIES WITHIN THE TIME SPECIFIED THEREIN, IT SHALL BE CONCLUSIVELY PRESUMED THAT BUYER HAS APPROVED SUCH ITEM, MATTER OR DOCUMENT. Buyer's conditional approval shall constitute disapproval, unless provision is made by the Seller within the time specified therefore by the Buyer in such conditional approval or by this Agreement, whichever is later, for the satisfaction of the condition imposed by the Buyer. Escrow Holder shall promptly provide all Parties with copies of any written disapproval or conditional approval which it receives. With regard to subparagraphs (a) through (m) the pre-printed time periods shall control unless a different number of days is inserted in the spaces provided. (a) Disclosure. Seller shall make to Buyer, through Escrow, all of the applicable disclosures required by law (See AIR CRE ("AIR") standard form entitled "Seller's Mandatory Disclosure Statement") and provide Buyer with a completed Property Information Sheet ("Property Information Sheet") concerning the Property, duly executed by or on behalf of Seller in the current form or equivalent to that published by the AIR within 10 or- days following the Date of Agreement. Buyer has 10 days from the receipt of said disclosures to approve or disapprove the matters disclosed. (b) Physical Inspection. Buyer has au-ear3 0 days following the receipt of the Property Information Sheet or the Date of Agreement, whichever is later, to satisfy Itself with regard to the physical aspects and size of the Property. (c) Hazardous Substance Conditions Report. Buyer has 30 ox days following the receipt of the Property Information Sheet or the Date of Agreement, whichever is later, to satisfy itself with regard to the environmental aspects of the Property. Seller recommends that Buyer obtain a Hazardous Substance Conditions Report concerning the Property and relevant adjoining properties. Any such report shall be paid for by Buyer. A "Hazardous Substance" for purposes of this Agreement is defined as any substance whose nature and/or quantity of existence, use, manufacture, disposal or effect, render it subject to Federal, state or local regulation, investigation, remediatlon or removal as potentially injurious to public health or welfare. A "Hazardous Substance Condition" for purposes of this Agreement is defined as the existence on, under or relevantly adjacent to the Property of a Hazardous Substance that would require remediation and/or removal under applicable Federal, state or local law. (d) Soil Inspection. Buyer has 30 oc days from the receipt of the Property Information Sheet or the Date of Agreement, whichever Is later, to satisfy itself with regard to the condition of the soils on the Property. Seller recommends that Buyer obtain a soil test report. Any such report shall be paid for by Buyer. Seller shall provide Buyer copies of any soils report that Seller may have within 10 days following the Date of Agreement. (e) Governmental Approvals. Buyer has 30 cc days following the Date of Agreement to satisfy itself with regard to approvals and permits from governmental agencies or departments which have or may have jurisdiction over the Property and which Buyer deems necessary or desirable in connection with its intended use of the Property, including, but not limited to, permits and approvals required with respect to zoning, planning, building and safety, fire, police, handicapped and Americans with Disabilities Act requirements, transportation and environmental matters. (f) Conditions of Title. Escrow Holder shall cause a current commitment for title Insurance ("Title Commitment") concerning the Property issued by the Title Company, as well as legible copies of all documents referred to in the Title Commitment ("Underlying Documents"), and a scaled and dimensioned plot showing Ithe location of any easements to be delivered to Buyer within 10 or days following the Date of Agreement. Buyer has 10 days from the receipt of the Title Commitment, the Underlying Documents and the plot plan to satisfy itself with regard to the condition of title. The disapproval by Buyer of any monetary encumbrance, which by the terms of this Agreement is not to remain against the Property after the Closing, shall not be considered a failure of this contingency, as Seller shall have the obligation, at Seller's expense, to satisfy and remove such disapproved monetary encumbrance at or before the Closing. (g) Survey. Buyer has 30 au. days following the receipt of the Title Commitment and Underlying Documents to satisfy itself with regard to any ALTA title supplement based upon a survey prepared to American Land Title Association ("ALTA") standards for an owners policy by a licensed surveyor, showing the legal description and boundary lines of the Property, any easements of record, and any improvements, poles, structures and things located within 10 feet of either side of the Property boundary lines. Any such survey shall be prepared at Buyer's direction and expense. If Buyer has obtained a survey and approved the ALTA title supplement, Buyer may elect within the period allowed for Buyer's approval of a survey to have an ALTA extended coverage owner's form of title policy, in which event Buyer shall pay any additional premium attributable thereto. (h) Existing Leases and Tenancy Statements. Seller shall within 10 of days following the Date of Agreement provide both Buyer and Escrow Holder with legible copies of all leases, subleases or rental arrangements (collectively, "Existing Leases") affecting the Property, and with a tenancy statement ("Estoppel Certificate") in the latest form or equivalent to that published by the AIR, executed by Seller and/or each tenant and subtenant of the Property. Seller shall use its best efforts to have each tenant complete and execute an Estoppel Certificate. If any tenant fails or refuses to provide an Estoppel Certificate then Seller shall complete and execute an Estoppel Certificate for that tenancy. Buyer has 10 days from the receipt of said Existing Leases and Estoppel Certificates to satisfy itself with regard to the Existing Leases and any other tenancy issues. (i) Owner's Association. Seller shall within 10az days following the Date of Agreement provide Buyer with a statement andtransfer package from any owner's association servicing the Property. Such transfer package shall at a minimum include: copies of the association's bylaws, articles of incorporation, current budget and financial statement. Buyer has 10 days from the receipt of such documents to satisfy itself with regard to the association. u) Other Agreements. Seller shall within 10 oe days following the Date of Agreement provide Buyer with legible copies of all other agreements ("Other Agreements") known to Seller that will affect the Property after Closing. Buyer has 10 days from the receipt of said Other Agreements to satisfy itself with regard to such Agreements. (k) Financing. If paragraph 5 hereof dealing with a financing contingency has not been stricken, the satisfaction or waiver of such New Loan contingency. (I) F»'.'J la..mr If p,r9.-.pl. t(n-)hac,v.thvj.tr.:r4y, 5a11a. that...:thin 20 or aRY'u^t of tbo u^p„d p•:• c. I h'ia^C^ tha C'vent:ntOm.t r,te and tf.p dais m ..,h,.h:nfera.f iv paint and (]) the nand mmn„nf 9f my imp,.undr 11,1,1 by fhn �n.nn�:on..,,th ..,rh:aan .8.,yer ha..0or +,yr f^un..,,ne.f.e rere,C. nf.he l,,,n Oncfvw^t' and ea^af;c a y S.ate^.o^t, .o ra.;cfy ,.neu yvirh .nB,rd t^ r.An,nc:n0 g„ye. t d.uga,:en fn GIn're :. Gond:t;n.n.^d .,f...n o„y... fining ,f.ln .n p"r.h,.a fhe arof.erry ,rifhnut arr^y.r,r+^n ... rh,nn .n th^ terra. W�c to ra—y back a ourcb-re Moray votcthe^ Solbr than •••Rhin f 0 or I t,.pt Of d..r"...nntr (m) Personal Property. In the event that any personal property is included in the Purchase Price, Buyer has 10 oc days following the Date of Agreement to satisfy itself with regard to the title condition of such personal property. Seller recommends that Buyer obtain a UCC-1 report. Any such report shall be paid for by Buyer. Seller shall provide Buyer copies of any liens or encumbrances affecting such personal property that it is aware of within 10 oc days following the Date of Agreement. (n) Destruction, Damage or Loss. Subsequent to the Date of Agreement and prior to Closing there shall not have occurred a destruction of, or damage or loss to, the Property or any portion thereof, from any cause whatsoever, which would cost more than $10,000.00 to repair or cure. If the cost of repair or cure is $10,000.00 or less, Seller shall repair or cure the loss prior to the Closing. Buyer shall have the option, within 10 days after receipt of written notice of a loss costing more than $10,000.00 to repair or cure, to either terminate this Agreement or to purchase the Property notwithstanding such loss, but without deduction or offset against the Purchase Price. If the cost to repair or cure Is more than $10,000.00, and Buyer does not elect to terminate this Agreement, Buyer shall be entitled to any insurance proceeds applicable to such loss. Unless otherwise notified in writing, Escrow Holder shall assume no such destruction, damage or loss has occurred prior to Closing. (o) Material Change. Buyer shall have 10 days following receipt of written notice of a Material Change within which to satisfy Itself with regard to such change. "Material Change" shall mean a substantial adverse change in the use, occupancy, tenants, title, or condition of the Property that occurs after the date of this offer and prior to the Closing. Unless otherwise notified in writing, Escrow Holder shall assume that no Material Change has occurred prior to the Closing. (p) Seller Performance. The delivery of all documents and the due performance by Seller of each and every undertaking and agreement to be performed by Seller under this Agreement. (q) Brokerage Fee. Payment at the Closing of such brokerage fee as is specified in this Agreement or later written instructions to Escrow Holder executed by Seller and Brokers ("Brokerage Fee"). It is agreed by the Parties and Escrow Holder that Brokers are a third party beneficiary of this Agreement Insofar as the d-yt from thn Page 3 of 8 INITIALS Last Edited: 5/2/2018 4:48 PM INItIALS © 2017 AIR CRE. All Rights Reserved. OFA-20.00, Revised 01-03-2017 Brokerage Fee is concerned, and that no change shall be made with respect to the payment of the Brokerage Fee specified in this Agreement, without the written consent of Brokers. 9.2 All of the contingencies specified in subparagraphs (a) through (m) of paragraph 9.1 are for the benefit of, and may be waived by, Buyer, and may be elsewhere herein referred to as "Buyer's Contingencies." 9.3 If any of Buyer's Contingencies or any other matter subject to Buyer's approval Is disapproved as provided for herein in a timely manner ("Disapproved Item"), Seller shall have the right within 10 days following the receipt of notice of Buyer's disapproval to elect to cure such Disapproved Item prior to the Expected Closing Date ("Seller's Election"). Seller's failure to give to Buyer within such period, written notice of Seller's commitment to cure such Disapproved Item on or before the Expected Closing Date shall be conclusively presumed to be Seller's Election not to cure such Disapproved Item. If Seller elects, either by written notice or failure to give written notice, not to cure a Disapproved Item, Buyer shall have the right, within 10 days after Seller's Election to either accept title to the Property subject to such Disapproved Item, or to terminate this Agreement. Buyer's failure to notify Seller in writing of Buyer's election to accept title to the Property subject to the Disapproved Item without deduction or offset shall constitute Buyer's election to terminate this Agreement. The above time periods only apply once for each Disapproved Item. Unless expressly provided otherwise herein, Seller's right to cure shall not apply to the remediation of Hazardous Substance Conditions or to the Financing Contingency. Unless the Parties mutually instruct otherwise, if the time periods for the satisfaction of contingencies or for Seller's and Buyer's elections would expire on a date after the Expected Closing Date, the Expected Closing Date shall be deemed extended for 3 business days following the expiration of: (a) the applicable contingency period(s), (b) the period within which the Seller may elect to cure the Disapproved Item, or (c) if Seller elects not to cure, the period within which Buyer may elect to proceed with this transaction, whichever is later. 9.4 The Parties acknowledge that extensive local, state and Federal legislation establish broad liability upon owners and/or users of real property for the investigation and remediation of Hazardous Substances. The determination of the existence of a Hazardous Substance Condition and the evaluation of the impact of such a condition are highly technical and beyond the expertise of Brokers. The Parties acknowledge that they have been advised by Brokers to consult their own technical and legal experts with respect to the possible presence of Hazardous Substances on the Property or adjoining properties, and Buyer and Seller are not relying upon any investigation by or statement of Brokers with respect thereto. The Parties hereby assume all responsibility for the Impact of such Hazardous Substances upon their respective interests herein. 10. Documents Required at or Before Closing. 10.1 Five days prior to the Closing date Escrow Holder shall obtain an updated Title Commitment concerning the Property from the Title Company and provide copies thereof to each of the Parties. 10.2 Seller shall deliver to Escrow Holder in time for delivery to Buyer at the Closing: (a) Grant or general warranty deed, duly executed and In recordable form, conveying fee title to the Property to Buyer. (b) If applicable, the Beneficiary Statements concerning Existing Note(s). (c) If applicable, the Existing Leases and Other Agreements together with duly executed assignments thereof by Seller and Buyer. The assignment of Existing Leases shall be on the most recent Assignment and Assumption of Lessor's Interest in Lease form published by the AIR or its equivalent. (d) If applicable, Estoppel Certificates executed by Seller and/or the tenant(s) of the Property. (e) An affidavit executed by Seller to the effect that Seller is not a "foreign person" within the meaning of Internal Revenue Code Section 1445 or successor statutes. If Seller does not provide such affidavit in form reasonably satisfactory to Buyer at least 3 business days prior to the posing, Escrow Holder shall at the Closing deduct from Seller's proceeds and remit to the Internal Revenue Service such sum as is required by applicable Federal law with respect to purchases from foreign sellers. (f) If the Property is located in California, an affidavit executed by Seller to the effect that Seller is not a "nonresident" within the meaning of California Revenue and Tax Code Section 18662 or successor statutes. If Seller does not provide such affidavit in form reasonably satisfactory to Buyer at least 3 business days prior to the Closing, Escrow Holder shall at the Closing deduct from Seller's proceeds and remit to the Franchise Tax Board such sum as is required by such statute. (g) If applicable, a bill of sale, duly executed, conveying title to any included personal property to Buyer. (h) If the Seller is a corporation, a duly executed corporate resolution authorizing the execution of this Agreement and the sale of the Property. 10.3 Buyer shall deliver to Seller through Escrow: (a) The cash portion of the Purchase Price and such additional sums as are required of Buyer under this Agreement shall be deposited by Buyer with Escrow Holder, by federal funds wire transfer, or any other method acceptable to Escrow Holder in immediately collectable funds, no later than 2:00 P.M. on the business day prior to the Expected Closing Date provided, however, that Buyer shall not be required to deposit such monies into Escrow if at the time set for the deposit of such monies Seller Is in default or has indicated that it will not perform any of its obligations hereunder. Instead, In such circumstances in order to reserve its rights to proceed Buyer need only provide Escrow with evidence establishing that the required monies were available. (b) If a Purchase Money Note and Purchase Money Deed of Trust are called for by this Agreement, the duly executed originals of those documents, the Purchase Money Deed of Trust being in recordable form, together with evidence of fire insurance on the improvements in the amount of the full replacement cost naming Seller as a mortgage loss payee, and a real estate tax service contract (at Buyer's expense), assuring Seller of notice of the status of payment of real property taxes during the life of the Purchase Money Note. (c) The Assignment and Assumption of Lessor's Interest in Lease form specified in paragraph 10.2(c) above, duly executed by Buyer. (d) Assumptions duly executed by Buyer of the obligations of Seller that accrue after Closing under any Other Agreements. (e) If applicable, a written assumption duly executed by Buyer of the loan documents with respect to Existing Notes. (f) If the Buyer is a corporation, a duly executed corporate resolution authorizing the execution of this Agreement and the purchase of the Property. 10.4 At Closing, Escrow Holder shall cause to be issued to Buyer a standard coverage (or ALTA extended, if elected pursuant to 9.1(g)) owner's form policy of title insurance effective as of the Closing, Issued by the Title Company in the full amount of the Purchase Price, insuring title to the Property vested in Buyer, subject only to the exceptions approved by Buyer. In the event there is a Purchase Money Deed of Trust In this transaction, the policy of title insurance shall be a Joint protection policy insuring both Buyer and Seller. IMPORTANT: IN A PURCHASE OR EXCHANGE OF REAL PROPERTY, IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED. A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING. 11. Prorations and Adjustments. 11.1 Taxes. Applicable real property taxes and special assessment bonds shall be prorated through Escrow as of the date of the Closing, based upon the latest tax bill available. The Parties agree to prorate as of the Closing any taxes assessed against the Property by supplemental bill levied by reason of events occurring prior to the Closing. Payment of the prorated amount shall be made promptly in cash upon receipt of a copy of any supplemental bill. 11.2 Insurance. WARNING: Any insurance which Seller may have maintained will terminate on the Closing. Buyer is advised to obtain appropriate insurance to cover the Property. 11.3 Rentals, Interest and Expenses. Scheduled rentals, interest on Existing Notes, utilities, and operating expenses shall be prorated as of the date of Closing. The Parties agree to promptly adjust between themselves outside of Escrow any rents received after the Closing. 11.4 Security Deposit. Security Deposits held by Seller shall be given to Buyer as a credit to the cash required of Buyer at the Closing. 11.5 Post Closing Matters. Any item to be prorated that is not determined or determinable at the Closing shall be promptly adjusted by the Parties by appropriate cash payment outside of the Escrow when the amount due is determined. 11.6 Variations in Existing Note Balances. In the event that Buyer is purchasing the Property subject to an Existing Deed of Trust(s), and in the event that a Beneficiary Statement as to the applicable Existing Note(s) discloses that the unpaid principal balance of such Existing Note(s) at the closing will be more or less than the amount set forth in paragraph 3.1(c) hereof ("Existing Note Variation"), then the Purchase Money Note(s) shall be reduced or increased by an amount equal to such Existing Note Variation. If there is to be no Purchase Money Note, the cash required at the Closing per paragraph 3.1(a) shall be reduced or increased by the amount of such Existing Note Variation. 11.7 Variations in New Loan Balance. In the event Buyer is obtaining a New Loan and the amount ultimately obtained exceeds the amount set forth in paragraph 5.1, then the amount of the Purchase Money Note, if any, shall be reduced by the amount of such excess. 11.8 Owner's Association Fees. Escrow Holder shall: (i) bring Seller's account with the association current and pay any delinquencies or transfer fees from Seller's proceeds, and (ii) pay any up front fees required by the association from Buyer's funds. 12. Representations and Warranties of Seller and Disclaimers. 12.1 Seller's warranties and representations shall survive the Closing and delivery of the deed for a period of 3 years, and any lawsuit or action based upon them must be commenced within such time period. Seller's warranties and representations are true, material and relied upon by Buyer and Brokers in all respects. Seller hereby makes the following warranties and representations to Buyer and Brokers: (a) Authority of Seller. Seller is the owner of the Property and/or has the full right, power and authority to sell, convey and transfer the Property to Buyer as provided herein, and to perform Seller's obligations hereunder. (b) Maintenance During Escrow and Equipment Condition At Closing. Except as otherwise provided in paragraph 9.1(n) hereof, Seller shall maintain the Prope_ rty until the Closing in its present condition, ordinary wear and tear excepted. Page4of8 INITIALS Last Edited: 5/2/2018 4:48 PM INI IALS © 2017 AIR CRE. All Rights Reserved. OFA-20.00, Revised 01-03-2017 (c) Hazardous Substances/Storage Tanks. Seller has no knowledge, except as otherwise disclosed to Buyer in writing, of the existence or prior existence on the Property of any Hazardous Substance, nor of the existence or prior existence of any above or below ground storage tank. (d) Compliance. Seller has no knowledge of any aspect or condition of the Property which violates applicable laws, rules, regulations, codes or covenants, conditions or restrictions, or of improvements or alterations made to the Property without a permit where one was required, or of any unfulfilled order or directive of any applicable governmental agency or casualty insurance company requiring any investigation, remediatlon, repair, maintenance or improvement be performed on the Property. (e) Changes in Agreements. Prior to the Closing, Seller will not violate or modify any Existing Lease or Other Agreement, or create any new leases or other agreements affecting the Property, without Buyer's written approval, which approval will not be unreasonably withheld. (f) Possessory Rights. Seller has no knowledge that anyone will, at the Closing, have any right to possession of the Property, except as disclosed by this Agreement or otherwise in writing to Buyer. (g) Mechanics' Llens. There are no unsatisfied mechanics' or materialmens' lien rights concerning the Property. (h) Actions, Suits or Proceedings. Seller has no knowledge of any actions, suits or proceedings pending or threatened before any commission, board, bureau, agency, arbitrator, court or tribunal that would affect the Property or the right to occupy or utilize same. (i) Notice of Changes. Seller will promptly notify Buyer and Brokers in writing of any Material Change (see paragraph 9.1(o)) affecting the Property that becomes known to Seller prior to the Closing. (j) No Tenant Bankruptcy Proceedings. Seller has no notice or knowledge that any tenant of the Property is the subject of a bankruptcy or insolvency proceeding. (k) No Seller Bankruptcy Proceedings. Seller is not the subject of a bankruptcy, insolvency or probate proceeding. (1) Personal Property. Seller has no knowledge that anyone will, at the Closing, have any right to possession of any personal property included in the Purchase Price nor knowledge of any liens or encumbrances affecting such personal property, except as disclosed by this Agreement or otherwise in writing to Buyer. 12.2 Buyer hereby acknowledges that, except as otherwise stated in this Agreement, Buyer is purchasing the Property in its existing condition and will, by the time called for herein, make or have waived all inspections of the Property Buyer believes are necessary to protect its own interest in, and its contemplated use of, the Property. The Parties acknowledge that, except as otherwise stated in this Agreement, no representations, inducements, promises, agreements, assurances, oral or written, concerning the Property, or any aspect of the occupational safety and health laws, Hazardous Substance laws, or any other act, ordinance or law, have been made by either Party or Brokers, or relied upon by either Party hereto. 12.3 In the event that Buyer learns that a Seller representation or warranty might be untrue prior to the Closing, and Buyer elects to purchase the Property anyway then, and in that event, Buyer waives any right that it may have to bring an action or proceeding against Seller or Brokers regarding said representation or warranty. 12.4 Any environmental reports, soils reports, surveys, and other similar documents which were prepared by third party consultants and provided to Buyer by Seller or Seller's representatives, have been delivered as an accommodation to Buyer and without any representation or warranty as to the sufficiency, accuracy, completeness, and/or validity of said documents, all of which Buyer relies on at its own risk. Seller believes said documents to be accurate, but Buyer is advised to retain appropriate consultants to review said documents and investigate the Property. 13. Possession. Possession of the Property shall be given to Buyer at the Closing subject to the rights of tenants under Existing Leases. 14. Buyer's Entry. At any time during the Escrow period, Buyer, and its agents and representatives, shall have the right at reasonable times and subject to rights of tenants, to enter upon the Property for the purpose of making inspections and tests specified in this Agreement. No destructive testing shall be conducted, however, without Seller's prior approval which shall not be unreasonably withheld. Following any such entry or work, unless otherwise directed in writing by Seller, Buyer shall return the Property to the condition it was in prior to such entry or work, including the re -compaction or removal of any disrupted soil or material as Seller may reasonably direct. All such inspections and tests and any other work conducted or materials furnished with respect to the Property by or for Buyer shall be paid for by Buyer as and when due and Buyer shall indemnify, defend, protect and hold harmless Seller and the Property of and from any and all claims, liabilities, losses, expenses (including reasonable attorneys' fees), damages, including those for injury to person or property, arising out of or relating to any such work or materials or the acts or omissions of Buyer, its agents or employees in connection therewith. 15. Further Documents and Assurances. The Parties shall each, diligently and In good faith, undertake all actions and procedures reasonably required to place the Escrow in condition for Closing as and when required by this Agreement. The Parties agree to provide all further information, and to execute and deliver all further documents, reasonably required by Escrow Holder or the Title Company. 16. Attorneys' Fees. If any Party or Broker brings an action or proceeding (including arbitration) involving the Property whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys' fees and costs. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment. The term "Prevailing Party" shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense. The attorneys' fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys' fees reasonably incurred. 17. Prior Agreements/Amendments. 17.1 This Agreement supersedes any and all prior agreements between Seller and Buyer regarding the Property. 17.2 Amendments to this Agreement are effective only if made in writing and executed by Buyer and Seller. 18. Broker's Rights. 18.1 If this sale is not consummated due to the default of either the Buyer or Seller, the defaulting Party shall be liable to and shall pay to Brokers the Brokerage Fee that Brokers would have received had the sale been consummated. If Buyer is the defaulting party, payment of said Brokerage Fee is in addition to any obligation with respect to liquidated or other damages. 18.2 Upon the Closing, Brokers are authorized to publicize the facts of this transaction. 19. Notices. 19.1 Whenever any Party, Escrow Holder or Brokers herein shall desire to give or serve any notice, demand, request, approval, disapproval or other communication, each such communication shall be in writing and shall be delivered personally, by messenger, or by mail, postage prepaid, to the address set forth in this agreement or by facsimile transmission, electronic signature, digital signature, or email. 19.2 Service of any such communication shall be deemed made on the date of actual receipt if personally delivered, or transmitted by facsimile transmission, electronic signature, digital signature, or email. Any such communication sent by regular mail shall be deemed given 48 hours after the same is mailed. Communications sent by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed delivered 24 hours after delivery of the same to the Postal Service or courier. If such communication is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day. 19.3 Any Party or Broker hereto may from time to time, by notice in writing, designate a different address to which, or a different person or additional persons to whom, all communications are thereafter to be made. 20. Duration of Offer. 20.1 If this offer is not accepted by Seller on or before 5:00 P.M. according to the time standard applicable to the city of San Diego on the date of Mav 9, 2018 It shall be deemed automatically revoked. 20.2 The acceptance of this offer, or of any subsequent counteroffer hereto, that creates an agreement between the Parties as described in paragraph 1.2, shall be deemed made upon delivery to the other Party or either Broker herein of a duly executed writing unconditionally accepting the last outstanding offer or counteroffer. 21. LIQUIDATED DAMAGES. (This Liauidated Damages paragraph is applicable only if initialed by both Parties). THE PARTIES AGREE THAT IT WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX, PRIOR TO SIGNING THIS AGREEMENT, THE ACTUAL DAMAGES WHICH WOULD BE SUFFERED BY SELLER IF BUYER FAILS TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT. THEREFORE, IF, AFTER THE SATISFACTION OR WAIVER OF ALL CONTINGENCIES PROVIDED FOR THE BUYER'S BENEFIT, BUYER BREACHES THIS AGREEMENT, SELLER SHALL BE ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF $ 30, 000 . UPON PAYMENT OF SAID SUM TO SELLER, BUYER SHALL BE RELEASED FROM ANY FURTHER LIABILITY TO SELLER, AND ANY ESCROW CANCELLATION FEES AND TITLE COMPANY CHARGES SHALL BE PAID BY SELLER. Page 5 of 8 INITIALS Last Edited: 5/2/2018 4:48 PM INITIALS © 2017 AIR CRE. All Rights Reserved. OFA-20.00, Revised 01-03-2017 Ef01,T /43 Buyer's Initials Seller's Initials 22. ARBITRATION OF DISPUTES. (This Arbitration of Disputes paragraph is applicable only if initialed by both Parties.) 22.1 ANY CONTROVERSY AS TO WHETHER SELLER IS ENTITLED TO THE LIQUIDATED DAMAGES AND/OR BUYER IS ENTITLED TO THE RETURN OF DEPOSIT MONEY, SHALL BE DETERMINED BY BINDING ARBITRATION BY, AND UNDER THE COMMERCIAL RULES OF THE AMERICAN ARBITRATION ASSOCIATION ("COMMERCIAL RULES"). ARBITRATION HEARINGS SHALL BE HELD IN THE COUNTY WHERE THE PROPERTY IS LOCATED. THE NUMBER OF ARBITRATORS SHALL BE AS PROVIDED IN THE COMMERCIAL RULES AND EACH SUCH ARBITRATOR SHALL BE AN IMPARTIAL REAL ESTATE BROKER WITH AT LEAST 5 YEARS OF FULL TIME EXPERIENCE IN BOTH THE AREA WHERE THE PROPERTY IS LOCATED AND THE TYPE OF REAL ESTATE THAT IS THE SUBJECT OF THIS AGREEMENT. THE ARBITRATOR OR ARBITRATORS SHALL BE APPOINTED UNDER THE COMMERCIAL RULES. AND SHALL HEAR AND DETERMINE SAID CONTROVERSY IN ACCORDANCE WITH APPUCABLE LAW, THE INTENTION OF THE PARTIES AS EXPRESSED IN THIS AGREEMENT AND ANY AMENDMENTS THERETO, AND UPON THE EVIDENCE PRODUCED AT AN ARBITRATION HEARING. PRE -ARBITRATION DISCOVERY SHALL BE PERMITTED IN ACCORDANCE WITH THE COMMERCIAL RULES OR STATE LAW APPLICABLE TO ARBITRATION PROCEEDINGS. THE AWARD SHALL BE EXECUTED BY AT LEAST 2 OF THE 3 ARBITRATORS, BE RENDERED WITHIN 30 DAYS AFTER THE CONCLUSION OF THE HEARING, AND MAY INCLUDE ATTORNEYS' FEES AND COSTS TO THE PREVAILING PARTY PER PARAGRAPH 16 HEREOF. JUDGMENT MAY BE ENTERED ON THE AWARD IN ANY COURT OF COMPETENT JURISDICTION NOTWITHSTANDING THE FAILURE OF A PARTY DULY NOTIFIED OF THE ARBITRATION HEARING TO APPEAR THEREAT. 22.2 BUYER'S RESORT TO OR PARTICIPATION IN SUCH ARBITRATION PROCEEDINGS SHALL NOT BAR SUIT IN A COURT OF COMPETENT JURISDICTION BY THE BUYER FOR DAMAGES AND/OR SPECIFIC PERFORMANCE UNLESS AND UNTIL THE ARBITRATION RESULTS IN AN AWARD TO THE SELLER OF UQUIDATED DAMAGES, IN WHICH EVENT SUCH AWARD SHALL ACT AS A BAR AGAINST ANY ACTION BY BUYER FOR DAMAGES AND/OR SPECIFIC PERFORMANCE. 22.3 NOTICE: BY INITIAUNG IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS SUCH RIGHTS ARE SPECIFICALLY INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY. WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION TO NEUTRAL ARBITRATIO Buyer's Initials F1_ ST /F5 Seller's Initials 23. Miscellaneous. 23.1 Binding Effect. This Agreement shall be binding on the Parties without regard to whether or not paragraphs 21 and 22 are initialed by both of the Parties. Paragraphs 21 and 22 are each incorporated into this Agreement only If initialed by both Parties at the time that the Agreement is executed. 23.2 Applicable Law. This Agreement shall be governed by, and paragraph 22.3 is amended to refer to, the laws of the state in which the Property is located. Any litigation or arbitration between the Parties hereto concerning this Agreement shall be initiated in the county in which the Property is located. 23.3 Time of Essence. Time is of the essence of this Agreement. 23.4 Counterparts. This Agreement may be executed by Buyer and Seller in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Escrow Holder, after verifying that the counterparts are identical except for the signatures, is authorized and instructed to combine the signed signature pages on one of the counterparts, which shall then constitute the Agreement. 23.5 Waiver ofJury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT. 23.6 Conflict. Any conflict between the printed provisions of this Agreement and the typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions. Seller and Buyer must Initial any and all handwritten provisions. 23.7 1031 Exchange. Both Seller and Buyer agree to cooperate with each other in the event that either or both wish to participate in a 1031 exchange. Any party initiating an exchange shall bear all costs of such exchange. The cooperating Party shall not have any liability (special or otherwise) for damages to the exchanging Party in the event that the sale is delayed and/or that the sale otherwise fails to qualify as a 1031 exchange. 23.8 Days. Unless otherwise specifically indicated to the contrary, the word "days" as used in this Agreement shall mean and refer to calendar days. 24. Disclosures Regarding The Nature of a Real Estate Agency Relationship. 24.1 The Parties and Brokers agree that their relationship(s) shall be governed by the principles set forth in the applicable sections of the California Civil Code, as summarized in paragraph 24.2. 24.2 When entering into a discussion with a real estate agent regarding a real estate transaction, a Buyer or Seller should from the outset understand what type of agency relationship or representation it has with the agent or agents in the transaction. Buyer and Seller acknowledge being advised by the Brokers in this transaction, as follows: (a) Seller's Agent. A Seller's agent under a listing agreement with the Seller acts as the agent for the Seller only. A Seller's agent or subagent has the following affirmative obligations: (1) To the Seller: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Seller. (2) To the Buyer and the Seller: a. Diligent exercise of reasonable skills and care in performance of the agent's duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the Parties. An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above. (b) Buyer's Agent. A selling agent can, with a Buyer's consent, agree to act as agent for the Buyer only. In these situations, the agent is not the Seller's agent, even if by agreement the agent may receive compensation for services rendered, either in full or in part from the Seller. An agent acting only for a Buyer has the following affirmative obligations. (1) To the Buyer: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Buyer. (2) To the Buyer and the Seller: a. Diligent exercise of reasonable skills and care in performance of the agent's duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the Parties. An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above. (c) Agent Representing Both Seller and Buyer. A real estate agent, either acting directly or through one or more associate licenses, can legally be the agent of both the Seller and the Buyer in a transaction, but only with the knowledge and consent of both the Seller and the Buyer. (1) In a dual agency situation, the agent has the following affirmative obligations to both the Seller and the Buyer: a. Afiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either Seller or the Buyer. b. Other duties to the Seller and the Buyer as stated above in their respective sections (a) or (b) of this paragraph 24.2. (2) In representing both Seller and Buyer, the agent may not without the express permission of the respective Party, disclose to the other Party that the Seller will accept a price less than the listing price or that the Buyer will pay a price greater than the price offered. (3) The above duties of the agent in a real estate transaction do not relieve a Seller or Buyer from the responsibility to protect their own interests. Buyer and Seller should carefully read all agreements to assure that they adequately express their understanding of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advice is desired, consult a competent professional. (d) Further Disclosures. Throughout this transaction Buyer and Seller may receive more than one disclosure, depending upon the number of agents assisting in the transaction. Buyer and Seller should each read its contents each time it is presented, considering the relationship between them and the real estate agent in this transaction and that disclosure. Buyer and Seller each acknowledge receipt of a disclosure of the possibility of multiple representation by the Broker representing that principal. This disclosure may be part of a listing agreement, buyer representation agreement or separate document. Buyer understands that Broker representing Buyer may also represent other potential buyers, who may consider, make offers on or ultimately acquire the Property. Seller understands that Broker representing Seller may also represent other sellers with competing properties that may be of interest to this Buyer. Brokers have no responsibility with respect to any default or breach hereof by either Party. The Parties agree that no lawsuit or other legal proceeding involving any breach of duty, error or omission relating to this transaction may be brought against Broker more than one year after the Date of Agreement and that the liability (including court costs and attorneys' fees), of any Broker with respect to any breach of duty, error or omission relating to this Agreement shall not exceed the fee received by such Broker pursuant to this Agreement; provided, however, that the foregoing limitation on each Broker's liability shall not be applicable to any gross negligence or willful misconduct of such Broker. 24.3 Confidential Information. Buyer and Seller agree to identify to Brokers as "Confidential" any communication or Information given Brokers that is considered by such Party to be confidential. CioSpT Page 6 of 8 INITIALS Last Edited: 5/2/2018 4:48 PM I ITIALS ® 2017 AIR CRE. All Rights Reserved. OFA-20.00, Revised 01-03-2017 25. Construction of Agreement. In construing this Agreement, all headings and titles are for the convenience of the Parties only and shall not be considered a part of this Agreement. Whenever required by the context, the singular shall include the plural and vice versa. This Agreement shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it. 26. Additional Provisions. Additional provisions of this offer, if any, are as follows or are attached hereto by an addendum or addenda consisting of paragraphs 26.1 through 26.1 . (If there are no additional provisions write "NONE".) 26. All closing costs shall be paid by Buyer. ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY AIR CRE OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS AGREEMENT OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO: 1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS AGREEMENT. 2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PROPERTY. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PROPERTY, THE INTEGRITY AND CONDITION OF ANY STRUCTURES AND OPERATING SYSTEMS, AND THE SUITABILITY OF THE PROPERTY FOR BUYER'S INTENDED USE. WARNING: IF THE PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THIS AGREEMENT MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED. NOTE: 1. THIS FORM IS NOT FOR USE IN CONNECTION WITH THE SALE OF RESIDENTIAL PROPERTY. 2. IF EITHER PARTY ISA CORPORATION, IT IS RECOMMENDED THAT THIS AGREEMENT BE SIGNED BY TWO CORPORATE OFFICERS. The undersigned Buyer offers and agrees to buy the Property on the terms and conditions stated and acknowledges receipt of a copy hereof. BROKER Colliers International CA, Inc., a Delaware corporation, d/b/a Colliers International Attn: Mark Lewkowitz Title: First Vice President Address: 4350 La Jolla Villaae Drive, Suite 500. San Diego. CA 92122 Phone: (858) 677-5361 Fax: (858)-795-4161 Email: mark.lewkowitz@colliers.com Federal ID No.: Broker/Agent BRE License #: 01785338 Date: BUYER The Citvpf National City or Assianee By: Ron Morrison Mayor City of National City By: Leslie Deese City Manager City of National City Address: Federal ID No.: 27. Acceptance. 27.1 Seller accepts the foregoing offer to purchase the Property and hereby agrees to sell the Property to Buyer on the terms and conditions therein specified. 27.2 In consideration of real estate brokerage service rendered by Brokers, Seller and Buyer agrees to pay Brokers a real estate Brokerage Fee in a sum equal to 4 % of the Purchase Price to be divided between the partles8rokoss as follows: Seller's responslbilltyerokec 1 % and Buyer's responslbilltyer. . 3 %. This Agreement shall serve as an irrevocable instruction to Escrow Holder to pay such Brokerage Fee to Brokers out of the proceeds accruing to the account of Seller at the Closing. 27.3 Seller acknowledges receipt of a copy hereof and authorizes Brokers to deliver a signed copy to Buyer. NOTE: A PROPERTY INFORMATION SHEET IS REQUIRED TO BE DELIVERED TO BUYER BY SELLER UNDER THIS AGREEMENT. Date: Z—/O BROKER SELLER Colliers International CA, Inc., a Senter J it T3 st 4 Delaware corporation, d/b/a Colliers InternationalBy: %A-1. -- Name Fri Attn: Mark Lewkowitz Title: Title: First Vice President Phone: Fax: Address: 4350 La Jolla Village Drive, Suite Email: esen (amjllermarine. 500 Phone: (858) 677-5361 By: Fax: (858) 795-4161 (619) Email: mark.lewkowitz@colliers.com Federal ID No.: Broker/Agent BRE License #: 01785338 417-2250 Name Printed: Pauline Senter Title: Phone: Fax: Email: Address: 1430 Hoover Avenue, National City. CA 91950 Federal ID No.: Page 7 of 8 INITIALS Last Edited: 5/2/2018 4:48 PM INITIALS © 2017 AIR CRE. All Rights Reserved. OFA-20.00, Revised 01-03-2017 AIR CRE. 500 North Brand Blvd, Suite 900, Glendale, CA 91203, Tel 213.687.8777, Email contracts@aircre.com NOTICE: No part of these works may be reproduced in any form without permission in writing. Page 8 of 8 INITIALS Last Edited: 5/2/2018 4:48 PM m 2017 AIR CRE. All Rights Reserved. INITIALS OFA-20.00, Revised 01-03-2017 INSURANCE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING. 12. HAZARDOUS SUBSTANCES. Seller is required by California Health and Safety Code §25359.7 to notify potential buyers of the presence of any hazardous Isubstance that Seller knows, or has reasonable cause to believe, is located on or beneath the Property. In accordance with such law, Buyer is hereby notified that: su Seller neither knows nor has reasonable cause to believe that any hazardous substance is on or beneath the Property, or Seller knows or has reasonable cause to believe that the following hazardous substances are on or beneath the Property: 13. OTHER. PLEASE NOTE: While the information contained in or attached to this Disclosure Statement is believed to be accurate as of the date that it was prepared, the applicable laws and the areas covered by the various natural hazard zones, etc. can change from time to time. Prior to the close of escrow, Buyer may wish to again check the status of the Property. Also, the city and/or county in which the Property is located may have established natural hazard zones in addition to those listed above. Buyer is advised to check with the appropriate local agency or agencies. The descriptions contained within the above disclosure paragraphs are not intended to be full and complete dissertations of all of the possible ramifications to the Buyer and/or the Property. In the event that this document Indicates that the Property is affected by one or more of the disclosures, Buyer is advised to: 1. Review the applicable laws In their entirety. 2. Seek advice of counsel as to the legal consequences of the hems disclosed. 3. Retain appropriate consultants to review and Investigate the impact of said disclosures. Likewise no representation or recommendation Is made BY AIR CRE or by any broker as to the legal sufficiency, legal effect, or consequences of this document or the Purchase Agreement to which it relates. Date: S Z--/C! SELLER er_Iv Tr >� By: Name Printed: /Ec1 Senter Title: By: Name Printed: Pauline Senter Receipt of the above Seller's Mandatory Disclosure Statement is hereby acknowledged: Date: BUYER The Cit of National City or Assignee By: Ron Morrison - Mayor AIR CRE. 500 North Brand Blvd, Suite 900, Glendale, CA 91203, Tel 213-687.8777, Email contracts@aircre.com NOTICE: No part of these works may be reproduced in any form without permission in writing. ST. Page 2 of 2 C ids INITIALS Last Edited: 5/2/2018 4:48 PM INITIALS © 2017 AIR CRE. All Rights Reserved. SMD-6.00, Revised 01-03-2017 Al RCR / ▪ 1 r1 SELLER'S MANDATORY DISCLOSURE STATEMENT (Required by law on transactions involving non-residential properties in California) DO NOT USE THIS FORM WITH REGARD TO THE SALE OF RESIDENTIAL PROPERTIES This disclosure statement is intended to be a part of the 12 STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE (See paragraph 9.1(a) of said document) or 0 (the "Purchase Agreement") dated , regarding that certain real property commonly known as (street address, city, state, zip): 1430 Hoover Avenue, National City, CA 91950 (the "Property") wherein Senter Family Trust is the Seller and The City of National City or Assignee Is the Buyer. Note: This disclosure statement is not designed nor intended to be used in place of the standard Property Information Sheet published BY AIR CRE ("AIR"). Both documents should be used in every transaction involving a sale. In order to comply with State law concerning disclosures to a potential purchaser, Seller elects to: ® A. Utilize a report prepared by a professional consultant which has been approved by the AIR, i.e., First American Natural Hazard Disclosures, (800) 527-0027, or JCP Property Disclosure Reports, (800) 748-5233. A copy of their report is attached hereto. (Complete paragraph 8, 9, 10,12 and 13 and sign this statement in the place provided.) ' 8. Utilize a report prepared by , with phone number: . A copy of their report is attached hereto. (Complete paragraphs 8, 9 10, 12, and 13, sign thls Statement in the place provided, and attach a copy of The Commercial Property Owner's Guide to Earthquake Safety.) u C. Complete this Disclosure Statement without the assistance of a professional consultant. (Complete paragraphs 1 through 13 and sign this Statement in the place provided. Remember to attach a copy of The Commercial Property Owner's Guide to Earthquake Safety.) 1. EARTHQUAKE FAULT ZONES. If the Property is located within a delineated Earthquake Fault Zone (a zone that encompasses a potentially or recently active trace of an earthquake fault that Is deemed by the State Geologist to constitute a potential hazard to structures from surface faulting or fault creep), California Public Resources Code *2621 et seq. mandates that prospective purchasers be advised that the Property is located within such a Zone, and that Its development may require a geologic report from a state registered geologist. In accordance with such law, Buyer is hereby informed that the Property E is or ❑ is not within a delineated Earthquake Fault Zone. 2. SEISMIC HAZARD ZONES. If the Property is located within a Seismic Hazard Zone as delineated on a map prepared by the California Division of Mines and Geology, California Public Resources Code §2690 et seq. mandates that prospective purchasers be advised that the Property is located within such a Zone. In accordance with such law, Buyer is hereby informed that the Property 0 is or ❑ is not within a Seismic Hazard Zone. 3. EARTHQUAKE SAFETY. If (1) the improvements on the Property were constructed prior to 1975, and (2) said improvements include structures with (i) pre -cast (e.g., tilt -up) concrete or reinforced masonry walls together with wood frame floors or roofs or (ii) unreinforced masonry walls, Buyer must be provided with a copy of The Commercial Property Owner's Guide to Earthquake Safety (the "Booklet") published by the California Seismic Safety Commission. Buyer is hereby informed that the Property:pe--� LJ (a) meets the foregoing requirements, and a copy of the Booklet and a completed "Commercial Property Earthquake Weakness Disclosure Report" is attached hereto. Within five business days of Buyer's receipt of said Disclosure Report, Buyer shall deliver a duly countersigned copy of the same to Escrow Holder, with a copy to Seller and Seller's Broker. Escrow Holder is hereby instructed that the Escrow shall not close unless and until Escrow Holder has received the Disclosure Report duly signed by both Seller and Buyer. (b) does not meet the foregoing requirements requiring the delivery of the Booklet. 4. FIRE PROTECTION. If the Property is located within a designated State Responsibility Area as delineated on a map prepared by the California Department of Forestry, California Public Resources Code §4136 mandates that prospective purchasers be advised that the Property is located within a wildland area which may contain substantial forest fire risks and hazards, that the State may not be responsible to provide fire protection services, and that the Property may be subject to the requirements of Public Resources Code 44291 which requires the periodic removal of brush, the maintenance of firebreaks, and other similar activities. In accordance with such law, Buyer is hereby informed that the Property E is or E is not within a designated State Responsibility Area. 5. FIRE HAZARD. If the Property is located within an area designated as a Very High Fire Hazard Severity Zone pursuant to Government Code 451178 et seq, 451183.5 mandates that prospective purchasers be advised that the Property is located within such a zone and that the Property may be subject to various maintenance, design and/or construction requirements and/or restrictions. In accordance with such law, Buyer is hereby informed that the Property El Is or Is not within a designated Very High Fire Hazard Severity Zone. 6. AREA OF POTENTIAL FLOODING. If the Property is located within an area of potential flooding in the event of the failure of a dam as shown on an inundation map designated pursuant to Government Code §8589.5, §8589.4 mandates that prospe a purchasers be advised that the Property is located within such an area. In accordance with such law, Buyer is hereby informed that the Property E is or ( is not within a designated area of potential flooding. 7. FLOOD HAZARD AREAS. If the Property is located within a designated Federal Flood Hazard Area as delineated on a map prepared by the Federal Emergency Management Agency, Federal law, ie. 42 U.S.C. §4104a, mandates that prospective purchasers be advised that the Property is located within an area having special flood hazarrcA yrd that flood insurance may be required as a condition to obtaining financing. In accordance with such law, Buyer is hereby informed that the Property is or 1I is not within a designated Federal Flood Hazard Area. 8. FLOOD DISASTER INSURANCE. If the Seller or Seller's predecessor -in -interest has previously received Federal flood disaster assistance and said assistance was conditioned upon obtaining and maintaining flood insurance on the Property, Federal law, ie. 42 U.S.C. §5154a, mandates that prospective purchasers be advised that they will be required to maintain such insurance on the Property and that if said insurance is not maintained and the Property is thereafter damaged by a flood disaster, the purchaser may be required to reimburse the Fe I Government for the disaster relief provided. Buyer is hereby informed that to the best of the Seller's knowledge Federal flood disaster assistance E has or has not been previously received with regard to the Property. Note: if such disaster assistance has been received, the law specifies that the required notice be "contained in documents evidencing the transfer of ownership". 9. WATER HEATER BRACING. If the Property contains one or more water heaters, Seller is required by California Health and Safety Code §19211 to certify to the Buyer that all such water heaters have been braced, strapped and/or anch�osreyr faccordance with law. Buyer is hereby advised that the required bracing, strapping Ln and/or anchors: ❑ have been Installed ❑ have not been installed, or Seller does not know whether they have been installed. 10. PRESENCE OF MOLD. If the seller or transferor of property knows of the presence of mold that affects the property and the mold either exceeds permissible exposure limits or poses a health threat then Health and Safety Code §26140, et seq. mans s that prospective purchasers be advised in writing of such mold. In accordance with such law, Buyer is hereby informed that the undersigned E does or does not know of the presence of such mold effecting the Property. 11. TITLE INSURANCE. In the event that the Purchase Agreement does not at present provide that title insurance will be obtained, Buyer is strongly urged to consider purchasing such insurance, and, in accordance with California Civil Code §1057.6, is advised as follows: IMPORTANT: IN A PURCHASE OR EXCHANGE OF REAL PROPERTY, IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINC E MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED. A NEW POLICY OF TITLE Pagelof2 INITIALS Last Edited: 5/2/2018 4:48 PM 1 ITIA © 2017AIR CRE. All Rights Reserved. SMD-6.00, Revised 01-03-2017 AIRCR.S3 PROPERTY INFORMATION SHEET (For the sale or leasing of non-residential properties) PREFACE: Purpose: This Statement is NOT a warranty as to the actual condition of the Property/Premises. The purpose is, instead, to provide the brokers and the potential buyer/lessee with important information about the Property/Premises which is currently in the actual knowledge of the Owner and which the Owner is required by law to disclose. Actual Knowledge: For purposes of this Statement the phrase 'actual knowledge' means: the awareness of a fact, or the awareness of sufficient information and circumstances so as to cause one to believe that a certain situation or condition probably exists. TO WHOM IT MAY CONCERN: Senter Family Trust ("Owner"), owns the Property/Premises commonly known as (street address, city, state, zip) 1430 Hoover Avenue, National City, CA 91950 Iocated in the County of San Dieao and generally described as (describe briefly the nature of the Premises or Property) an approximate 6,400 square foot warehouse situated on a .18 AC lot (hereinafter "Property"), and certifies that: 1. Material Physical Defects. Owner has no actual knowledge of any material physical defects in the Property or any improvements and structures thereon, including, but not limited to the roof, except (if there are no exceptions write "NONE"): OV6N . 2. Equipment. A. Owner has no actual knowledge that the heating, ventilating, air conditioning, plumbing, loading doors, electrical and lighting systems, life safety systems, security systems and mechanical equipment existing on the Property as of the date hereof, if any, are not in good operating order and condition, except (if there are no exceptions write "NONE"): N 0 NOT B. Owner has no actual knowledge of any leases, financing agreements, liens or other agreements affecting any equipment which is being included with the Property, except (if there are no exceptions write "NONE"): 3. Soil Conditions. Owner has no actual knowledge that the Properehas any slipping, sliding, settling, flooding, ponding or any other grading, drainage or soil problems, except (if there are no exceptions write "NONE"): Ne'rG . 4. Utilities. Owner represents and warrants that the Property is served S,hee followingnutilities (check the agpropriate boxes ublic sewer s�ssttem and the cost of installation thereof has been fully paid, L private septic system, In electricity, 1---1�, natural gas, ! J domestic water, telephone, and u other: 5. Insurance. Owner has no actual knowledge of any insurance claims filed regarding the Property during the preceding 3 years, except (if there are no exceptions write "NONE"): 6VON iG 6. Compliance With Laws. Owner has no actual knowledge of any aspect or condition of the Property which violates applicable laws, rules, regulations, codes, or covenants, conditions or restrictions, or of improvements or alterations made to the Property without a permit where one was required, or of any unfulfilled order or directive of any applicable government agency or of any casualty insurance company that any work ofninvestigation, remediation, repair, maintenance or improvement is to be performed on the Property, except (if there are no exceptions write "NONE"): . W t2— �.�$c� • JEj� 1 pe. • 7. Hazardous Substances and Mold. $JZ .e ttq 'y 1M0 e44p A. Owner has no actual knowledge of the Property ever having been used as a waste dump, of the past or present existence of any above or below ground storage tanks on the Property, or of the current existence on the Property of asbestos, transformers containing PCB's or any hazardous, toxic or infectious substance whose nature and/or quantity of existence, use, manufacture or effect, render it subject to Federal, state or local regulation, investigation, remediation or removal as potentially injurious to public health or welfare, except (if there are no exceptions write "NONE"): Hei'VC . B. Owner represents and warrants that it is not currently, and never has been engaged in the business of hauling waste, and never stored hazardous substances on the Property, except (if there are no exceptions write "NONE"): /Ir OrV& . C. Owner has no actual knowledge of the existence on the Property of hazardous levels of any mold or fungi defined as toxic under applicable state or Federal law, except (if there are no exceptions write "NONE"): /1/di/F . 8. Fire Damage. Owner has no actual knowledge of any structure on the Property having suffered material fire damage, except (if there are no exceptions write "NONE"): Ai . 9. Actions, Suits or Proceedings. Owner has no actual knowledge that any actions, suits or proceedings are pending or threatened before any court, arbitration tribunal, governmental department, commission, board, bureau, agency or instrumentality that would affect the Property or the right or ability of an owner or tenant to convey, occupy or utilize the Property, except (if there are no exceptions write "NONE"): NNem f:.. Owner has not served any Notices of Default on any of the tenants of the Property which have not been resolved except (if there are no exceptions write "NONE"): /�1dJb 10. Governmental Proceedings. Owner has no actual knowledge of any existing or contemplated condemnation, environmental, zoning, redevelopment agency plan or other land use regulation proceedings which could detrimentally affect the value, use and operation of the Property, except (if there are no exceptions write "NONE"): ..303i.{is,�1, i $ Pw134-ix- OF- Z4N,p 11. Unrecorded Title Matters. Owner has no actual knowledge of any encumbrances, covenants, conditions, restrictions, easements, licenses, liens, charges or other matters which affect the title of the Property that are not recorded in the official records of the county recorder where the Property is located, except (if there are no exceptions write "NONE"): N 0,4 t . 12. Leases. Owner has no actual knowledge of any leases, subleases or other tenancy agreements affecting the Property, except (if there are no exceptions write "NONE"): NON F . 13. Options. Owner has no actual knowledge of any options to purchase, rights of first refusal, rights of first offer or other similar agreements affecting the Property, except (if there are no exceptions write "NONE"): /VON' . 14. Short Sale/Foreclosure. The ability of the Owner to complete a sale of the Property E is contingent C�s not contingent upon obtaining the consent of one or more lenders to conduct a 'short sale', ie. a sale for less that the amount owing on the Property. (This paragraph only needs to be completed if this Prope Information Sheet is being completed in connection with the proposed sale of the Property) One or more of any loans secured by the Property C' isLf is t In foreclosure. 15. Energy Efficiency. The Property LJ has ‹ot been granted an energy efficiency rating or certification such as one from the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) or n Seller/Lessor does not know if the Property has been granted such a rating or certificate. If such a rating or certification has been obtained please describe the rating or certification and provide the name of the organization that granted it: 16. Other. (It will be presumed that there are no additional items which warrant disclosure unless they are set forth herein): . Page l of 2 INITIALS Last Edited: 5/2/2018 4:48 PM ITIALS © 2017AIR CRE. All Rights Reserved. PI-8.01, Revised 11-01-2017 The statements herein will be relied upon by brokers, buyers, lessees, lenders and others. Therefore, Owner and/or the Owner's Property Manager has reviewed and modified this printed statement as necessary to accurately and completely state all the known material facts concerning the Property. To the extent such modifications are not made, this statement may be relied upon as printed. This statement, however, shall not relieve a buyer or lessee of responsibility for independent investigation of the Property. Owner agrees to promptly notify, in writing, all appropriate parties of any material changes which may occur in the statements contained herein from the date this statement is signed until title to the Property is transferred, or the lease is executed. Date �-L-ram (fill in date of execution; OWNER Sente ,)alnily,�r05: By: Name P Title: By: Name Printed: Pauline Senter Buyer/lessee hereby acknowledges receipt of a copy of this Property Information Sheet on . (Fill in date received) BUYER/LESSEE The City of Nat' City or Assignee By: Leslie Deese City Manager City of National City AIR CRE. 500 North Brand Blvd, Suite 900, Glendale, CA 91203, Tel 213-687-8777, Email contracts@aircre.com NOTICE: No part of these works may be reproduced in any form without permission in writing. Page 2 of 2 INITIALS Last Edited: 5/2/2018 4:48 PM © 2017AIR CRE. All Rights Reserved. INITIALS PI-8.01, Revised 11-01-2017 Colliers INTERNATIONAL Please note that the terms "Seller" and "Buyer" are defined by the CA Civil ('ode to include a lessor and lessee, respectively. This form must be delivered to both parties once the Letter of Intent is prepared, or where a legitimate interest/intent to be bound is shown (e.g. no outstanding negotiations). Date: Seller/Lessor: Buyer/Lessee: Property Name: Street Address, City, State: Further described as: REPRESENTATION CONFIRMATION April 19, 2018 Senter Family Trust The City of National City or Assignee 1430 Hoover Ave 1430 Hoover Ave, National City, CA 91950 an approximate 6,400 square foot warehouse situated on a .18 AC lot A real estate agent, either acting directly or through one or more associate licensees, can legally be the agent of both the Seller and the Buyer in a transaction, but only with the knowledge and consent of both the Seller and the Buyer. In a dual agency situation, the agent has the following affirmative obligations to both the Seller and the Buyer: (a) A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either the Seller or the Buyer. (b) Other duties to the Seller and the Buyer as stated above in their respective sections. In representing both Seller and Buyer, the agent may not, without the express permission of the respective party, disclose to the other party that the Seller will accept a price less than the listing price or that the Buyer will pay a price greater than the price offered. The above duties of the agent in a real estate transaction do not relieve a Seller or Buyer from the responsibility to protect his or her own interests. You should carefully read all agreements to assure that they adequately express your understanding of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advice is desired, consult a competent professional. Throughout your real property transaction you may receive more than one disclosure form, depending upon the number of agents assisting in the transaction. The law requires each agent with whom you have more than a casual relationship to present you with this disclosure form. You should read its contents each time it is presented to you, considering the relationship between you and the real estate agent in your specific transaction. Colliers International of CA, Inc. Name of Listing Agent (Brokerage Finn) is the agent of (check one): ❑ The seller exclusively; or El Both the buyer and seller. Colliers International of CA, Inc. of (check one): ❑ The buyer exclusively; or O The seller exclusively; or © Both the buyer and seller. SELLE ESSOR BY:u� PRINT NAME: Ed Senter PRINT NAME: Pauline Senter TITLE: -rausJ Name of Selling Agent/Procuring Broker (Brokerage Finn) is the agent BUYER/LESSEE B4gromvoke- Leslie Deese City Manager City of National City 2 -HU 211 y3�a_2=$Cw 2 5rs 311 sa_4 ° 3 52 mom3°ia°°! .2 5 74. .1 1 p z 5.2 S." e oikAt 8 act as an agent for the buyer only, when 21 1 14 o `v i0 'S 2 g .22..5 9E MSc 4224 N c 20sbV A ao€ tc1'o°-Es ge 87 ibility of a dual agent to any p 88 o 5 4 2 5 1 Colliers iN TE R N ATIO NAL Please note that the terms "Seller" and "Buyer" are defined by the CA Civil Code to include a lessor and lessee, respectively. If you are the Listing Agent —you must deliver the form to the seller/lessor in the Representation Agreement. You must also deliver the form to the buyer/lessee once the Letter of Intent is prepared, or where a legitimate interest/intent to be bound is shown (e.g. no outstanding negotiations). If you are the Buyer's Agent- you must deliver the form to the buyer/lessee in the Representation Agreement. In addition, you must deliver the form to the seller/lessor once the Letter of Intent is prepared, or where a legitimate interest/intent to be bound is shown (e.g. no outstanding negotiations). DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIP (As required by the Civil Code) When you enter into a discussion with a real estate agent regarding a real estate transaction, you should from the outset understand what type of agency relationship or representation you wish to have with the agent in the transaction. SELLER'S AGENT A Seller's agent under a listing agreement with the Seller acts as the agent for the Seller only. A Seller's agent or a subagent of that agent has the following affirmative obligations: To the Seller: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Seller. To the Buyer and the Seller: (a) Diligent exercise of reasonable skill and care in performance of the agent's duties. (b) A duty of honest and fair dealing and good faith. (c) A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the parties. An agent is not obligated to reveal to either party any confidential information obtained from the other party that does not involve the affirmative duties set forth above. BUYER'S AGENT A selling agent can, with a Buyer's consent, agree to act as agent for the Buyer only. In these situations, the agent is not the Seller's agent, even if by agreement the agent may receive compensation for services rendered, either in full or in part from the Seller. An agent acting only for a Buyer has the following affirmative obligations: To the Buyer: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Buyer. To the Buyer and the Seller: (a) Diligent exercise of reasonable skill and care in performance of the agent's duties. (b) A duty of honest and fair dealing and good faith. (c) A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the parties. An agent is not obligated to reveal to either party any confidential information obtained from the other party that does not involve the affirmative duties set forth above. AGENT REPRESENTING BOTH SELLER AND BUYER A real estate agent, either acting directly or through one or more associate licensees, can legally be the agent of both the Seller and the Buyer in a transaction, but only with the knowledge and consent of both the Seller and the Buyer. In a dual agency situation, the agent has the following affirmative obligations to both the Seller and the Buyer: (a) A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either the Seller or the Buyer. (b) Other duties to the Seller and the Buyer as stated above in their respective sections. In representing both Seller and Buyer, the agent may not, without the express permission of the respective party, disclose to the other party that the Seller will accept a price less than the listing price or that the Buyer will pay a price greater than the price offered. The above duties of the agent in a real estate transaction do not relieve a Seller or Buyer from the responsibility to protect his or her own interests. You should carefully read all agreements to assure that they adequately express your understanding of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advice is desired, consult a competent professional. Throughout your real property transaction you may receive more than one disclosure form, depending upon the number of agents assisting in the transaction. The law requires each agent with whom you have more than a casual relationship to present you with this disclosure form. You should read its contents each time it is presented to you, considering the relationship between you and the real estate agent in your specific transaction. This disclosure form includes the provisions of Sections 2079.13 to 2079.24, inclusive, of the Civil Code set forth on the reverse hereof. Read it carefully. Colliers International (CA), Inc. 1)14! b Agent Printed Name Buyer/Lessee Signature (date) Leslie Deese Associate Licensee Signature (date) Mark Lewkowitz Associate Licensee Printed Name Bueye rsee Pri Nam /u. S2-i S er ssor Sign a (date) Senter Family Trust Seller/Lessor Printed Name RESOLUTION NO. 2018 — 85 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE CITY MANAGER TO EXECUTE THE STANDARD OFFER, AGREEMENT, AND ESCROW INSTRUCTIONS FOR THE PURCHASE OF REAL PROPERTY LOCATED AT 1430 HOOVER AVENUE IN NATIONAL CITY IN ORDER TO PROVIDE SECURE STORAGE FOR THE NATIONAL CITY POLICE DEPARTMENT AND OTHER DEPARTMENTS' OVERS IZED VEHICLES AND TRAILERS, FOR A TOTAL SALES PRICE OF $973,350 AND THE PAYMENT OF CLOSING COSTS NOT TO EXCEED $10,000, AND $100,000 FOR TENANT IMPROVEMENTS; AND AUTHORIZING THE ESTABLISHMENT OF A BUDGET APPROPRIATION IN THE AMOUNT OF $200,000 FROM AVAILABLE FUND BALANCE OF THE ASSET FORFEITURE FUND, AND $215,000 FROM AVAILABLE FUND BALANCE OF THE DEVELOPMENT IMPACT FEES FUND WHEREAS, as part of a pending relocation process, the National City Police Department ("NCPD") and the Public Works Department ("PW") need space to store vehicles and supplies that were previously stored at the Public Works Yard located at 2100 Hoover Avenue (the "locations"); and WHEREAS, the City demolished the facility at the location, conducted required environmental remediation, and sold the property to the National City Housing Authority for the development of a 201 unit affordable housing project known as WI-TOD or the Paradise Creek Affordable Housing Project; and WHEREAS, the NCPD has been actively searching for a location to securely store their Mobile Command Vehicle, SWAT armored vehicle and support vehicles, traffic radar trailers, DUI trailer, Crisis Negotiations trailer, surveillance van, and motorcycles; and WHEREAS, the real property ("Property") located at 1430 Hoover Avenue is 0.18 acres with a 6,400 square foot warehouse ("Warehouse") that is available for purchase; and WHEREAS, after an extensive search, the Warehouse was found to be ideal for NCPD's and PW's vehicle and equipment storage needs; and WHEREAS, City staff proposed to negotiate the purchase of the Property during a Closed Session Meeting of the City Council on April 17, 2018, and received direction to make an offer on the Property; and WHEREAS, the City procured an appraisal for the Property, which was appraised at $1,150,000; and WHEREAS, City staff negotiated a sales price of $973,350 and the payment of closing costs not to exceed $10,000; and WHEREAS, City staff negotiated $100,000 in needed tenant improvements, including modifications to make the Warehouse ADA compliant. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of National City hereby authorizes the City Manager or designee to execute a Purchase and Sale Agreement and any related escrow documents necessary to complete the purchase of the property located at 1430 Hoover Avenue in order to provide secure storage for Police Resolution No. 2018 — 85 Page Two Department and other departments' oversized vehicles and trailers, for a total sales price of $973,350, and the payment of closing costs not to exceed $10,000, and $100,000 for tenant improvements. Said Agreement is on file in the office of the City Clerk. BE IT FURTHER RESOLVED, that the City Council authorizes a budget appropriation of $200,000 from available fund balance of the Asset Forfeiture Fund and $215,000 from available fund balance of the Development Impact Fees Fund. PASSED and ADOPTED this 15th day of May, 2018. Morrison,ayor ATTEST: D1 Mi. 'ael R. D.IIa, ' ity Clerk APPROVED AS TO FORM: A gil vo'rs- .ne Cit ' torney Passed and adopted by the Council of the City of National City, California, on May 15, 2018 by the following vote, to -wit: Ayes: Councilmembers Cano, Mendivil, Morrison, Rios, Sotelo-Solis. Nays: None. Absent: None. Abstain: None. AUTHENTICATED BY: RON MORRISON Mayor of the City of National City, California .p A a City Clerk of the City of ational ity, California /i By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2018-85 of the City of National City, California, passed and adopted by the Council of said City on May 15, 2018. City Clerk of the City of National City, California By: Deputy CITY OF NATIONAL CITY, CALIFORNIA COUNCIL AGENDA STATEMENT MEETING DATE: May 15, 2018 AGENDA ITEM NO. 26 TEM TITLE: Resolution of the City Council of the City of National City authorizing the City Manager to execute the Standard Offer, Agreement, and Escrow Instructions for the purchase of real property located at 1430 Hoover Avenue in National City, in order to provide secure storage for the National City Police Department and other department's oversized vehicles and trailers, for a total sales price of $973,350 and the payment of closing costs not to exceed $10,000 and $100,000 for tenant improvements; and authorizing the establishment of a budget appropriation of $200,000 from available fund balance of the Asset Forfeiture Fund and $215,000 from available fund balance of the Development Impact Fees Fund. PREPARED BY: Gregory Rose, Property Agent Housing & Economic PHONE: 619.336.4266 D: elopm7nt EXPLANATION: APPROVES The National City Police Department (NCPD) has been actively searching for a location to securely store their Mobile Command Vehicle, SWAT armored vehicle and support vehicles, traffic radar trailers, DUI trailer, Crisis Negotiations trailer, surveillance van, and motorcycles. The 6400 sq. ft. warehouse at 1430 Hoover Avenue ("Warehouse") is ideal for NCPD's storage needs. NCPD's personal protection equipment used during critical incidents would also be stored in the Warehouse. The Warehouse will also be used by other departments, including Public Works, for vehicle and general storage. The Warehouse will need modifications to be made by the City including having the bathroom made ADA compliant, installing an overhead sprinkler system, installing an alarm system, and removing an office addition. DEPARTMENT: , INANCIAL STATEMENT: /: APPROVED: l C L( Finance ACCOUNT NO. APPROVED: MIS The appropriation of $200,000.00 from unassigned fund balance of fund 131-2501 to 131-409-500-598-1612. The appropriation of $215,000.00 from unassigned fund balance of fund 325-2501 to 325-409-500-598-1612. The remaining $668,350.00 from Acc No. 296-409-500-598-1596 WI-TOD / PW Relocation. ENVIRONMENTAL REVIEW: Approval of the property transfer is not a "Project" under section 15378 of the California Environmental Quality Act ("CEQA") guidelines because the proposed action consists of an administrative activity that will not result in direct or indirect physical changes to the environment. ORDINANCE: INTRODUCTION: FINAL ADOPTION: STAFF RECOMMENDATION: Adopt the Resolution. BOARD / COMMISSION RECOMMENDATION: n/a ATTACHMENTS: 1. Offer, Standard Agreement and Escrow Instructions 2. Sales Brochure 3. Property Appraisal 4. Resolution Attachment No. 1 ARCR NMI STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE (Non -Residential) Dated: April 19, 2018 1. Buyer. 1.1 The City of National City or Assignee ,("Buyer") hereby offers to purchase the real property, hereinafter described, from the owner thereof ("Seller) (collectively, the "Parties" or individually, a "Party"), through an escrow ("Escrow") to close 30-or 10 days after the waiver or expiration of the Buyer's Contingencies, ("Expected Closing Date") to be held by Chicago Title Company ("Escrow Holder") whose address is 2365 Northaide Drive, #600, San Diego. CA 92108 Phone No. (639) 209-3985 Facsimile No. (6191 209-3489 upon the terms and conditions set forth in this agreement ("Agreement"). Buyer shall have the right to assign Buyer's rights hereunder, but any such assignment shall not relieve Buyer of Buyer's obligations herein unless Seller expressly releases Buyer. 1.2 The term "Date of Agreement" as used herein shall be the date when by execution and delivery (as defined in paragraph 20.2) of this document or a subsequent counteroffer thereto, Buyer and Seller have reached agreement in writing whereby Seller agrees to sell, and Buyer agrees to purchase, the Property upon terms accepted by both Parties. 2. Property. 2.1 The real property ("Property") that is the subject of this offer consists of (insert a brief physical description) an approximate 6,400 square foot warehouse situated on a .18 AC lot is located in the County of San Diego ,iscommonly known as (street address, city, state, zip) 1430 Hoover Avenue, National City, CA 91950 and is legally described as: to be followed through escrow (APN: 560-061-15 ). 2.2 If the legal description of the Property is not complete or is inaccurate, this Agreement shall not be invalid and the legal description shall be completed or corrected to meet the requirements of Chicago Title ("Title Company"), which shall issue the title policy hereinafter described. 2.3 The Property includes, at no additional cost to Buyer, the permanent improvements thereon, including those items which pursuant to applicable law are a part of the property, as well as the following items, if any, owned by Seller and at present located on the Property: electrical distribution systems (power panel, bus ducting, conduits, disconnects, lighting fixtures); telephone distribution systems (lines, jacks and connections only); space heaters; heating, ventilating, air conditioning equipment ("HVAC"); air lines; fire sprinkler systems; security and fire detection systems; carpets; window coverings; wall coverings; and (collectively, the "Improvements"), 2.4 The fire sprinkler monitor: ❑ is owned by Seller and included in the Purchase Price, ❑ is leased by Seller, and Buyer will need to negotiate a new lease with the fire monitoring company, ownership will be determined during Escrow, or there is no fire sprinkler monitor. 2.5 Except as provided in Paragraph 2.3, the Purchase Price does not include Seller's personal property, furniture and furnishings, and all of which shall be removed by Seller prior to Closing. 3. Purchase Price. 3.1 The purchase price ("Purchase Price") to be paid by Buyer to Seller for the Property shall be $ 945,000 , payable as follows: (Strike any not applicable) (a) Cash down payment, including the Deposit as defined in paragraph 4.3 (or if an all cash transaction, the Purchase Price): $945,000 4.r,) n.,,pa^. of "Niai-1:0-"ar 4s0 nad p-r,gr, pi, 5 1, if a^y• tha a-'cti^g prarn"rtary ro.o(r) ("E„ c.p..g 5-id riff, Na•a;r p-y_bla a, par r^oo.fr,;"ad:ng :^tarot..a''' u^5a r-id (a^a/ar tfia a^tire u^p"d b,ra^ca :r d•.= o^ <a'd <word (Vita if per ^a^tf<, ^crud ^g i^tar^c• a• the rate of u"0' paid (a^d/or the a^bra u^find b,k^co "r .shed "^-.f,inragr,ph < (.a„rrh,.e aanpey Iwo,...) ;n .he ,..,n.int Total Purchase Price: % per annum $945.000 3.2 If Buyer is taking title to the Property subject to, or assuming, an Existing Deed of Trust and such deed of trust permits the beneficiary to demand payment of fees including, but not limited to, points, processing fees, and appraisal fees as a condition to the transfer of the Property, Buyer agrees to pay such fees up to a maximum of 1.5% of the unpaid principal balance of the applicable Existing Note. 4. Deposits. 4.1 Buyer has delivered to Broker a check in the sum of , payable to Escrow Holder, to be delivered by Broker to Escrow Holder within 2 or business days after both Parties have executed this Agreement and the executed Agreement has been delivered to Escrow Holder, or VI within 2 or business days after both Parties have executed this Agreement and the executed Agreement has been delivered to Escrow Holder Buyer shall deliver to Escrow Holder a check in the sum of $ 30, 000 . If said check is not received by Escrow Holder within said time period then Seller may elect to unilaterally terminate this transaction by giving written notice of such election to Escrow Holder whereupon neither Party shall have any further liability to the other under this Agreement. Should Buyer and Seller not enter into an agreement for purchase and sale, Buyer's check or funds shall, upon request by Buyer, be promptly returned to Buyer. a.2 ^dd'7arvl d�perirr- .^ b ,pi -died kn.,. Purcha'9 °nra a• tka ncr;ag 0,) Wi.h.^ s h„r;n^rr d,yr aenr .hr.,,ntinnon,.'or d;cr,irrod :n p,rnr.ph p 1 (,) a,ra„gf, (,.4 ,ra ,ppra„ad er ..ci:,,ad, g„ yor u'au deP^dt ,w•h Err.a... Holder t-a =dd'gav' r..m cf •aba C'at"eg fr( If ,n A,4A F,,.n,i nnrn"n..r rare;,,e,f by Ecrrn,., unider,.,:.h:n .ho n,na Par�cid prci.ndad the^ Sauo..,,�y ^citify g��yaS Ftrtci,., uoida5 a^d grcivarS :n .a ""-,.ad ,.,ithoi�. y,..hor' ncu pr :nr.rcOa ' 4.3 Escrow Holder shall deposit the funds deposited with it by Buyer pursuant to paragraphs 4.1 and 4.2 (collectively the "Deposit"), in a State or Federally chartered bank in an interest bearing account whose term is appropriate and consistent with the timing requirements of this transaction. The interest therefrom shall accrue to the benefit of Buyer, who hereby acknowledges that there may be penalties or interest forfeitures if the applicable instrument is redeemed prior to its specified maturity. Buyer's Federal Tax Identification Number is . NOTE: Such interest bearing account cannot be opened until Buyer's Federal Ta INITIALS © 2017 AIR CRE. All Rights Reserved. Page 1 of 8 Last Edited: 5/2/2018 4:48 PM IRITIALS OFA-20.00, Revised 01-03-2017 Attachment No. 1 Identification Number is provided. rf .aid .,,,.n,a. to collar_mcand sitw mdapa^dent enpridar,tinn far Cella. a.aci won os th;t nareement a^d the grim^b^g ostbr ^o^b^gency period to g..yar ar /sprain fuse•, sad Click indepandant ,ap.:der,t: ie nein .af..ndakla en o.,yer k„t,rb,u he crad:tad to the oueehaea Dore ,n eke e.,en..hat try p...eh...e os the o"operey :r rn^.pleted Etna' ins rnnttngeary rank, f..r.rnrpt eakl� to at le r. m os the ....chase Price, on tae.pr eaa.onakly aeeepeabla to g„y^. Sari, loan ('?kW V pp') shall be ee^•ad by a Sze dead of Vue*or S 3 If, after rliligenra,Rnynr shall notify its Rrnkar Fcrrnw Hnldpr and Sa liar in writing within tha rims cparifiad in paragraph S 7 heron( that RI war has .yap.hallm e^titL^deo the prong''rehirp osthe pepora, olio. any iptereeterred tbewon, larr only e.reenn Hnl,{r.r and T»lit rnrppany e,..edItir.., fa... and costs, wkieb.Buyarshall-pay. 6. a , if seller ,f,prn.,e. oo.ye:. financial. (rea raraurapk 6 c) the nureha`e Monny Alo*ath,u prot^de foe ;'sere., on „'paid principal at tP^ case of re" principal and iotareet-p' d a. fouo,ut• The money Not^ '.ad nurchxPin y npey peed its Tn,e..hau s,a on the e,.erept torn,. join.' apd suho.din"se only fit the e„'enng s a.^(.) and/- .ka ue,n Loan e„p.errly eaued for by title na.aa.na t F o Ma c,.rek,re .Annoy u^te and/'c rite o..rckara n.nnay need of rn its .hall eonsa;n prn.n.,nnr_rcig, retina the faun..,in0 (raa also pragrapk Ina (H))• �,) n.apnhrn^nt orincip,l .nay kn peep,id ip ..,kola ae is past at any a..,a ,.athnna penalty at the apbnn of the i.due. • H.. ..np,;d kalanea of ea:d hintci en spil"ert far notice of dos,. stand/n..,la ,..;tk ra0,rd t , a,eh .n rt0,0e ne dead of feint yt al/lick ;t ..,ill ke r.�kn..up,te fin I ca'C col c ac.gpv IS TO [OPEC, GCE ^N TEE enOeEnTy A obhgatioa ro prn.,ue fin,ne;n0 .. enntin0ant „nn cells: e raarnnahla apprn , pick gin, anent -din., to raei.fy itealf w;tk regard 50 nuyar . sn,nri,l condition and to notify Erc.n... undder a. to wharha. ae oar g,.yar'e financial condo'' Ir �..eeps,hhS is rnune four to nosy e.c.n.., Ho'deq i^ a^Sng of the id,^rrrov_l-of th4 co^Snge^ry .aid time pa•io'i preruened thae Sauer h ;.ad dnn.,.nanhbo^ the^ Selig." A..yci. r ncipae.t rhau kit eef.,nd^d la.. Title rn.np,ny and E,,.n,y ur.l.tar ea',imitating' facie and cores all Of whirk.hall bog„ycir . nkligatir.., 7. Real Estate Brokers. 7.1 The following real estate broker(s) ("Brokers") and brokerage relationships exist in this transaction and are consented to by the Parties (check the applicable boxes): represents Seller exclusively ("Seller's Broker"); LJ represents Buyer exclusively ("Buyer's Broker"); or M Colliers international of CA, Inc. represents both Seller and Buyer ("Dual Agency"). The Parties acknowledge that other than the Brokers listed above, there are no other brokers representing the Parties or due any fees and/or commissions under this Agreement. See paragraph 24 regarding the nature of a real estate agency relationship. Buyer shall use the services of Buyer's Broker exclusively in connection with any and all negotiations and offers with respect to the Property for a period of 1 year from the date inserted for reference purposes at the top of page 1. 7.2 Buyer and Seller each represent and warrant to the other that he/she/it has had no dealings with any person, firm, broker or finder in connection with the negotiation of this Agreement and/or the consummation of the purchase and sale contemplated herein, other than the Brokers named in paragraph 7.1, and no broker or other person, firm or entity, other than said Brokers is/are entitled to any commission or finder's fee in connection with this transaction as the result of any dealings or acts of such Party. Buyer and Seller do each hereby agree to indemnify, defend, protect and hold the other harmless from and against any costs, expenses or liability for compensation, commission or charges which may be claimed by any broker, finder or other similar party, other than said named Brokers by reason of any dealings or act of the indemnifying Party. 8. Escrow and Closing. 8.1 Upon acceptance hereof by Seller, this Agreement, including any counteroffers incorporated herein by the Parties, shall constitute not only the agreement of purchase and sale between Buyer and Seller, but also instructions to Escrow Holder for the consummation of the Agreement through the Escrow. Escrow Holder shall not prepare any further escrow instructions restating or amending the Agreement unless specifically so instructed by the Parties or a Broker herein. Subject to the reasonable approval of the Parties, Escrow Holder may, however, include its standard general escrow provisions. In the event that there is any conflict between the provisions of the Agreement and the provisions of any additional escrow instructions the provisions of the Agreement shall prevail as to the Parties and the Escrow Holder. 8.2 As soon as practical after the receipt of this Agreement and any relevant counteroffers, Escrow Holder shall ascertain the Date of Agreement as defined in paragraphs 1.2 and 20.2 and advise the Parties and Brokers, in writing, of the date ascertained. 8.3 Escrow Holder is hereby authorized and instructed to conduct the Escrow in accordance with this Agreement, applicable law and custom and practice of the community in which Escrow Holder is located, including any reporting requirements of the Internal Revenue Code. In the event of a conflict between the law of the state where the Property is located and the law of the state where the Escrow Holder is located, the law of the state where the Property is located shall prevail. 8.4 Subject to satisfaction of the contingencies herein described, Escrow Holder shall close this escrow (the "Closing") by recording a general warranty deed (a grant deed in California) and the other documents required to be recorded, and by disbursing the funds and documents in accordance with this Agreement. 8.5 Buyer and Seller shall each pay one-half of the Escrow Holder's charges and Seller shall pay the usual recording fees and any required documentary transfer taxes. Seller shall pay the premium for a standard coverage owner's or joint protection policy of title insurance. (See also paragraph 11.) 8.6 Escrow Holder shall verify that all of Buyer's contingencies have been satisfied or waived prior to Closing. The matters contained in paragraphs 9.1 subparagraphs (b), (c), (d), (e), (g), (i), (n), and (o), 9.4, 12, 13, 14, 16, 18, 20, 21, 22, and 24 are, however, matters of agreement between the Parties only and are not instructions to Escrow Holder. 8.7 If this transaction is terminated for non -satisfaction and non -waiver of a Buyer's Contingency, as defined in paragraph 9.2, then neither of the Parties shall thereafter have any liability to the other under this Agreement, except to the extent of a breach of any affirmative covenant or warranty in this Agreement. In the event of such termination, Buyer shall, subject to the provisions of paragraph 8.10, be promptly refunded all funds deposited by Buyer with Escrow Holder, less only the $100 provided for in paragraph 4.4 and the Title Company and Escrow Holder cancellation fees and costs, all of which shall be Buyer's obligation. If this transaction is terminated as a result of Seller's breach of this Agreement then Seller shall pay the Title Company and Escrow Holder cancellation fees and costs. 8.8 The Closing shall occur on the Expected Closing Date, or as soon thereafter as the Escrow is in condition for Closing; provided, however, that if the Closing does not occur by the Expected Closing Date and said Date is not extended by mutual instructions of the Parties, a Party not then in default under this Agreement may notify the other Party, Escrow Holder, and Brokers, in writing that, unless the Closing occurs within 5 business days following said notice, the Escrow shall be deemed terminated without further notice or instructions. 8.9 Except as otherwise provided herein, the termination of Escrow shall not relieve or release either Party from any obligation to pay Escrow Holder's fees a Page 2 of 8 INITIALS Last Edited: 5/2/2018 4:48 PM © 2017AIR CRE. All Rights Reserved. *1/J INITIALS OFA-20.00, Revised 01-03-2017 Attachment No. 1 costs or constitute a waiver, release or discharge of any breach or default that has occurred in the performance of the obligations, agreements, covenants or warranties contained therein. 8.10 If this sale of the Property is not consummated for any reason other than Seller's breach or default, then at Seller's request, and as a condition to any obligation to return Buyer's deposit (see paragraph 21), Buyer shall within 5 days after written request deliver to Seller, at no charge, copies of all surveys, engineering studies, soil reports, maps, master plans, feasibility studies and other similar items prepared by or for Buyer that pertain to the Property. Provided, however, that Buyer shall not be required to deliver any such report if the written contract which Buyer entered into with the consultant who prepared such report specifically forbids the dissemination of the report to others. 9. Contingencies to Closing. 9.1 The Closing of this transaction is contingent upon the satisfaction or waiver of the following contingencies. IF BUYER FAILS TO NOTIFY ESCROW HOLDER, IN WRITING, OF THE DISAPPROVAL OF ANY OF SAID CONTINGENCIES WITHIN THE TIME SPECIFIED THEREIN, IT SHALL BE CONCLUSIVELY PRESUMED THAT BUYER HAS APPROVED SUCH ITEM, MATTER OR DOCUMENT. Buyer's conditional approval shall constitute disapproval, unless provision is made by the Seller within the time specified therefore by the Buyer in such conditional approval or by this Agreement, whichever is later, for the satisfaction of the condition imposed by the Buyer. Escrow Holder shall promptly provide all Parties with copies of any written disapproval or conditional approval which it receives. With regard to subparagraphs (a) through (m) the pre-printed time periods shall control unless a different number of days is inserted in the spaces provided. (a) Disclosure. Seller shall make to Buyer, through Escrow, all of the applicable disclosures required by law (See AIR CRE ("AIR") standard form entitled "Seller's Mandatory Disclosure Statement") and provide Buyer with a completed Property Information Sheet ("Property Information Sheet") concerning the Property, duly executed by or on behalf of Seller in the current form or equivalent to that published by the AIR within 10 cu- days following the Date of Agreement. Buyer has 10 days from the receipt of said disclosures to approve or disapprove the matters disclosed. (b) Physical Inspection. Buyer has 1.0-cr_ 30 days following the receipt of the Property Information Sheet or the Date of Agreement, whichever is later, to satisfy itself with regard to the physical aspects and size of the Property. (c) Hazardous Substance Conditions Report. Buyer has 30 of days following the receipt of the Property Information Sheet or the Date of Agreement, whichever is later, to satisfy itself with regard to the environmental aspects of the Property. Seller recommends that Buyer obtain a Hazardous Substance Conditions Report concerning the Property and relevant adjoining properties. Any such report shall be paid for by Buyer. A "Hazardous Substance" for purposes of this Agreement is defined as any substance whose nature and/or quantity of existence, use, manufacture, disposal or effect, render it subject to Federal, state or local regulation, investigation, remediation or removal as potentially injurious to public health or welfare. A "Hazardous Substance Condition" for purposes of this Agreement is defined as the existence on, under or relevantly adjacent to the Property of a Hazardous Substance that would require remediation and/or removal under applicable Federal, state or local law. (d) Soillnspection. Buyer has 30 cr days from the receipt of the Property Information Sheet or the Date of Agreement, whichever is later, to satisfy itself with regard to the condition of the soils on the Property. Seller recommends that Buyer obtain a soil test report. Any such report shall be paid for by Buyer. Seller shall provide Buyer copies of any soils report that Seller may have within 10 days following the Date of Agreement. (e) Governmental Approvals. Buyer has 30 or days following the Date of Agreement to satisfy itself with regard to approvals and permits from governmental agencies or departments which have or may have jurisdiction over the Property and which Buyer deems necessary or desirable in connection with its intended use of the Property, including, but not limited to, permits and approvals required with respect to zoning, planning, building and safety, fire, police, handicapped and Americans with Disabilities Act requirements, transportation and environmental matters. (f) Conditions of Title. Escrow Holder shall cause a current commitment for title insurance ("Title Commitment") concerning the Property issued by the Title Company, as well as legible copies of all documents referred to in the Title Commitment ("Underlying Documents"), and a scaled and dimensioned plot showing Ithe location of any easements to be delivered to Buyer within 10 cr days following the Date of Agreement. Buyer has 10 days from the receipt of the Title Commitment, the Underlying Documents and the plot plan to satisfy itself with regard to the condition of title. The disapproval by Buyer of any monetary encumbrance, which by the terms of this Agreement is not to remain against the Property after the Closing, shall not be considered a failure of this contingency, as Seller shall have the obligation, at Seller's expense, to satisfy and remove such disapproved monetary encumbrance at or before the Closing. (g) Survey. Buyer has 30 cr- days following the receipt of the Title Commitment and Underlying Documents to satisfy itself with regard to any ALTA title supplement based upon a survey prepared to American Land Title Association ("ALTA") standards for an owner's policy by a licensed surveyor, showing the legal description and boundary lines of the Property, any easements of record, and any improvements, poles, structures and things located within 10 feet of either side of the Property boundary lines. Any such survey shall be prepared at Buyer's direction and expense. If Buyer has obtained a survey and approved the ALTA title supplement, Buyer may elect within the period allowed for Buyer's approval of a survey to have an ALTA extended coverage owner's form of title policy, in which event Buyer shall pay any additional premium attributable thereto. (h) Existing Leases and Tenancy Statements. Seller shall within 10 er days following the Date of Agreement provide both Buyer and Escrow Holder with legible copies of all leases, subleases or rental arrangements (collectively, "Existing Leases") affecting the Property, and with a tenancy statement ("Estoppel Certificate") in the latest form or equivalent to that published by the AIR, executed by Seller and/or each tenant and subtenant of the Property. Seller shall use its best efforts to have each tenant complete and execute an Estoppel Certificate. If any tenant fails or refuses to provide an Estoppel Certificate then Seller shall complete and execute an Estoppel Certificate for that tenancy. Buyer has 10 days from the receipt of said Existing Leases and Estoppel Certificates to satisfy itself with regard to the Existing Leases and any other tenancy issues. (i) Owner's Association. Seller shall within 10 cc days following the Date of Agreement provide Buyer with a statement and transfer package from any owner's association servicing the Property. Such transfer package shall at a minimum include: copies of the association's bylaws, articles of incorporation, current budget and financial statement. Buyer has 10 days from the receipt of such documents to satisfy itself with regard to the association. (j) Other Agreements. Seller shall within 10 cn days following the Date of Agreement provide Buyer with legible copies of all other agreements ("Other Agreements") known to Seller that will affect the Property after Closing. Buyer has 10 days from the receipt of said Other Agreements to satisfy itself with regard to such Agreements. (k) Financing. If paragraph 5 hereof dealing with a financing contingency has not been stricken, the satisfaction or waiver of such New Loan contingency. Iq wS" logu,b t^Pia, of tha E,,:rn..g nlcraS E,.:sp^B peed, of rr.,,r a^d rdarad agraa ^a^rs (rollecn..aly, "r ^an Mc.....avts") w w"icb the er^W'W vnp rani^ u''bjac• •ha „^Pau P,I^r;P� r.-a,^ra rs.a r,,rrawt,iatar-0 y:piSYh.y �^ r^^^acn^^ v,:•s, s,.cs, Ica^ B..yar "ae 10 Or w,•l, ra0ard •^ a Irh fin n 'n8 R ,yar a ^IJiBan^ • rl^r ,c r^^d'ti"^ad ,ir ,. A. ,ya, I.aino anla r^ r„rrkaea rl.a a.npa.•y ,.,irl.n„• arralarannn nr rAanga ,^ rna rarmc c ra.ry yary a o„rr:,ara Mc^ay Nc*attic^ Saua•s�au m th:^ 1^ cr (m) Personal Property. In the event that any personal property is included in the Purchase Price, Buyer has 10 cc days following the Date of Agreement to satisfy itself with regard to the title condition of such personal property. Seller recommends that Buyer obtain a UCC-1 report. Any such report shall be paid for by Buyer. Seller shall provide Buyer copies of any liens or encumbrances affecting such personal property that it is aware of within 10 94 days following the Date of Agreement. (n) Destruction, Damage or Loss. Subsequent to the Date of Agreement and prior to Closing there shall not have occurred a destruction of, or damage or loss to, the Property or any portion thereof, from any cause whatsoever, which would cost more than $10,000.00 to repair or cure. If the cost of repair or cure is $10,000.00 or less, Seller shall repair or cure the loss prior to the Closing. Buyer shall have the option, within 10 days after receipt of written notice of a loss costing more than $10,000.00 to repair or cure, to either terminate this Agreement or to purchase the Property notwithstanding such loss, but without deduction or offset against the Purchase Price. If the cost to repair or cure is more than $10,000.00, and Buyer does not elect to terminate this Agreement, Buyer shall be entitled to any insurance proceeds applicable to such loss. Unless otherwise notified in writing, Escrow Holder shall assume no such destruction, damage or loss has occurred prior to Closing. (o) Material Change. Buyer shall have 10 days following receipt of written notice of a Material Change within which to satisfy itself with regard to such change. "Material Change" shall mean a substantial adverse change in the use, occupancy, tenants, title, or condition of the Property that occurs after the date of this offer and prior to the Closing. Unless otherwise notified in writing, Escrow Holder shall assume that no Material Change has occurred prior to the Closing. (p) Seller Performance. The delivery of all documents and the due performance by Seller of each and every undertaking and agreement to be performed by Seller under this Agreement. (q) Brokerage Fee. Payment at the Closing of such brokerage fee as is specified in this Agreement or later written instructions to Escrow Holder executed by Seller and Brokers ("Brokerage Fee"). It is agreed by the Parties and Escrow Holder that Brokers are a third party beneficiary of this Agreement insofar ache Page 3 of 8 INITIALS Last Edited: 5/2/2018 4:48 PM INITI▪ A▪ L▪ S © 2017 AIR CRE. All Rights Reserved. OFA-20.00, Revised 01-03-2017 Attachment No. 1 Brokerage Fee is concerned, and that no change shall be made with respect to the payment of the Brokerage Fee specified in this Agreement, without the written consent of Brokers. 9.2 All of the contingencies specified in subparagraphs (a) through (m) of paragraph 9.1 are for the benefit of, and may be waived by, Buyer, and may be elsewhere herein referred to as "Buyer's Contingencies." 9.3 If any of Buyer's Contingencies or any other matter subject to Buyer's approval is disapproved as provided for herein in a timely manner ("Disapproved Item"), Seller shall have the right within 10 days following the receipt of notice of Buyer's disapproval to elect to cure such Disapproved Item prior to the Expected Closing Date ("Seller's Election"). Seller's failure to give to Buyer within such period, written notice of Seller's commitment to cure such Disapproved Item on or before the Expected Closing Date shall be conclusively presumed to be Seller's Election not to cure such Disapproved Item. If Seller elects, either by written notice or failure to give written notice, not to cure a Disapproved Item, Buyer shall have the right, within 10 days after Seller's Election to either accept title to the Property subject to such Disapproved Item, or to terminate this Agreement. Buyer's failure to notify Seller in writing of Buyer's election to accept title to the Property subject to the Disapproved Item without deduction or offset shall constitute Buyer's election to terminate this Agreement. The above time periods only apply once for each Disapproved Item. Unless expressly provided otherwise herein, Seller's right to cure shall not apply to the remediation of Hazardous Substance Conditions or to the Financing Contingency. Unless the Parties mutually instruct otherwise, if the time periods for the satisfaction of contingencies or for Seller's and Buyer's elections would expire on a date after the Expected Closing Date, the Expected Closing Date shall be deemed extended for 3 business days following the expiration of: (a) the applicable contingency period(s), (b) the period within which the Seller may elect to cure the Disapproved Item, or (c) if Seller elects not to cure, the period within which Buyer may elect to proceed with this transaction, whichever is later. 9.4 The Parties acknowledge that extensive local, state and Federal legislation establish broad liability upon owners and/or users of real property for the investigation and remediation of Hazardous Substances. The determination of the existence of a Hazardous Substance Condition and the evaluation of the impact of such a condition are highly technical and beyond the expertise of Brokers. The Parties acknowledge that they have been advised by Brokers to consult their own technical and legal experts with respect to the possible presence of Hazardous Substances on the Property or adjoining properties, and Buyer and Seller are not relying upon any investigation by or statement of Brokers with respect thereto. The Parties hereby assume all responsibility for the impact of such Hazardous Substances upon their respective interests herein. 10. Documents Required at or Before Closing. 10.1 Five days prior to the Closing date Escrow Holder shall obtain an updated Title Commitment concerning the Property from the Title Company and provide copies thereof to each of the Parties. 10.2 Seller shall deliver to Escrow Holder in time for delivery to Buyer at the Closing: (a) Grant or general warranty deed, duly executed and in recordable form, conveying fee title to the Property to Buyer. (b) If applicable, the Beneficiary Statements concerning Existing Note(s). (c) If applicable, the Existing Leases and Other Agreements together with duly executed assignments thereof by Seller and Buyer. The assignment of Existing Leases shall be on the most recent Assignment and Assumption of Lessor's Interest in Lease form published by the AIR or its equivalent. (d) If applicable, Estoppel Certificates executed by Seller and/or the tenant(s) of the Property. (e) An affidavit executed by Seller to the effect that Seller is not a "foreign person" within the meaning of Internal Revenue Code Section 1445 or successor statutes. If Seller does not provide such affidavit in form reasonably satisfactory to Buyer at least 3 business days prior to the Closing, Escrow Holder shall at the Closing deduct from Seller's proceeds and remit to the Internal Revenue Service such sum as is required by applicable Federal law with respect to purchases from foreign sellers. (f) If the Property is located in California, an affidavit executed by Seller to the effect that Seller is not a "nonresident" within the meaning of California Revenue and Tax Code Section 18662 or successor statutes. If Seller does not provide such affidavit in form reasonably satisfactory to Buyer at least 3 business days prior to the Closing, Escrow Holder shall at the Closing deduct from Seller's proceeds and remit to the Franchise Tax Board such sum as is required by such statute. (g) If applicable, a bill of sale, duly executed, conveying title to any included personal property to Buyer. (h) If the Seller is a corporation, a duly executed corporate resolution authorizing the execution of this Agreement and the sale of the Property. 10.3 Buyer shall deliver to Seller through Escrow: (a) The cash portion of the Purchase Price and such additional sums as are required of Buyer under this Agreement shall be deposited by Buyer with Escrow Holder, by federal funds wire transfer, or any other method acceptable to Escrow Holder in immediately collectable funds, no later than 2:00 P.M. on the business day prior to the Expected Closing Date provided, however, that Buyer shall not be required to deposit such monies into Escrow if at the time set for the deposit of such monies Seller is in default or has indicated that it will not perform any of its obligations hereunder. Instead, in such circumstances in order to reserve its rights to proceed Buyer need only provide Escrow with evidence establishing that the required monies were available. (b) If a Purchase Money Note and Purchase Money Deed of Trust are called for by this Agreement, the duly executed originals of those documents, the Purchase Money Deed of Trust being in recordable form, together with evidence of fire insurance on the improvements in the amount of the full replacement cost naming Seller as a mortgage loss payee, and a real estate tax service contract (at Buyer's expense), assuring Seller of notice of the status of payment of real property taxes during the life of the Purchase Money Note. (c) The Assignment and Assumption of Lessor's Interest in Lease form specified in paragraph 10.2(c) above, duly executed by Buyer. (d) Assumptions duly executed by Buyer of the obligations of Seller that accrue after Closing under any Other Agreements. (e) If applicable, a written assumption duly executed by Buyer of the loan documents with respect to Existing Notes. (f) If the Buyer is a corporation, a duly executed corporate resolution authorizing the execution of this Agreement and the purchase of the Property. 10.4 At Closing, Escrow Holder shall cause to be issued to Buyer a standard coverage (or ALTA extended, if elected pursuant to 9.1(g)) owner's form policy of title insurance effective as of the Closing, issued by the Title Company in the full amount of the Purchase Price, insuring title to the Property vested in Buyer, subject only to the exceptions approved by Buyer. In the event there is a Purchase Money Deed of Trust in this transaction, the policy of title insurance shall be a joint protection policy insuring both Buyer and Seller. IMPORTANT: IN A PURCHASE OR EXCHANGE OF REAL PROPERTY, IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED. A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING. 11. Prorations and Adjustments. 11.1 Taxes. Applicable real property taxes and special assessment bonds shall be prorated through Escrow as of the date of the Closing, based upon the latest tax bill available. The Parties agree to prorate as of the Closing any taxes assessed against the Property by supplemental bill levied by reason of events occurring prior to the Closing. Payment of the prorated amount shall be made promptly in cash upon receipt of a copy of any supplemental bill. 11.2 Insurance. WARNING: Any insurance which Seller may have maintained will terminate on the Closing. Buyer is advised to obtain appropriate insurance to cover the Property. 11.3 Rentals, Interest and Expenses. Scheduled rentals, interest on Existing Notes, utilities, and operating expenses shall be prorated as of the date of Closing. The Parties agree to promptly adjust between themselves outside of Escrow any rents received after the Closing. 11.4 Security Deposit. Security Deposits held by Seller shall be given to Buyer as a credit to the cash required of Buyer at the Closing. 11.5 Post Closing Matters. Any item to be prorated that is not determined or determinable at the Closing shall be promptly adjusted by the Parties by appropriate cash payment outside of the Escrow when the amount due is determined. 11.6 Variations in Existing Note Balances. In the event that Buyer is purchasing the Property subject to an Existing Deed of Trust(s), and in the event that a Beneficiary Statement as to the applicable Existing Note(s) discloses that the unpaid principal balance of such Existing Note(s) at the closing will be more or less than the amount set forth in paragraph 3.1(c) hereof ("Existing Note Variation"), then the Purchase Money Note(s) shall be reduced or increased by an amount equal to such Existing Note Variation. If there is to be no Purchase Money Note, the cash required at the Closing per paragraph 3.1(a) shall be reduced or increased by the amount of such Existing Note Variation. 11.7 Variations in New Loan Balance. In the event Buyer is obtaining a New Loan and the amount ultimately obtained exceeds the amount set forth in paragraph 5.1, then the amount of the Purchase Money Note, if any, shall be reduced by the amount of such excess. 11.8 Owner's Association Fees. Escrow Holder shall: (i) bring Seller's account with the association current and pay any delinquencies or transfer fees from Seller's proceeds, and (ii) pay any up front fees required by the association from Buyer's funds. 12. Representations and Warranties of Seller and Disclaimers. 12.1 Seller's warranties and representations shall survive the Closing and delivery of the deed for a period of 3 years, and any lawsuit or action based upon them must be commenced within such time period. Seller's warranties and representations are true, material and relied upon by Buyer and Brokers in all respects. Seller hereby makes the following warranties and representations to Buyer and Brokers: (a) Authority of Seller. Seller is the owner of the Property and/or has the full right, power and authority to sell, convey and transfer the Property to Buyer as provided herein, and to perform Seller's obligations hereunder. (b) Maintenance During Escrow and Equipment Condition AtClosing. Except as otherwise provided in paragraph 9.1(n) hereof, Seller shall mainta in th Property until the Closing in its present condition, ordinary wear and tear excepted. yC5.7l ev1 Page 4 of 8 �f 1 J INITIALS Last Edited: 5/2/2018 4:48 PM INITIALS © 2017 AIR CRE. All Rights Reserved. OFA-20.00, Revised 01-03-2017 Attachment No. 1 (c) Hazardous Substances/Storage Tanks. Seller has no knowledge, except as otherwise disclosed to Buyer in writing, of the existence or prior existence on the Property of any Hazardous Substance, nor of the existence or prior existence of any above or below ground storage tank. (d) Complionce. Seller has no knowledge of any aspect or condition of the Property which violates applicable laws, rules, regulations, codes or covenants, conditions or restrictions, or of improvements or alterations made to the Property without a permit where one was required, or of any unfulfilled order or directive of any applicable governmental agency or casualty insurance company requiring any investigation, remediation, repair, maintenance or improvement be performed on the Property. (e) Changes in Agreements. Prior to the Closing, Seller will not violate or modify any Existing Lease or Other Agreement, or create any new leases or other agreements affecting the Property, without Buyer's written approval, which approval will not be unreasonably withheld. (f) Possessory Rights. Seller has no knowledge that anyone will, at the Closing, have any right to possession of the Property, except as disclosed by this Agreement or otherwise in writing to Buyer. (g) Mechanics' Liens. There are no unsatisfied mechanics' or materialmens' lien rights concerning the Property. (h) Actions, Suits or Proceedings. Seller has no knowledge of any actions, suits or proceedings pending or threatened before any commission, board, bureau, agency, arbitrator, court or tribunal that would affect the Property or the right to occupy or utilize same. (i) Notice of Changes. Seller will promptly notify Buyer and Brokers in writing of any Material Change (see paragraph 9.1(o)) affecting the Property that becomes known to Seller prior to the Closing. (j) No Tenant Bankruptcy Proceedings. Seller has no notice or knowledge that any tenant of the Property is the subject of a bankruptcy or insolvency proceeding. (k) No Seller Bankruptcy Proceedings. Seller is not the subject of a bankruptcy, insolvency or probate proceeding. (I) Personal Property. Seller has no knowledge that anyone will, at the Closing, have any right to possession of any personal property included in the Purchase Price nor knowledge of any liens or encumbrances affecting such personal property, except as disclosed by this Agreement or otherwise in writing to Buyer. 12.2 Buyer hereby acknowledges that, except as otherwise stated in this Agreement, Buyer is purchasing the Property in its existing condition and will, by the time called for herein, make or have waived all inspections of the Property Buyer believes are necessary to protect its own interest in, and its contemplated use of, the Property. The Parties acknowledge that, except as otherwise stated in this Agreement, no representations, inducements, promises, agreements, assurances, oral or written, concerning the Property, or any aspect of the occupational safety and health laws, Hazardous Substance laws, or any other act, ordinance or law, have been made by either Party or Brokers, or relied upon by either Party hereto. 12.3 In the event that Buyer learns that a Seller representation or warranty might be untrue prior to the Closing, and Buyer elects to purchase the Property anyway then, and in that event, Buyer waives any right that it may have to bring an action or proceeding against Seller or Brokers regarding said representation or warranty. 12.4 Any environmental reports, soils reports, surveys, and other similar documents which were prepared by third party consultants and provided to Buyer by Seller or Seller's representatives, have been delivered as an accommodation to Buyer and without any representation or warranty as to the sufficiency, accuracy, completeness, and/or validity of said documents, all of which Buyer relies on at its own risk. Seller believes said documents to be accurate, but Buyer is advised to retain appropriate consultants to review said documents and investigate the Property. 13. Possession. Possession of the Property shall be given to Buyer at the Closing subject to the rights of tenants under Existing Leases. 14. Buyer's Entry. At any time during the Escrow period, Buyer, and its agents and representatives, shall have the right at reasonable times and subject to rights of tenants, to enter upon the Property for the purpose of making inspections and tests specified in this Agreement. No destructive testing shall be conducted, however, without Seller's prior approval which shall not be unreasonably withheld. Following any such entry or work, unless otherwise directed in writing by Seller, Buyer shall return the Property to the condition it was in prior to such entry or work, including the re -compaction or removal of any disrupted soil or material as Seller may reasonably direct. All such inspections and tests and any other work conducted or materials furnished with respect to the Property by or for Buyer shall be paid for by Buyer as and when due and Buyer shall indemnify, defend, protect and hold harmless Seller and the Property of and from any and all claims, liabilities, losses, expenses (including reasonable attorneys' fees), damages, including those for injury to person or property, arising out of or relating to any such work or materials or the acts or omissions of Buyer, its agents or employees in connection therewith. 15. Further Documents and Assurances. The Parties shall each, diligently and in good faith, undertake all actions and procedures reasonably required to place the Escrow in condition for Closing as and when required by this Agreement. The Parties agree to provide all further information, and to execute and deliver all further documents, reasonably required by Escrow Holder or the Title Company. 16. Attorneys' Fees. If any Party or Broker brings an action or proceeding (including arbitration) involving the Property whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys' fees and costs. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment. The term "Prevailing Party" shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense. The attorneys' fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys' fees reasonably incurred. 17. Prior Agreements/Amendments. 17.1 This Agreement supersedes any and all prior agreements between Seller and Buyer regarding the Property. 17.2 Amendments to this Agreement are effective only if made in writing and executed by Buyer and Seller. 18. Broker's Rights. 18.1 If this sale is not consummated due to the default of either the Buyer or Seller, the defaulting Party shall be liable to and shall pay to Brokers the Brokerage Fee that Brokers would have received had the sale been consummated. If Buyer is the defaulting party, payment of said Brokerage Fee is in addition to any obligation with respect to liquidated or other damages. 18.2 Upon the Closing, Brokers are authorized to publicize the facts of this transaction. 19. Notices. 19.1 Whenever any Party, Escrow Holder or Brokers herein shall desire to give or serve any notice, demand, request, approval, disapproval or other communication, each such communication shall be in writing and shall be delivered personally, by messenger, or by mall, postage prepaid, to the address set forth in this agreement or by facsimile transmission, electronic signature, digital signature, or email. 19.2 Service of any such communication shall be deemed made on the date of actual receipt if personally delivered, or transmitted by facsimile transmission, electronic signature, digital signature, or email. Any such communication sent by regular mail shall be deemed given 48 hours after the same is mailed. Communications sent by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed delivered 24 hours after delivery of the same to the Postal Service or courier. If such communication is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day. 19.3 Any Party or Broker hereto may from time to time, by notice in writing, designate a different address to which, or a different person or additional persons to whom, all communications are thereafter to be made. 20. Duration of Offer. 20.1 If this offer is not accepted by Seller on or before 5:00 P.M. according to the time standard applicable to the city of San Diego on the date of May 9, 2018 it shall be deemed automatically revoked. 20.2 The acceptance of this offer, or of any subsequent counteroffer hereto, that creates an agreement between the Parties as described in paragraph 1.2, shall be deemed made upon delivery to the other Party or either Broker herein of a duly executed writing unconditionally accepting the last outstanding offer or counteroffer. 21. LIQUIDATED DAMAGES. (This Liquidated Damages paragraph is applicable only if initialed by both Parties/. THE PARTIES AGREE THAT IT WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX, PRIOR TO SIGNING THIS AGREEMENT, THE ACTUAL DAMAGES WHICH WOULD BE SUFFERED BY SELLER IF BUYER FAILS TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT. THEREFORE, IF, AFTER THE SATISFACTION OR WAIVER OF ALL CONTINGENCIES PROVIDED FOR THE BUYER'S BENEFIT, BUYER BREACHES THIS AGREEMENT, SELLER SHALL BE ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF $ 30, 000 . UPON PAYMENT OF SAID SUM TO SELLER, BUYER SHALL BE RELEASED FROM ANY FURTHER LIABILITY TO SELLER, AND ANY ESCROW CANCELLATION FEES AND TITLE COMPANY CHARGES SHALL BE PAID BY SELLER. -! avi Page 5 of 8 INITIALS Last Edited: 5/2/2018 4:48 PM INITIALS co 2017 AIR CRE. All Rights Reserved. OFA-20.00, Revised 01-03-2017 f,..g No. 1 Buyer's Initials Seller's Initials 22. ARBITRATION OF DISPUTES. (This Arbitration of Disputes paragraph is applicable only if initialed by both Parties.) 22.1 ANY CONTROVERSY AS TO WHETHER SELLER IS ENTITLED TO THE LIQUIDATED DAMAGES AND/OR BUYER IS ENTITLED TO THE RETURN OF DEPOSIT MONEY, SHALL BE DETERMINED BY BINDING ARBITRATION BY, AND UNDER THE COMMERCIAL RULES OF THE AMERICAN ARBITRATION ASSOCIATION ("COMMERCIAL RULES"). ARBITRATION HEARINGS SHALL BE HELD IN THE COUNTY WHERE THE PROPERTY IS LOCATED. THE NUMBER OF ARBITRATORS SHALL BE AS PROVIDED IN THE COMMERCIAL RULES AND EACH SUCH ARBITRATOR SHALL BE AN IMPARTIAL REAL ESTATE BROKER WITH AT LEAST 5 YEARS OF FULL TIME EXPERIENCE IN BOTH THE AREA WHERE THE PROPERTY IS LOCATED AND THE TYPE OF REAL ESTATE THAT 15 THE SUBJECT OF THIS AGREEMENT. THE ARBITRATOR OR ARBITRATORS SHALL BE APPOINTED UNDER THE COMMERCIAL RULES. AND SHALL HEAR AND DETERMINE SAID CONTROVERSY IN ACCORDANCE WITH APPLICABLE LAW, THE INTENTION OF THE PARTIES AS EXPRESSED IN THIS AGREEMENT AND ANY AMENDMENTS THERETO, AND UPON THE EVIDENCE PRODUCED AT AN ARBITRATION HEARING. PRE -ARBITRATION DISCOVERY SHALL BE PERMITTED IN ACCORDANCE WITH THE COMMERCIAL RULES OR STATE LAW APPLICABLE TO ARBITRATION PROCEEDINGS. THE AWARD SHALL BE EXECUTED BY AT LEAST 2 OF THE 3 ARBITRATORS, BE RENDERED WITHIN 30 DAYS AFTER THE CONCLUSION OF THE HEARING, AND MAY INCLUDE ATTORNEYS' FEES AND COSTS TO THE PREVAILING PARTY PER PARAGRAPH 16 HEREOF. JUDGMENT MAY BE ENTERED ON THE AWARD IN ANY COURT OF COMPETENT JURISDICTION NOTWITHSTANDING THE FAILURE OF A PARTY DULY NOTIFIED OF THE ARBITRATION HEARING TO APPEAR THEREAT. 22.2 BUYER'S RESORT TO OR PARTICIPATION IN SUCH ARBITRATION PROCEEDINGS SHALL NOT BAR SUIT IN A COURT OF COMPETENT JURISDICTION BY THE BUYER FOR DAMAGES AND/OR SPECIFIC PERFORMANCE UNLESS AND UNTIL THE ARBITRATION RESULTS IN AN AWARD TO THE SELLER OF LIQUIDATED DAMAGES, IN WHICH EVENT SUCH AWARD SHALL ACT AS A BAR AGAINST ANY ACTION BY BUYER FOR DAMAGES AND/OR SPECIFIC PERFORMANCE. 22.3 NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS SUCH RIGHTS ARE SPECIFICALLY INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY. WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATT S INCLUDE N THE "ARBITRATION OF DISPUTES" PROVISION TO NEUTRAL ARBITRATION. G "a • I a�� Buyer's Initials Seller's Initials 23. Miscellaneous. 23.1 Binding Effect. This Agreement shall be binding on the Parties without regard to whether or not paragraphs 21 and 22 are initialed by both of the Parties. Paragraphs 21 and 22 are each incorporated into this Agreement only if initialed by both Parties at the time that the Agreement is executed. 23.2 Applicable Law. This Agreement shall be governed by, and paragraph 22.3 is amended to refer to, the laws of the state in which the Property is located. Any litigation or arbitration between the Parties hereto concerning this Agreement shall be initiated in the county in which the Property is located. 23.3 Time of Essence. Time is of the essence of this Agreement. 23.4 Counterparts. This Agreement may be executed by Buyer and Seller in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Escrow Holder, after verifying that the counterparts are identical except for the signatures, is authorized and instructed to combine the signed signature pages on one of the counterparts, which shall then constitute the Agreement. 23.5 Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT. 23.6 Conflict. Any conflict between the printed provisions of this Agreement and the typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions. Seller and Buyer must initial any and all handwritten provisions. 23.7 1031 Exchange. Both Seller and Buyer agree to cooperate with each other in the event that either or both wish to participate in a 1031 exchange. Any party initiating an exchange shall bear all costs of such exchange. The cooperating Party shall not have any liability (special or otherwise) for damages to the exchanging Party in the event that the sale is delayed and/or that the sale otherwise fails to qualify as a 1031 exchange. 23.8 Days. Unless otherwise specifically indicated to the contrary, the word "days" as used in this Agreement shall mean and refer to calendar days. 24. Disclosures Regarding The Nature of a Real Estate Agency Relationship. 24.1 The Parties and Brokers agree that their relationship(s) shall be governed by the principles set forth in the applicable sections of the California Civil Code, as summarized in paragraph 24.2. 24.2 When entering into a discussion with a real estate agent regarding a real estate transaction, a Buyer or Seller should from the outset understand what type of agency relationship or representation it has with the agent or agents in the transaction. Buyer and Seller acknowledge being advised by the Brokers in this transaction, as follows: (a) Seller's Agent. A Seller's agent under a listing agreement with the Seller acts as the agent for the Seller only. A Seller's agent or subagent has the following affirmative obligations: (1) To the Seller: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Seller. (2) To the Buyer and the Seller: a. Diligent exercise of reasonable skills and care in performance of the agent's duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the Parties. An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above. (h) Buyer's Agent. A selling agent can, with a Buyer's consent, agree to act as agent for the Buyer only. In these situations, the agent is not the Seller's agent, even if by agreement the agent may receive compensation for services rendered, either in full or in part from the Seller. An agent acting only for a Buyer has the following affirmative obligations. (1) To the Buyer: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Buyer. (2) To the Buyer and the Seller: a. Diligent exercise of reasonable skills and care in performance of the agent's duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the Parties. An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above. (c) Agent Representing Both Seller and Buyer. A real estate agent, either acting directly or through one or more associate licenses, can legally be the agent of both the Seller and the Buyer in a transaction, but only with the knowledge and consent of both the Seller and the Buyer. (1) In a dual agency situation, the agent has the following affirmative obligations to both the Seller and the Buyer: a. A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either Seller or the Buyer. b. Other duties to the Seller and the Buyer as stated above in their respective sections (a) or (b) of this paragraph 24.2. (2) In representing both Seller and Buyer, the agent may not without the express permission of the respective Party, disclose to the other Party that the Seller will accept a price less than the listing price or that the Buyer will pay a price greater than the price offered. (3) The above duties of the agent in a real estate transaction do not relieve a Seller or Buyer from the responsibility to protect their own interests. Buyer and Seller should carefully read all agreements to assure that they adequately express their understanding of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advice is desired, consult a competent professional. (d) Further Disclosures. Throughout this transaction Buyer and Seller may receive more than one disclosure, depending upon the number of agents assisting in the transaction. Buyer and Seller should each read its contents each time it is presented, considering the relationship between them and the real estate agent in this transaction and that disclosure. Buyer and Seller each acknowledge receipt of a disclosure of the possibility of multiple representation by the Broker representing that principal. This disclosure may be part of a listing agreement, buyer representation agreement or separate document. Buyer understands that Broker representing Buyer may also represent other potential buyers, who may consider, make offers on or ultimately acquire the Property. Seller understands that Broker representing Seller may also represent other sellers with competing properties that may be of interest to this Buyer. Brokers have no responsibility with respect to any default or breach hereof by either Party. The Parties agree that no lawsuit or other legal proceeding involving any breach of duty, error or omission relating to this transaction may be brought against Broker more than one year after the Date of Agreement and that the liability (including court costs and attomeys' fees), of any Broker with respect to any breach of duty, error or omission relating to this Agreement shall not exceed the fee received by such Broker pursuant to this Agreement; provided, however, that the foregoing limitation on each Broker's liability shall not be applicable to any gross negligence or willful misconduct of such Broker. 24.3 Confidential Information. Buyer and Seller agree to identify to Brokers as "Confidential" any communication or information given Brokers that is considered by such Party to be confidential. Page 6 of 8 INITIALS Last Edited: 5/2/2018 4:48 PM INITIALS © 2017AIR CRE. All Rights Reserved. OFA-20.00, Revised 01-03-2017 Attachment No. 1 25. Construction of Agreement. In construing this Agreement, all headings and titles are for the convenience of the Parties only and shall not be considered a part of this Agreement. Whenever required by the context, the singular shall include the plural and vice versa. This Agreement shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it. 26. Additional Provisions. Additional provisions of this offer, of any, are as follows or are attached hereto by an addendum or addenda consisting of paragraphs 6 .. . (II there are no additional provisions write'NONr.) 26. All closing costs shall be paid by through ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY AIR CRE OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL LIFECT, OR TAX CONSEQUENCES OF THIS AGREEMENT OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED 70: 1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS AGREEMENT. 2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PROPERTY. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED T0: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PROPERTY, THE INTEGRITY AND CONDITION OF ANY STRUCTURES AND OPERATING SYSTEMS, AND THE SUITABILITY OF THE PROPERTY FOR BUYER'S INTENDED USE. WARNING: IF THE PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THIS AGREEMENT MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS Of THE STATE IN WHICH THE PROPERTY IS LOCATED. NOTE: 1. THIS FORM IS NOT FOR USE IN CONNECTION WITH THE SALE OF RESIDENTIAL PROPERTY. 2. IF EITHER PARTY 15 A CORPORATION, IT IS RECOMMENDED THAT THIS AGREEMENT BE SIGNED BY TWO CORPORATE OFFICERS. The undersigned Buyer offers and agrees to buy the Property on the terms and conditions stated and acknowledges teceipt of a copy hereof. Date. ire t- BUYER BROKER Colliers International CA, Inc., a TLi- i'.tc t: 1.-,r _ tl , r A -,loner Delaware corporation, d/b/a Colliers International By: Name Panted Attn: Mark Lewkowltz Title: Title: First Vice President Phone Fax Address: 4350 La Jolla Villaae Drive. Suite Emad: 500. San Diego. CA 92122 Plan: (858) 677-5361 By Fax: f 858) —795-4161 Name Panted: Etnali: mark.lewkowitz@colliers.com Title: Federall0 No.: Phone Broker/Agent BRE License8: 01785338 Fax: Email: Address. Federal ID No.: 27. Acceptance. 27.1 Seller accepts the foregoing offer to purchase the Property and hereby agrees to sell the Property to Buyer on the terms and conditions therein specified. 27.2 In consideration of real estate brokerage service rendered by Brokers. Seller ll i Id 13t lye r agree: to pay Brokers a real estate Brokerage Fee in a sum equal to 4 %of the Purchase Price to be divided between the Oi111 ICSBsuxi._ as follows Sellers responsibi I Ityasc.io I % and Buyer's responsibiIit 'B...k.r 3 %. This Agreement shall serve as an irrevocable instruction to Escrow Holder to pay such Brokerage Fee to Brokers out of the proceeds accruing to the account of Seller at the Closing. 27.3 Seller actnowledges receipt of a copy hereof and authorizes Brokers to deliver a signed copy to Buyer NOTE: A PROPERTY INFORMATION SHEET 15 REQUIRED TO BE DELIVERED TO BUYER BY SELLER UNDER THIS AGREEMENT, BROKER Date SELLER Colliers International CA, Inc., a `eater amily Trust Delaware corporation, d/b/a Colliers �/+] International By Name Print Ed Se:ILET Attn: Mark Lewkowitz THIe: Titie: First Vice President Phone (614) 417-2250 Fax Address: 4350 La Jolla Villaae Drive. Suite Email: .500 Phone: L858) 677-5361 By. Fax: (858) 795-9161 Name Printed: Pauline "enter k Email: mark.lewkowitz@colliers.com Title: Federal ID No.: Broker/Agent BRE License 8: 01785336 Phone: Fax: Email: Address: 1430 Hoover Avenue. National City, 01950 Federal ID No.: _ Page 7 of 8 INITIALS Last Edited: 5/2/2018 4:48 PM C1 2017 AIR CRE. All Rights Reserved. OFA-20. 00, Revised 01-03-2017 Attachment No. 1 AIR CRE. 500 North Brand Blvd, Suite 900, Glendale, CA 91203, Tel 213-687-8777, Email contracts@aircre.com NOTICE: No part of these works may be reproduced in any form without permission in writing. Page 8 of 8 INITIALS Last Edited: 5/2/2018 4:48 PM INITIALS © 2017 AIR CRE. All Rights Reserved. OFA-20.00, Revised 01-03-2017 Attachment No. 1 AIRCR 1101 ON NMI SELLER'S MANDATORY DISCLOSURE STATEMENT (Required by law on transactions involving non-residential properties in California) DO NOT USE THIS FORM WITH REGARD TO THE SALE OF RESIDENTIAL PROPERTIES This disclosure statement is intended to be a part of the ® STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE (See paragraph 9.1(a) of said document) or ❑ (the "Purchase Agreement") dated -!" 'regarding that certain real property commonly known as (street address, city, state, zip): 1930 Hoover Avenue, National City, C 91950 (the "Property") wherein Senter Family Trust istheSellerand The City of National City or Assignee is the Buyer. Note:This disclosure statement is not designed nor intended to be used in place of the standard Property Information Sheet published BY AIR CRE ("AIR"). Both documents should be used in every transaction involving a sale. In order to comply with State law concerning disclosures to a potential purchaser, Seller elects to: ▪ A. Utilize a report prepared bya professional consultant which has been approved by the AIR, i.e., First American Natural Hazard Disclosures, (800) 527-0027, or1CP Property Disclosure Reports, (800) 748-5233. A copy of their report is attached hereto. (Complete paragraph 8, 9, 10, 12 and 13 and sign this statement in the place provided.) ❑ B. Utilize a report prepared by , with phone number: . A copy of their report is attached hereto. (Complete paragraphs 8, 9 10, 12, and 13, sign this Statement in the place provided, and attach a copy of The Commercial Property Owner's Guide to Earthquake Safety.) • C. Complete this Disclosure Statement without the assistance of a professional consultant. (Complete paragraphs 1 through 13 and sign this Statement in the place provided. Remember to attach a copy of The Commercial Property Owner's Guide to Earthquake Safety.) 1. EARTHQUAKE FAULT ZONES. If the Property is located within a delineated Earthquake Fault Zone (a zone that encompasses a potentially or recently active trace of an earthquake fault that is deemed by the State Geologist to constitute a potential hazard to structures from surface faulting or fault creep), California Public Resources Code §2621 et seq. mandates that prospective purchasers be advised that the Property is located within such a Zone, and that its development may require a geologic report from a state registered geologist. In accordance with such law, Buyer is hereby informed that the Property ❑ is or ❑ is not within a delineated Earthquake Fault Zone. 2. SEISMIC HAZARD ZONES. If the Property is located within a Seismic Hazard Zone as delineated on a map prepared by the California Division of Mines and Geology, California Public Resources Code §2690 et seq. mandates that prospective purchasers be advised that the Property is located within such a Zone. In accordance with such law, Buyer is hereby informed that the Property is or is not within a Seismic Hazard Zone. 3. EARTHQUAKE SAFETY. If (1) the improvements on the Property were constructed prior to 1975, and (2) said improvements include structures with (i) pre -cast (e.g., tilt -up) concrete or reinforced masonry walls together with wood frame floors or roofs or (ii) un reinforced masonry walls, Buyer must be provided with a copy of The Commercial Property Owner's Guide to Earthquake Safety (the "Booklet") published by the California Seismic Safety Commission. Buyer is hereby informed that the Property: ❑ (a) meets the foregoing requirements, and a copy of the Booklet and a completed "Commercial Property Earthquake Weakness Disclosure Report" is attached hereto. Within five business days of Buyer's receipt of said Disclosure Report, Buyer shall deliver a duly countersigned copy of the same to Escrow Holder, with a copy to Seller and Seller's Broker. Escrow Holder is hereby instructed that the Escrow shall not close unless and until Escrow Holder has received the Disclosure Report duly signed by both Seller and Buyer. ❑ (b) does not meet the foregoing requirements requiring the delivery of the Booklet. 4. FIRE PROTECTION. If the Property is located within a designated State Responsibility Area as delineated on a map prepared by the California Department of Forestry, California Public Resources Code §4136 mandates that prospective purchasers be advised that the Property is located within a wildland area which may contain substantial forest fire risks and hazards, that the State may not be responsible to provide fire protection services, and that the Property may be subject to the requirements of Public Resources Code §4291 which requires the periodic removal of brush, the maintenance of firebreaks, and other similar activities. In accordance with such law, Buyer is hereby informed that the Property ❑ is or is not within a designated State Responsibility Area. 5. FIRE HAZARD. If the Property is located within an area designated as a Very High Fire Hazard Severity Zone pursuant to Government Code §51178 et seq, §51183.5 mandates that prospective purchasers be advised that the Property is located within such a zone and that the Property may be subject to various maintenance, design and/or construction requirements and/or restrictions. In accordance with such law, Buyer is hereby informed that the Property ❑ is or gj is not within a designated Very High Fire Hazard Severity Zone. 6. AREA OF POTENTIAL FLOODING. If the Property is located within an area of potential flooding in the event of the failure of a dam as shown on an inundation map designated pursuant to Government Code §8589.5, §8589.4 mandates that prospective purchasers be advised that the Property is located within such an area. In accordance with such law, Buyer is hereby informed that the Property ❑ is or is not within a designated area of potential flooding. 7. FLOOD HAZARD AREAS. If the Property is located within a designated Federal Flood Hazard Area as delineated on a map prepared by the Federal Emergency Management Agency, Federal law, ie. 42 U.S.C. §4104a, mandates that prospective purchasers be advised that the Property is located within an area having special flood hazards and that flood insurance may be required as a condition to obtaining financing. In accordance with such law, Buyer is hereby informed that the Property is or is not within a designated Federal Flood Hazard Area. 8. FLOOD DISASTER INSURANCE. If the Seller or Seller's predecessor -in -interest has previously received Federal flood disaster assistance and said assistance was conditioned upon obtaining and maintaining flood insurance on the Property, Federal law, ie. 42 U.S.C. §5154a, mandates that prospective purchasers be advised that they will be required to maintain such insurance on the Property and that if said insurance is not maintained and the Property is thereafter damaged by a flood disaster, the purchaser may be required to reimburse the Federal Government for the disaster relief provided. Buyer is hereby informed that to the best of the Seller's knowledge Federal flood disaster assistance 0 has or as not been previously received with regard to the Property. Note: if such disaster assistance has been received, the law specifies that the required notice be "contained in documents evidencing the transfer of ownership". 9. WATER HEATER BRACING. If the Property contains one or more water heaters, Seller is required by California Health and Safety Code §19211 to certify to the Buyer that all such water heaters have been braced, strapped and/or anchoredrin accordance with law. Buyer is hereby advised that the required bracing, strapping and/or anchors: have been installed have not been installed, or 54 Seller does not know whether they have been installed. 10. PRESENCE OF MOLD. If the seller or transferor of property knows of the presence of mold that affects the property and the mold either exceeds permissible exposure limits or poses a health threat then Health and Safety Code §26140, et seq. mandates that prospective purchasers be advised in writing of such mold. In accordance with such law, Buyer is hereby informed that the undersigned ❑ does or does not know of the presence of such mold effecting the Property. 11. TITLE INSURANCE. In the event that the Purchase Agreement does not at present provide that title insurance will be obtained, Buyer is strongly urged to consider purchasing such insurance, and, in accordance with California Civil Code §1057.6, is advised as follows: IMPORTANT: IN A PURCHASE OR EXCHANGE OF REAL PROPERTY, IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED. A NEW POLICOF TIT% e 10/ Page 1 of 2 INITIALS Last Edited: 5/2/2018 4:48 PM © 2017 AIR CRE. All Rights Reserved. INITIALS SMD-6.00, Revised 01-03-2017 S Attachment No. 1 INSURANCE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING. 1 AZARDOUS SUBSTANCES. Seller is required by California Health and Safety Code 425359.7 to notify potential buyers of the presence of any hazardous su ance that Seller knows, or has reasonable cause to believe, is located on or beneath the Property. In accordance with such law, Buyer is hereby notified than Seller neither knows nor has reasonable cause to believe that any hazardous substance is on or beneath the Property, or Seller knows or has reasonable cause to believe that the following hazardous substances are on or beneath the Property: 13. OTHER. PLEASE NOTE: While the information contained in or attached to this Disclosure Statement is believed to be accurate as of the date that it was prepared, the applicable laws aryl the areas covered by the various natural hazard zones, etc. can change from time to time. Prior to the close of escrow, Buyer may wish to again check the status of the Property. Also, the city and/or county in which the Property is located may have established natural hazard zones in addition to those listed above. Buyer is advised to check with the appropriate local agency or agencies. The descriptions contained within the above disclosure paragraphs are not intended to be full and complete dissertations of all of the possible ramifications to the Buyer and/or the Property. In the event that this document indicates that the Property is affected by one or more of the disclosures, Buyer is advised to: 1. Review the applicable laws in their entirety. 2. Seek advice of counsel as to the legal consequences of the items disclosed. 3. Retain appropriate consultants to review and investigate the impact of said disclosures. Likewise no representation or recommendation is made BY AIR CRE or by any broker as to the legal sufficiency, legal effect, or consequences of this document or the Purchase Agreement to which it relates. Date: 5/1' r I SELLER Senter Fa v Trus By: • Name Printed: Ed Sente�: Title: -'- RrIL.rrag.J 't Name Printed: Pauline Senter Receipt of the above Seller's Mandatory Disclosure Statement is hereby acknowledged: Date: BUYER The City of National City or Assignee By: Name Printed: Title: AIR CRE. 500 North Brand Blvd, Suite 900, Glendale, CA 91203, Tel 213-687-8777, Email contractstaircre.com NOTICE: No part of these works may be reproduced in any form without permission in writing. Page 2 of 2 INITIALS Last Edited: 5/2/2018 4:48 PM © 2017 AIR CRE. All Rights Reserved. INITIALS SMD-6.00, Revised 01-03-2017 Attachment No. 1 AIRCR 001 PROPERTY INFORMATION SHEET (For the sale or leasing of non-residential properties) PREFACE: Purpose: This Statement is NOT a warranty as to the actual condition of the Property/Premises. The purpose is, instead, to provide the brokers and the potential buyer/lessee with important information about the Property/Premises which is currently in the actual knowledge of the Owner and which the Owner is required by law to disclose. Actual Knowledge: For purposes of this Statement the phrase 'actual knowledge' means: the awareness of a fact, or the awareness of sufficient information and circumstances so as to cause one to believe that a certain situation or condition probably exists. TO WHOM IT MAY CONCERN: Senter Family Trust ("Owner"), owns the Property/Premises commonly known as (street address, city, state, zip) 1930 Hoover Avenue, National City, CA 91950 located in the County of San Diego , and generally described as (describe briefly the nature of the Premises or Property) an approximate 6,400 square foot warehouse situated on a .18 AC lot (hereinafter "Property"), and certifies that: 1. Material Physical Defects. Owner has no actual knowledge of any material physical defects`e Property or any improvements and structures thereon, including, but not limited to the roof, except (if there are no exceptions write "NONE"): _____2 2. Equipment. A. Owner has no actual knowledge that the heating, ventilating, air conditioning, plumbing, loading doors, electrical and lighting systems, life safety systems, security systems and mechanical equipment existing on the Property as of the date hereof, if any, are not in good operating order and condition, except (if there are no exceptions write "NONE"): Nosi"V B. Owner has no actual knowledge of any leases, finan ing agreements, liens or other agreements affecting any equipment which is being included with the Property, except (if there are no exceptions write "NONE"): 3. Soil Conditions. Owner has no actual knowledge that th Property has any slipping, sliding, settling, flooding, ponding or any other grading, drainage or soil problems, except (if there are no exceptions write "NONE"): Mbt4 4. Utilities. Owner represents and warrants that the Property is served b following utilities (check the ropriate boxes sewer system and the cost of installation thereof has been fully paid, [1 private septic system, electricity, L natural gas, domestic water, telephone, and ❑ other: 5. Insurance. ner hasnoactual knowledge of any insurance claims filed regarding the Property during the preceding 3 years, except (if there are no exceptions write "NONE"): O N C. 6. Compliance With Laws. Owner has no actual knowledge of any aspect or condition of the Property which violates applicable laws, rules, regulations, codes, or covenants, conditions or restrictions, or of improvements or alterations made to the Property without a permit where one was required, or of any unfulfilled order or directive of any applicable government agency or of any casualty insurance company that any work of investigation, remediation, repair, maintenance or improvement is to be performed on the Property, except (if there are no exceptions write "NONE"): 1 ^� CFt f-e-r4 ATE 7. Hazardous Substances and Mold. 1 A. Owner has no actual knowledge of the Property ever having been used as a waste dump, of the past or present existence of any above or below ground storage tanks on the Property, or of the current existence on the Property of asbestos, transformers containing PCB's or any hazardous, toxic or infectious substance whose nature and/or quantity of existence, use, manufacture or effect, render it subject to Federal,Ake or local regulation, investigation, remediation or removal as potentially injurious to public health or welfare,except (if there are no exceptions write "NONE"): r"W . B. Owner represents and warrants that it is not currently, and never has been engaged in the business of hauling waste,^and never stored hazardous (.� substances on the Property, except (if there are no exceptions write "NONE"): L ,,t�.r 1 1 Rh 5' `y-y'v'�� p. 1 C. Owner has no actual knowledge of the existence on the Property of hazardous levels any mold or fungi defined as toxic under a' pplical lt? state or Feder ,S.Q�11 1 law, except (if there are no exceptions write "NONE"): AL �. I 8. Fire D z^�age,.. Owner has no actual knowledge of any structure on the Property having suffered material fire damage, except (if there are no exceptions write "NONE"). l/'``_‹. 9. Actions, Suits or Proceedings. Owner has no actual knowledge that any actions, suits or proceedings are pending or threatened before any court, arbitration tribunal, governmental department, commission, board, bureau, agency or instrumentality th t would affect the Property or the right or ability of an owner or tenant to convey, occupy or utilize the Property, except (if there are no exceptions write "NONE"): J' Owner has not served any Notices of Default on any of the tenants of the Property which have not been resolved except (if there are no exceptions write "NONE"): H•• 10. Governmental Proceedings. Owner has no actual knowledge of any existing or contemplated condemnation, environmental, zoning, redevelopment agency plan or other land use regulation proceedings which could detrimentally affect the value, use and operation of the Property, except (if there are no exceptions write "NONE"): ."j6e4fNSE�'�—O pJy'GiT, 11. Unrecorded Title Matters. Owner has no actual knowledge of any encumbrances, covenants, conditions, restrictions, easements, licenses, liens, charges or other matters which affect the title of the Property that are not recorded in the official records of the county recorder where the Property is located, except (if there are no exceptions write "NONE"):a16/4F 12. Leases. Owner has no actual knowledge of any leases, subleases or other tenancy agreements affecting the Property, except (if there are no exceptions write "NONE"): He. 13. Options. Owner has no actual knowledge of any options to purchase, rights of first refusal, rights of first offer or other similar agreements affecting the Property, except (if there are no exceptions write"NONE"): NoE. 14. Short Sale/Foreclosure. The ability of the Owner to complete a sale of the Property ❑ is contingent a is not contingent upon obtaining the consent of one or more lenders to conduct a 'short sale', ie. a sale for less that the amount owing on the Property. (This paragraph only needs to be completed if this Property Information Sheet is being completed in connection with the proposed sale of the Property) One or more of any loans secured by the Property is is not in foreclosure. 15. Energy Efficiency. The Property ❑ has L' has not been granted an energy efficiency rating or certification such as one from the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) or [ Seller/Lessor does not know if the Property has been granted such a rating or certificate. If such a rating or certification has been obtained please describe the rating or certification and provide the name of the organization that granted it: 16. Other. (It will be presumed that there are no additional items which warrant disclosure unless they are set forth herein): Page 1 of 2 INITIALS Last Edited: 5/2/2018 4:48 PM INITI 60 2017 AIR CRE. All Rights Reserved. PI-8.01, Revised 11-01-2017 Attachment No. 1 The statements herein will be relied upon by brokers, buyers, lessees, lenders and others. Therefore, Owner and/or the Owner's Property Manager has reviewed and modified this printed statement as necessary to accurately and completely state all the known material facts concerning the Property. To the extent such modifications are not made, this statement may be relied upon as printed. This statement, however, shall not relieve a buyer or lessee of responsibility for independent investigation of the Property. Owner agrees to promptly notify, in writing, all appropriate parties of any material changes which may occur in the statements contained herein from the date this statement is signed until title to the Property is transferred, or the lease is executed. Date: OWNER (fill in date of execution) . cte Family Trust Name ante✓✓dam__Ed""Seen___ter Title: 'Ti% _131;i et*. By: (/ �.�t,Gr�tn� Tjp• Name Printed: Pauline Senter Buyer/lessee hereby acknowledges receipt of a copy of this Property Information Sheet on . (Fill In date received) BUYER/LESSEE The City of National City or Assignee By: Name Printed: Title AIR CRE. 500 North Brand Blvd, Suite 900, Glendale, CA 91203, Tel 213-687-8777, Email contracts@aircre.com NOTICE: No part of these works may be reproduced in any form without permission in writing. Page 2 of 2 INITIALS Last Edited: 5/2/2018 4:48 PM INITIALS © 2017 AIR CRE. All Rights Reserved. PI-8.01, Revised 11-01-2017 Attachment No. 1 Colliers I.1LR' Please note that the terms "Seller" and "Buyer" are defined by the CA Civil Code to include a lessor and lessee, respectively. This form must be delivered to both parties once the Letter of Intent is prepared, or where a legitimate interest/intent to be bound is shown (e.g. no outstanding negotiations). Date: Seller/Lessor: Buyer/Lessee: Property Name: Street Address, City, State: Further described as: REPRESENTATION CONFIRMATION April 19, 2018 Senter Family Trust The City of National City or Assignee 1430 Hoover Ave 1430 Hoover Ave, National City, CA 91950 an approximate 6,400 square foot warehouse situated on a .18 AC lot A real estate agent, either acting directly or through one or more associate licensees, can legally be the agent of both the Seller and the Buyer in a transaction, but only with the knowledge and consent of both the Seller and the Buyer. In a dual agency situation, the agent has the following affirnsative obligations to both the Seller and the Buyer: (a) A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either the Seller or the Buyer. (b) Other duties to the Seller and the Buyer as stated above in their respective sections. In representing both Seller and Buyer, the agent may not, without the express permission of the respective party, disclose to the other party that the Seller will accept a price less than the listing price or that the Buyer will pay a price greater than the price offered. The above duties of the agent in a real estate transaction do not relieve a Seller or Buyer from the responsibility to protect his or her own interests. You should carefully read all agreements to assure that they adequately express your understanding of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advice is desired, consult a competent professional. Throughout your real property transaction you may receive more than one disclosure form, depending upon the number of agents assisting in the transaction. The law requires each agent with whom you have more than a casual relationship to present you with this disclosure form. You should read its contents each time it is presented to you, considering the relationship between you and the real estate agent in your specific transaction. Colliers International of CA, Inc. Name of Listing Agent (Brokerage Firm) is the agent of (check one): ❑ The seller exclusively; or m Both the buyer and seller. Colliers International of CA, Inc. Name of Selling Agent/Procuring Broker (Brokerage Firm) is the agent of (check one): ❑ The buyer exclusively; or ❑ The seller exclusively; or Both the buyer and seller. SELLEBAbESSOR BY: PRINT NAME: Ed Senter TITLE: SerG BY: PRINT NAME: Pauline Senter TITLE: Ti/t.,AS 11, E. BUYER/LESSEE BY: PRINT NAME: TITLE: Attachment No. 1 Colliers INTERNATIONAL Please note that the terms "Seller" and "Buyer" are defined by the CA Civil Code to include a lessor and lessee, respectively. If you are the Listing Agent —you must deliver the form to the seller/lessor in the Representation Agreement. You must also deliver the form to the buyer/lessee once the Letter of Intent is prepared, or where a legitimate interest/intent to be bound is shown (e.g. no outstanding negotiations). If you are the Buyer's Agent- you must deliver the form to the buyer/lessee in the Representation Agreement. In addition, you must deliver the form to the seller/lessor once the Letter of Intent is prepared, or where a legitimate interest/intent to be bound is shown (e.g. no outstanding negotiations). DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIP (As required by the Civil Code) When you enter into a discussion with a real estate agent regarding a real estate transaction, you should from the outset understand what type of agency relationship or representation you wish to have with the agent in the transaction. SELLER'S AGENT A Seller's agent under a listing agreement with the Seller acts as the agent for the Seller only. A Seller's agent or a subagent of that agent has the following affirmative obligations: To the Seller: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Seller. To the Buyer and the Seller: (a) Diligent exercise of reasonable skill and care in performance of the agent's duties. (b) A duty of honest and fair dealing and good faith. (c) A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the parties. An agent is not obligated to reveal to either party any confidential information obtained from the other party that does not involve the affirmative duties set forth above. BUYER'S AGENT A selling agent can, with a Buyer's consent, agree to act as agent for the Buyer only. In these situations, the agent is not the Seller's agent, even if by agreement the agent may receive compensation for services rendered, either in full or in part from the Seller. An agent acting only for a Buyer has the following affirmative obligations: To the Buyer: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Buyer. To the Buyer and the Seller: (a) Diligent exercise of reasonable skill and care in performance of the agent's duties. (b) A duty of honest and fair dealing and good faith. (c) A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the parties. An agent is not obligated to reveal to either party any confidential infomation obtained from the other party that does not involve the affirmative duties set forth above. AGENT REPRESENTING BOTH SELLER AND BUYER A real estate agent, either acting directly or through one or more associate licensees, can legally be the agent of both the Seller and the Buyer in a transaction, but only with the knowledge and consent of both the Seller and the Buyer. In a dual agency situation, the agent has the following affirmative obligations to both the Seller and the Buyer: (a) A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either the Seller or the Buyer. (b) Other duties to the Seller and the Buyer as stated above in their respective sections. In representing both Seller and Buyer, the agent may not, without the express permission of the respective party, disclose to the other party that the Seller will accept a price less than the listing price or that the Buyer will pay a price greater than the price offered. The above duties of the agent in a real estate transaction do not relieve a Seller or Buyer from the responsibility to protect his or her own interests. You should carefully read all agreements to assure that they adequately express your understanding of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advice is desired, consult a competent professional. Throughout your real property transaction you may receive more than one disclosure form, depending upon the number of agents assisting in the transaction. The law requires each agent with whom you have more than a casual relationship to present you with this disclosure form. You should read its contents each time it is presented to you, considering the relationship between you and the real estate agent in your specific transaction. This disclosure form includes the provisions of Sections 2079.13 to 2079.24, inclusive, of the Civil Code set forth on the reverse hereof. Read it carefully. Colliers International (CA), Inc. Agent Printed Name Associate Licensee Signature Mark Lewkowitz Associate Licensee Printed Name Buyer/Lessee Signature (date) (date) Buyer/I,eisee Printe Name 4. Seller/Lessor Signature Senter Family Trust Z-kS' (date) Seller/Lessor Printed Name Attachment No. 1 2079.13. As used in Sections 2079. 14 to 2079.24, inclusive, the following term have the following meanings (a) "Agent" means e person acting under provisions of Title 9 (commencing with 9ootion 2295) in a real property transaction. and includes a person who is licensed as a real estate broker under Chapter 3 (commencing with Seaton 10130) of Part I of Division 4 of the Business and Professions Code, and under whose license a bating is executed or an offer to purchase is obtained (h) 'Associate licensee" means a person who Is licensed as a real estate broker or salesperson under Chapter 3 (commencing with Section 10130) of Pan 1 of Division 4 of the Business and Professions Cade and who is either licensed under a broker or has entered into a wn0en contract with a broker to set as the broker's agent in connection with acts requiring a real estate license and to function under the broker's supervision m the capamly of an a.s a:raic iicensec. The agent in the real property transaction bears responsihihryy for his or her associate licensees who perform as agents of the agent When an associate licensee owes a duty to any pnncipul. or to any buyer or adler who is not a principal. in a real property transaction, that duty is equivalent to the duty owed to that patty by the broker for whom the associate Iva see functions. (c)'Buyer" means a transferee in a real property transaction, and includes a person who executes an offer to purchase real property from a seller through an agent, or who seeks the semces of an agent in more than a casual. transitory. preliminary manner. wtth the object of entering into a real property transaction " or Buyer" includes vendee or lessee. (d) "Commercial real property -mans all real property in the stale. except single-family residential real property. dwelling units made suhtect to Chapter 2 (commencing with Section 1940) of Title 5, mobilehomes, as defined in Section 799 3, or recreational vehicles, as defined in Section 799 29. te) "Dual agent' means an agent acting, miller directly or through an associate licensee as agent for both the seller and tlx: buyer in a real propene transaction (U "Listing agreement' n en contract between an owner of real property and an agent, by which the agent has been authorizedtosell the real property or to find or obtain a buyer. (g) "Listing agent' means a person who has obtained a listing of real property to act as an agent for empensetian. (h) "Listing price" is the amount expressed in dollars specified in the listing for which the .seller is sdllmg to sell the real properly through the hshng agent. (i) "Offenng price" is the amount expressed in dollars specified in an offer to purchase for which the buyer is willmg to bin' the real proper. (j) "Offer to purchase" means a written amtrad executed by a buyer acting through a selling agent that becomes the contract for the sale of the real property upon acceptance by the seller (k) "Red properly' means any estate specified by subdivision (U or (2) of Section 761 m property that constitutes or is improved with one to four dwelling units, any commercial real pi petty, any leasehold in these types of property exceeding one year's duration, and mwbilohomea, when offered for sale or sold through an agent pursuant to the aulhonty contained in Section 10131 6 of the Business and Professions Code. (I) "Real propene transaction' means a transaction for the sale of real property in which an agent is property that are not known to, or within the diligent attention and observation of, the employed by one or more of the principals to act In that transaction, and includes a listing or an offer to purchase (m) 'Sell." sale - or '.sold" refers to a transaction for We banufer of real property from the seller to the buyer. and includes exchanges of real property 95 Ch 200 — 2 —between the xller and buyer, transactions for the creation of a real propene sales contract within the meaning of Section 2985. and transactions for the creation of a leasehold exceeding one year's duration. (n)'-Seller" means the trandinr in a real property transaction, and includes an owner who lists real property wrlh an agent, whether or not a transfer results. or who receives an offer to purchase real propem of which he or she is the owner from an agent on behalf of another. "Sell." includes bath a vendor and a lessor. (o) ':Selling agent' means a listing agent who acts alone, or an agent who aces in cooperation wih a listing agent, and who sells or finds and obtains a buyer for the real property. or an agent who locates property fora buyer or who finds a buyer for a property for which no Ilslmg exists and presents an offer to purchase to the seller. (pi "Subagent" means a person to whom an agent delegates agetm powers as provided m Article 5 (commencing with Section 2149) of Chapter 1 of Title 9 However. `subagent- dons not include an assomate licensee who is acting under the superosion of an agent m a real propcin transaction. 2079.14. Listing agents and selling agents shall provide the seller and buyer In a real property transaction with a copy of the disclosure form speeded in Section 2079. 16, and, except as provided in subdivision (c), shall abeam a signed acknowledgment of receipt from that seller or buyer, except as provided In this section or Section 2079.15, asfitillows. (a) The listing agent, if any, shall provide the disclosure form to the seller prior to entering into the listing agreement. (b) The selling agent shall prondc the disclosure form to the seller as scan as practicable prior to presenting the seller with an offer to purchase, unless the selling agent previously provided the seller with a copy of the disclosure form pursuant to subdivision (a). (c) Where the selling agent does not deal on a face -too -face basis with the seller, the disclosure Tam prepared by. the selling agent may be furnished to the seller (and acknowledgment of receipt obtained for the selling agent from the sellers b the hating agent, or the selling agent may deliver the disclosure form b antled mail addressed to the seller at his or her last known address, in which case no signed acknowledgment of receipt is requited. (d) The selling agent shall provide the disclosure form to (he buyer as sown as practicable prior to ecuticon of the buyers offer to purchase, except that if the offer to purchase is no prepared by the selling agent. We selling agent shall present the disclosure fin to the buyer not later than the next business day alter the selling agent receives the offer to purchase fiom the buyer. 2079.1S In any circumstance in which the seller or buyer refuses to sign an acknowledgment of receipt pursuant to Section 2079. 14, the agent, or an associate licensee acting for an agent, shall set forth, sign, and date a written doclaral on of the fscts of We refusal. 2079.16. The disclosure fomr required by Section 2079.14 shall have Sections 2079.13 to 2079.24, inclusive. excluding this section, printed on the back, and on the front of the disclosure farm the following shall appear. DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIP (As required by the Civil Code) When you enter into a discussion with a real estate agent regarding a real estate transacllon, you should from the outset understand what type of agency relationship or representation you wish to have with the agent In the transaction. SELLER'S AGENT A Sellers agent under a listing agreement with the Seller acts as the agent for the Seller only. A Seller's agent or a subagent of that agent has the following affirmative obligations. To the Seller A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Seller. To the Buyer and the Seller (a) Dshgenl exercise of reasonable skill and care in perfomnancc of the agent's dunes. (1O A duty of honest and fair dealing and good faith. (e) A duty to disclose all facts known to (he agent materially effecting We value or desirability of the parties. An agent is not obligated to reveal to either party any matidential information obtained from the other pain that does nor involve the affirmative duties set fonh above. BUYER'S AGENT A selling agent can, with a Buyers con000l, agree to act as agent for the Buyer only. In these situations, the agent is not the Sellers agent. even If by agreement the agent may receive compensation for senate s rendered_ either in full or in part from the Seller An agent acting only for a Buyer has the following afTumalive obligations: To the Buyer. A fiduciary duty of utmost care, integrity, honesty, and Imsity in dealings with the Buyer To the Buyer and the Seller (a j Diligent exercise of reasonable skill and care in peAbrman« of the agent's duties (b) A duty of honest and fair dealing and good faith. (c) A duty to disclose all faces known to the agent materially affecting the value or desirability of the property that are not known 10. or within the diligent attention and observation of, the parties An agent is not obligated to reveal to either party any confidential information obtained from the other party that does not involve the affirmative duties set forth above. AGENT REPRESENTING BOTI I SELLER AND BUYER A real estate agent, either acting directly or Through one or mote assa:iata licensees. can legally be the agent of both the Seller and the Buyer m a transaction. but only with the knowledge and consent of both (he Seller and the Buyer In a dual agency situation. the agent has the following affirmative ohhgalions to both the Seller and the Buyer (a) A fiduciary duty of utmost care, mtegn(v, honesty and loyalty in the dealings with either the Seller or the Buyer. (i) Other dunes to the Seller and the Buyer ao stated above in their respective sections In representing bath Seller and Bnscr. the agent may not, without The express pernission of the respective party, disclose to the other party that the Seller will accept a price less than the luting prim/ or that the Buyer will pay a price greater than the price offered. The above duties of the agent in a real estate transadmn do no' relieve a Seller or Buyer front the responsibility to protect his or her ono Interests You should carefully read all agreements to assure that they adequately express your understanding of the transaction. A real estate agent is a person qualified to advise about real estate If legal or tax advice is desired, consult a competent profeswonal Throughout your real property transaction you may recerve more than one disclosure form, depending upon the number of agents assisting in the transaction. The law requires each agent with whom you have more than a casual relationship to present you with this diulosure form. You should read its contents each time it is presented to you, considering the relationship between you and the real estate agent in your specific Iransaaron. This disclosure f includes the provisions of Sections 2079.11 to 2079.24. inclusive, of the Civil Code set forth on the reverse hereof. Read it carefully. .tiAMI'LI: ()NI Y-1R0 N6l 1'OMl'I Ell: Agent (date) Buyer/Seller (dale) (Signature) Associate Licensee (date) Buyer/Seller (date) (Signature) (Sputum( 2079.17 (a) As soon as practicable, the selling agent shall dws Ante to the buyer and seller whether the selling agent is acting in the real property transaction exclusively as The buyer's agent. exclusively us the sellers agent, or as a dual agent representing both the buyer and the seller. This relationslnp shall la confirmed in the contract to purchase and sell real property or in a separate writing executed or acknowledged by the seller. the buyer, and the selling agent prior to or coincident with exemnion of that contract by the buyer and the seller, respectively (h) As .on as practicable. (he listing agent shall disclose to the seller whether the listing agent is acting in the real property transaction exclusively as the seller's agent or as a dual agent representing both the buyer and seller. This relationship shall be confunted in the contract to purchase and sell real property or in a separate writing executed or acknowledged by the Seller and the listing agent poor to or comcidenl with the execution of that contract by the seller (c) The confirmation required by subdivisions (a) and (b) shall be in the following form. SAMPI.I: ((Ni. Y. IN, NISI tsiMi'1I (1 is the agent of (Name of Lining Agent) (check onap. ( ) the sell. exduaively: or ( l lath the town and sellert is the agent of (Name of Selling Agent if not the same as the Listing Agent, (check one). ( )(he buyer exclusively. or ( ( the seller exiluarvely. or i l both the buyer and seller. (d) The disclosures and confirmation required by this section shall be in addition to the disclosure required by Section 2079. 14. 2079.16 No selling agent in a real property transaction may ad as an agent for the buyer only. when the selling agent is also acting as the listing agent in the transaction 2079.19. The payment of compensation or the obligation to pay compensation to an agent hy the seller or buyer is not n anly detmmmative of a particular agora relationship between an agent and the seller or buyer�A listing agent and a selling agent may agree to .share any compensation o' comnumion paid, or any nghl to any compensation or commission for which an obligation anaa as the result of a real estate transaction, and Owe term of any such agreement shall not nacessanily be delennmaine of a particular relationship 2079.20. Nothing in tins article prevents an agars from selcamg, as a condition of the agent's employment. a specific form of agency relationship not specifically prohibited by this anide If the regoremenls of Section 2079 14 and Section 2079 17 are complied with 2079.21. A dual agent shall not disclose to the buyer that the seller is willing to sell the property at a price less Than the listing price. without the express mitten consent of the sell.. A dual agent shall not disclose to the seller that the buyer is willing to pay a price greaser Than the offenng price, without the express written consent of the buyer. This section does not alter In any way the duty or res)onsi nitty of a dual agent to any principal with respect to confidential mfomnation other than pnca 2079.22. Nothing in this article precTales a listing agent from also being a selling agent, and the amhination of these functions In one agent does not, of itself, make that agent a dual agent 2079.23 A contract between the pnnespal and agent may be modified or altered to change the agency relationship at any Ilene before the performance of the act which is the object of the agency with the wnnen consent of the names to the agency relanonahip. 2079.24. Nothing in this article shall he construed to enho diminish the duty of disclosure owed buyers and sellers by agents and Weir associate hansees. subagents. and employees or to relieve agents am/ Weir associate hcenxes. subagents, and employees from liability for Weir monduct in connection with acts governed by this article or for any bleach of a fiduciary duty or a duty of disclosure. EMM or Sale > Industrial Building 1430 Hoover Avenue National City, CA 91950 Contact MARK LEWKOWITZ CHRIS HOLDER, SIOR +1 858 677 5361 41 858 677 5372 mark.lewkowitzecolliers.com chris.holderlacolliers.com WILL HOLDER +1 858 677 5341 will.holderacoltiers.com Colliers INTERNATIONAL 4350 La Jolla Village Drive, Suite 500 San Diego, CA 92122 -11 858 455 1515 MAIN Lic. No. 01908588 colt iers.cornisand iego Property Details > 6,400 SF Building > 7,602 SF Lot (0.18 Acres) > Heavy Power (3 Phase 400 AMPs) > 2 Roll -Up Doors > 16' Clear Height > Concrete Block Building > HVAC to Offices > Compressor Air Throughout > Skylights > Bonus Mezzanine Office (+/-2,000 SF) > 2 Restrooms > Kitchenette > Easy Access to1-5,1-15 and SR-94 freeways > Close Proximity to Navy, Nassco, & BAE > Sale Price: $1,200,000 P • FOR SALE > 1430 Hoover Avenue National City, CA 91950 53 75' 31' 1- Grade Level Door 20' 36' 3 6' RR I RR 31' Grade Level Door Reception Kitchen O Grade Level Door O 75' W 15th Street anuanvJanooH FOR SALE > 1430 Hoover Avenue National City, CA 91950 Contact MARK LEWKOWITZ First Vice President +1 858 677 5361 Lic. No. 01785338 mark.lewkowitztdcofhers.com CHRIS HOLDER, SIOR Senior Vice President +1 858 677 5372 Lic No. 00894854 chris.holder (dcolliers.com WILL HOLDER Associate +1 858 677 5341 Lic. No. 02034306 wilLholder Ocoll iers_com 4350 La Jolla Village Drive Suite 500 San Diego, CA 92122 +1 858 455 1515 MAIN Lic. No. 01908588 coil iers.com/sandiego Colliers INTERNATIONAL FOR SALE > 1430 Hoover Avenue National City, CA 91950 NATIONAL AVE 1430 HOOVER AVE MARKET ST IMPERIAL AVE Contact MARK LEWKOWITZ First Vice President +1 858 677 5361 Lic. No. 01785338 mar k.lewkowitz(dcoltiers .com CHRIS HOLDER. SIOR Senior Vice President +1 858 677 5372 Lic. No. 00894854 chris.holder (dcolliers.com WILL HOLDER Associate +1 858 677 5341 Lic. No. 02034306 wil l.holder(dcolliers.com 4350 La Jolla Village Drive Suite 500 San Diego, CA 92122 +1 858 455 1515 MAIN Lic No. 01908588 couiers.com/sandiego Colliers INTERNATIONAL C „J& Codices Netnn!nnn! hfnrmaten lrere;n has i><rn obtained from scut ccs dernvd rehntde. hemcvc 7 a curacy cannot be gto anle'd The ustr n'mo;rat to conduct tirc,n rwe the ail nee n'.J vrr;ncunen All s cs Cernet San Diego Market::. _ - _ Attachment No. 3 APPRAISAL REPORT An Existing 6,400 SF Industrial Building Located at: 1430 Hoover Avenue National City, California 91950 APPRAISED FOR Mr. Gregory Rose City of National City Property Agent Housing & Economic Development Department 140 East 12`b Street, Suite B National City, CA 91950 DATE OF VALUATION April 26, 2018 DATE OF REPORT May 2, 2018 APPRAISED BY Brad C. Woodall, MAI 9922 Winecrest Road San Diego, CA 92127 (858) 876-2510 Attachment No. 3 BRAD C. WOODALL, MAI 9922 Winecrest Road • San Diego, CA 92127 • Telephone: (858) 876-2510 May 2, 2018 Mr. Gregory Rose City of National City Property Agent Housing & Economic Development Department 140 East 12th Street, Suite B National City, CA 91950 Mr. Rose: This appraisal report has been prepared for the purpose of estimating the "as is" market value of the fee simple interest of the property located at 1430 Hoover Avenue, National City, California. The subject consists of an existing concrete block industrial building containing 6,400 square feet on a 7,500 gross square foot lot. The building is approximately 48 years old and is in overall average condition. It is currently vacant. "As Is" Value Based on analysis of recent market activity, it was concluded that the "as is" market value of the fee simple interest in the subject as of April 26, 2018 was: ONE MILLION ONE HUNDRED FIFTY THOUSAND DOLLARS $1,150,000 The estimated exposure time is four months and the estimated marketing time is also four months. The appraised value does not include any personal property items. This letter is only a part of the narrative appraisal report which follows (including the Addenda). For a brief summary of findings, please refer to the Summary of Salient Facts on page 1 of the report. This appraisal is for the exclusive use of The City of National City for asset valuation and decision making purposes. No other use of the appraisal is authorized by the appraiser. Attachment No. 3 Page two Mr. Rose May 2, 2018 The value conclusion was developed subject to certain assumptions and limiting conditions which are listed later in the report. Subsequent changes in the assumptions may result in a different value conclusion. For that reason, the reader is strongly urged to review all of the assumptions and limiting conditions under which this appraisal was prepared. Thank you for this opportunity to be of service. Respectfully submitted, c_15cz-ep,C2 Brad C. Woodall, MAI CA Certification No. AG015729 Expiration date 2/12/19 Brad C. Woodall, MAI Attachment No. 3 TABLE OF CONTENTS INTRODUCTION Letter of Transmittal 1 Summary of Salient Facts 1 Subject Property Photographs 2 Appraiser's Certification 4 Assumptions and Limiting Conditions 5 Identification of the Subject Property 8 Identification of the Property Rights to be Valued 8 Function of the Appraisal 8 Type and Definition of Market Value 8 Date of the Value Estimate 9 Scope of the Appraisal 9 Property and Ownership History 10 FACTUAL DESCRIPTIONS Regional Description 12 City Description 15 Industrial Market Conditions 18 Tax and Assessment Information 22 Site Description 24 Improvements Description 27 ANALYSIS OF DATA AND OPINIONS OF THE APPRAISER Highest and Best Use 30 Highest and Best Use As if Vacant 30 Highest and Best Use As Improved 31 Introduction to Valuation 33 Sales Comparison Approach 34 Income Approach 44 Reconciliation 56 Exposure Time and Marketing Time 58 ADDENDA Comparable Improved Sale Photographs & Data Sheets A2 Comparable Lease Photographs & Data Sheets A8 Floor Plan A 13 Qualifications of the Appraiser A 14 Brad C. Woodall, MAI Attachment No. 3 SUMMARY OF SALIENT FACTS LOCATION: 1430 Hoover Avenue, National City, California 91950 CENSUS TRACT: 219 LAND AREA: One lot containing approximately 7,500 gross square feet. IMPROVEMENT DESCRIPTION: A concrete block industrial building which contains 6,400 gross square feet. HIGHEST AND BEST USE: As if Vacant: Hold for future development As Improved: The existing improvements represent the highest and best use as improved. INCOME: Potential Gross Income: $70,656 Less Vacancy & Collection Loss: ($1,413) Effective Gross Income: $69,243 Expenses: ($17,763) Net Operating Income: $51,480 CAPITALIZATION RATE: 6.25% VALUE INDICATIONS: Sales Comparison Approach: $1,150,000 Income Approach: $825,000 "AS IS" MARKET VALUE: $1,150,000 DATE OF VALUE: April 26, 2018 VALUE SOUGHT: "As Is" market value INTEREST APPRAISED: Fee simple interest EXPOSURE TIME: Four months MARKETING TIME: Four months Brad C. Woodall, MAI 1 Attachment No. 3 SUBJECT PROPERTY PHOTOGRAPHS VIEWING NORTHWEST TO THE EAST SIDE OF THE SUBJECT VIEWING NORTH TO THE SOUTH SIDE OF THE SUBJECT VIEWING SOUTHWEST TO THE EAST SIDE OF THE SUBJECT VIEWING NORTHEAST TO THE SOUTH SIDE OF THE SUBJECT VIEWING WESTERLY TO THE EAST SIDE OF THE SUBJECT 10111) as - VIEW OFOII(t l: ,`o1°1 Brad C. Woodall, MAI Attachment No. 3 SUBJECT PROPERTY PHOTOGRAPHS VIEW OF OFFICE MEZZANINE AREA VIEW OF TYPICAL RESTROOM VIEW OF WAREHOUSE AREA Brad C. Woodall, MAI 3 Attachment No. 3 APPRAISER'S CERTIFICATION hereby certify that to the best of my knowledge and belief: I . The statements of fact contained in the report arc true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, impartial, and unbiased professional analyses. opinions, and conclusions. 3. I have no present or prospective interest in the property that is the subject of this report, and no personal interest with respect to the parties involved. 4. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. 5. My engagement in this assignment was not contingent upon developing or reporting predetermined results. 6. My compensation for completing this assignment is not contingent on the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of value, the attainment of a stipulated result. or the occurrence of a subsequent event directly related to the intended use of the report. 7. The reported analyses, opinions and conclusions were developed, and the 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. 8. The reported analyses, opinions and conclusions were developed, and the report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. 9. The use of the report is subject to the requirements of the Appraisal institute regarding review by its duly authorized representatives. 10. I have made a personal inspection of the property that is a subject of this report, and of the comparable sales data. I I. No one provided significant real property appraisal assistance to the person signing this certification. 12. This is a "certified" appraisal, under California state law. 13. This appraisal was not based on a requested minimum valuation. a specific valuation or the approval of a loan. 14. As of the date of this report, Brad C. Woodall has completed the requirements under the continuing education program of the Appraisal Institute for designated members. 15. Only a complete original copy of this report should be relied upon. Any copy of this report which is not entirely in this form is not an original and therefore should not be considered or used as a "valid" report; nor will the appraiser(s) accept any liahility or responsibility for the use or reliance of such unauthorized copy. I6. I have performed no services as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. Brad C. Woodall, MAI CA Certification No. AG015729 Expiration date 2/ 12/ I9 Brad C. Woodall, MAI 4 Attachment No. 3 ASSUMPTIONS AND LIMITING CONDITIONS This appraisal was made under the following general and specific assumptions. The reader is cautioned that subsequent changes in any of the assumptions may result in a different value con- clusion, and the appraiser reserves the right to modify the appraisal should there be any such changes. 1. No responsibility is assumed for the legal description or for matters including legal or title considerations. Title to the property is assumed to be good and marketable unless otherwise stated. 2. The property is appraised free and clear of any or all liens or encumbrances unless otherwise stated. 3. Responsible ownership and competent property management are assumed. 4. The information furnished by others is believed to be reliable. However, no warranty is given for its accuracy. 5. All engineering is assumed to be correct. The plot plans and illustrative material in this report are included only to assist the reader in visualizing the property. 6. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures that render it more or less valuable. No responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them. 7. It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless noncompliance is stated, defined, and considered in the appraisal report. 8. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a nonconformity has been stated, defined and considered in the appraisal report. 9. It is assumed that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, or national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based. 10. It is assumed that the utilization of the land and improvements is within the boundaries or property lines of the property described and that there is no encroachment or trespass unless noted in the report. Brad C. Woodall, MAI 5 Attachment No. 3 11. Unless otherwise stated in this report, the existence of hazardous material, which may or may not be present on the property, was not observed by the appraiser. The appraiser has no knowledge of the existence of such materials on or in the property. The appraiser, however, is not qualified to detect such substances. The presence of substances such as asbestos, ureaformaldehyde foam insulation, or other potentially hazardous materials may affect the value of the property. The value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired. 12. The appraiser is not a property inspector or engineer and is not qualified to detect deficiencies in the structural and mechanical components of the improvements. Unless otherwise stated in the report, it is assumed that the improvements have no structural or mechanical problems and that all mechanical systems including electrical, plumbing and HVAC are in proper working condition. 13. The Americans with Disabilities Act (ADA) became effective January 26, 1992. This appraiser is not qualified to perform a specific compliance survey or to determine whether the subject is in conformity with the various detailed requirements of the ADA. It is possible that a compliance survey of the property, together with a detailed analysis of the requirements of the ADA, could reveal that the property is not in conformance with one or more of the requirements of the Act. If so, this fact could have a negative impact upon the value of the property. This appraisal is made under the following general limiting conditions: 1. Any allocation of the total value estimated in this report between land and improvements applies only under the stated program of utilization. The separate values allocated to the land and buildings must not be used in conjunction with any other appraisal and are invalid if so used. 2. Possession of this report, or a copy thereof, does not carry with it the right of publication. 3. The appraiser, by reason of this appraisal, is not required to give further consultation, testimony, or be in attendance in court with reference to the property in question unless arrangements have been previously made. 4. Neither all, nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraiser, or the firm with which the appraiser is connected) shall be disseminated to the public through advertising, public relations, news, sales, or other media without the prior written consent and approval of the appraiser. Brad C. Woodall, MAI 6 Attachment No. 3 5. Any value estimates provided in the report apply to the entire property, and any proration or division of the total • into fractional interests will invalidate the value estimate, unless such proration or division of interests has been set forth in the report. 6. The forecasts, projections, or operating estimates contained herein are based upon market conditions as of the date of value, anticipated short-term supply and demand factors, and a continued stable economy. These forecasts are, therefore, subject to changes in future conditions. Extraordinary Assumptions None Hypothetical Conditions None Brad C. Woodall, MAI 7 Attachment No. 3 INTRODUCTION Identification of the Subject Property The subject of this appraisal report is the existing industrial property located at 1430 Hoover Avenue, National City, California. A partial legal description, taken from public records is as follows: Lots 13 through 15 in Block 79 of National City Refiled Map No. 348, in the City of National City, County of San Diego, State of California. Identification of the Property Rights to be Valued The property rights appraised are those of the fee simple estate. The definition of fee simple is: "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."' Personal property items are not included as a part of this valuation. Function of the Appraisal/Intended Use This appraisal is for the exclusive use of The City of National City for asset valuation and decision making purposes. No other use of the appraisal is authorized by the appraiser. Client/Intended Users The City of National City is the client and the only intended user. Type and Definition of Market Value Market value is defined as: "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 each acting in what they consider their own best interests; 'The Dictionary of Real Estate Appraisal, Fifth Edition, p. 78. Brad C. Woodall, MAI 8 Attachment No. 3 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 considerations for the property sold, unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.' Definitions Market Value "As Is" - is an estimate of the market value of a property in its condition observed, as of the date of inspection, and as it physically and legally exists without hypothetical conditions, assumptions, or qualifications. Date of the Value Estimate The effective date of value is April 26, 2018 and the date of the report is May 2, 2018. Scope of the Appraisal This appraisal report is intended to conform with FIRREA, the current Code of Professional Ethics of the Appraisal Institute and the Uniform Standards of Professional Appraisal Practice adopted by the Appraisal Standards Board of The Appraisal Foundation. The appraiser meets the requirements of the Competency Provision of the current Uniform Standards of Professional Appraisal Practice. The client has requested the appraiser provide one value estimate, "as is" market value of the fee simple interest. The appraisal process included, but was not limited to, the following steps. Regional and local demographics were studied and analyzed as they pertain to the subject. The report includes a market analysis of the industrial market which discusses inventory, absorption and vacancy in the subject's market area. Additionally land inventory, building sale prices and lease rates are analyzed. A visit to the subject property was made, from which data was gathered for the site and improvement description sections of the report. In the Highest and Best Use section of the report, a highest and best use as vacant and as improved was completed. For the highest and best use as vacant analysis, the maximally productive use of the site is estimated from the uses that are physically possible, legally permissible, and financially feasible; assuming the site is vacant. In the Highest and Best Use as Improved analysis, the maximally productive use of the property in its existing condition as of the date of value is estimated from the options that are physically possible, legally permissible, and financially feasible. A 2OCC, 12 CFR, Part 34, Subpart C -Appraisals, 34.42 Definitions Brad C. Woodall, MAI 9 Attachment No. 3 determination is made as to whether the existing improvements are the maximally productive use or whether some other use or modification of the existing improvements is the maximally productive use. Following the Highest and Best Use analysis is the valuation of the property in which both the Sales Comparison and Income Approaches to value were undertaken. In this case, the Cost Approach was not utilized because of the lack of recent land sales in the market area. In the Sales Comparison Approach, comparable sales were researched and confirmed with a party involved in the transaction to determine the important details of the transaction. The most relevant characteristics of the sale comparables are then compared directly with the subject on a price per square foot basis. In the Income Approach, lease data is researched and verified by property managers, leasing brokers or owners. The most relevant characteristics of the comparable leases are then compared directly with the subject in order to derive an estimate of market rent for the subject. A vacancy and collection loss factor is derived by analysis of the for -lease market and determining vacancy and collection loss factors utilized by investors in the market. Operating expenses are then estimated by analysis of the subject's historical expenses, comparable properties, and expense surveys. The net operating income is then capitalized by a market derived capitalization rate which is extracted from comparable sales. After the Income Approach is a reconciliation of the approaches to value where a final estimate of market value is made. Property and Ownership History According to public records, the current owner of record is the Senter Family Trust, which acquired the property on November 9, 2000 per Document No. 00-0609840. There have been no transfers in ownership of the subject property in the three years prior to the date of appraisal according to public records. The property was listed for sale approximately one month ago at a price of $1,200,000. The listing broker reports that an offer was made for $1,150,000, but the buyer was unqualified to purchase the property. The City of National City has made an offer on the property of $995,000 which has been accepted by the owner, but the property is not yet in escrow. The listing and offers will be more throughly analyzed in the valuation section of the report. Brad C. Woodall, MAI 10 •' DELORME DeLormeDSi eei Ailasl)SI® 2011 r Fallbrook Bonsall San'Luis Rey• REGIONAL MAP (San Marcos • � I Ilorf Encinitas \Cardiff-by-the•Sea • ' "y 7 Rancho Santa Fe Del Mar Tw Sm Slate Beach Data use subject to license. © DeLorme. DeLorme Street Atlas USA® 2011. www.delorme.com • Five Points Naval A nu Pauma Valley Valley Center• San s.0 Be -d tate Historic Park El Centro Naval Air Faolay Lemon Grove 90 Qnwnrn SSlfrnu h rn* MN(11.5.E) San Vicente Reservoir r Santee • Spring Valley Lakeside wkr kn•rr LoWer- Okn. Re.+,reoir and NF ,Ramona Pc^.cria Santa Ysabel Capstan G1 a' ulv Indian a ervatlon Dulzura • Scale 1 400,000 1" = 6.31 mi Data Zoom 9-0 11 Attachment No. 3 REGIONAL DESCRIPTION Location The subject property is located in San Diego County, California. San Diego County is located in the southwestern corner of the United States and is bordered on the west by the Pacific Ocean, and on the east by Imperial County. Riverside and Orange Counties form the northern boundary and Mexico is to the south. Population The California Department of Finance reports a population of 3,316,192 persons for San Diego County as of January 1, 2017. That represents an increase of 474,779 persons, or 17.9%, from the April 2000 census amount of 2,813,833. Since 2000 the county has grown at a compound rate of 1.0% per year. The county growth rate into the year 2020 is projected to increase to about 2.2% per year. The population of the City of San Diego was estimated at 1,406,318 persons as of January 1, 2017, or 42% of the total county population. The average compound annual growth rate for the City of San Diego has been 0.8% since 2000, and is projected to increase to 3.1% into the year 2020. Economic Base As San Diego has grown in size, the economic base of the region has grown in diversity. The educational & health sector showed the largest percentage increase of employed persons between 1990 and 2010 with an increase of 74.9% or 63,000 workers. Over the last year (March 2017 to March 2018), the Construction sector showed the largest percentage increase in employment with 3,500 new jobs, a 4.5% increase. High technology employment has helped transform the San Diego Economy. Emerging growth areas include telecommunications, computers and software, biotechnology and medical instruments. Qualcomm has established San Diego as the nation's leading telecommunications technology center. It is the county's largest high technology employer with over 12,000 people employed. As of March 2018, the unemployment rate in San Diego was 3.2%. Income Levels The median household income in San Diego County was $47,360 in 2000. The County's median household income increased by 46.9% to $69,595 in 2016. Brad C. Woodall, MAI 12 Attachment No. 3 Housing Based on a housing value survey conducted by independent appraisers for the San Diego Chamber of Commerce and the Real Estate Research Council, the average price of a single family home in San Diego was generally declining in the first half of the 1990's. For example, the average home price in the survey declined from $233,300 in 1990 to $203,900 in 1995. From 1996 to 2005, the average home price in the survey was steadily rising, but declined from 2006 to 2011. As of October 2017, the average home price in the survey was $702,584, an increase of 5.8% from the prior year and an increase of 14.1 % from October 2015. The number of residential building permits and permitted units have declined substantially from the mid-1980's when the total number of permitted residential units ranged between 18,813 and 43,561 per year. Permits for residential units fell to 5,594 in 1993, which was the lowest level on record for the county since the 1940s. Permit activity reached 18,314 units in 2003, the highest since 1989. From 2004 to 2009 residential permits have decreased in each year, reaching the lowest permit level on record in 2009 with only 2,989 units. Multi -family unit permits declined in 2017 going from 7,563 units in 2016 to 5,601 units in 2017. Single family permits increased between 2016 and 2017 going from 2,409 to 3,979 units. Conclusion San Diego County's population has shown large increases in population in the 1990's, but has most recently began to slow down. Based on historical trends and forecasts, this gradual growth trend is expected to continue in the near future. Growth in the economy is expected to resume, but further diversification is needed. Continued expansion is forecast in service -related fields, tourism and foreign trade. Continued increases in high technology and the service sectors will help broaden the economy and provide a more stable environment for real estate investment in properties. Overall, the outlook for San Diego County's economy is positive on a long term basis. The residential home market is showing moderate appreciation over the last year. The industrial, office and retail markets are also showing signs of strength with declining vacancy factors over the last two years. Brad C. Woodall, MAI 13 DEL©RME DeLorme AilasUS® 2011 IMPEfi1AL_AVE ,_. _�� Data use subject to license. © DeLorme. DeLorme Street Atlas USA® 2011. www.delorme.com CITY MAP rn MN (11.7E) Lf co Lincoln Acres 4 'R.S17 Scale 1 : 31,250 O,Q BOO 1600 .00 3z00 woo po wo .o BOO 1000 1" = 2,604.2 ft Data Zoom 12-6 14 Attachment No. 3 CITY DESCRIPTION Location The subject property is located in National City which is approximately three miles southeast of downtown San Diego. National City is bounded by the City of San Diego on the north, the City of San Diego and the County of San Diego on the east, the City of Chula Vista on the south and San Diego Bay on the west. Population The total population in the City of National City as of January 2017 was approximately 61,210 according to the California Department of Finance. Growth in National City was lower than the county -wide rate in the 2000's. Between 2000 and 2017 National City grew at a rate of 12.8%, while the county grew at a rate of 17.95% over the same time period. SANDAG projects National City's population to be 62,058 by the year 2020, which is an approximate 0.5% annual increase from the 2017 population figure. Demographic Information In terms of household income, National City had a median household income of $40,763 as of 2016 as compared to a regional median of $69,595. As of January 1, 2016, there were 16,851 housing units in National City and 3.50 persons per household. The number of housing units increased 8.4% from 2000. The median age of National City's residents was 31.1 years, lower than the region's median age of 35.5 years. Housing National City has a wide range of housing product ranging from 500± square foot homes on lots of 5,000 to 10,000 square feet, to old Victorian homes of 3,000+ square feet on 1.0+ acre lots. Detached resale housing prices have ranged from $215,000 to $540,000 over the last six months in National City with a median price of $429,000 and an average price of $420,134 according to the Multiple Listing Service (MLS). A total of 87 homes sold in National City through the MLS over the last six months and had an average marketing time of 30 days. Attached resale housing prices have ranged from $144,000 to $410,000 over the last six months in National City with a median price of $255,000 and an average price of $251,192 according to the Multiple Listing Service (MLS). A total of 20 homes sold in National City through the MLS over the last six months and had an average marketing time of 38 days. Brad C. Woodall, MAI 15 Attachment No. 3 Employment As of March 2018, total employment in National City was approximately 23,800 and unemployment was approximately 1,100 people or 4.2%. The average annual employment figure in 2017 was 24,000, an increase of 3.0% over the average annual employment figure in 2016. Average annual unemployment in the city has declined over the last two years and ranged between 5.0% and 5.9%. There is a fairly large industrial district in the city which provides employment for many of the city residents. The United States Navy is a large employer in the area with the Naval base at 32°d Street, about two miles northwest of the subject. Transportation and Access Primary access to National City is provided by Interstates 5 and 805. Interstate 5 runs north along the coast through San Diego County from the Mexican border. Interstate 805 parallels Interstate 5 and is located approximately two miles east of Interstate 5. From south to north, freeway access points in National City from Interstate 5 are at 24th Street, Civic Center Drive and Eighth Street. Freeway access points in National City from Interstate 805 are at Sweetwater Road, Plaza Boulevard and Division Street. Major surface streets include National City Boulevard, Highland Avenue, Sweetwater Road, Division Street, Eighth Street, Plaza Boulevard, Civic Center Drive, 18th Street, and 24th Street. National City Boulevard, Highland Avenue and Plaza Boulevard are the primary commercial strips in the city. National City has a light rail trolley system which extends from the U.S./Mexican border through the city limits and into downtown San Diego. There are two trolley stations in National City, one at the northeast quadrant of Interstate 5 and 24th Street, and the other at the northeast corner of Eighth Street and Harbor Drive. Public Services The City of National City has its own municipal police force for police protection. Fire protection service is currently provided from two fire stations, the closest is located within one-half mile to the east of the subject on D Avenue. The City of National City does not provide a solid waste collection service. Private collectors are issued permits which allow the services to collect solid waste in the city. Telephone and cable television are also available. Nine elementary, two junior high, and one senior high school serve the city. Paradise Valley Hospital serves the health care needs of National City's residents. Brad C. Woodall, MAI 16 Attachment No. 3 Shopping National City Boulevard, Highland Avenue and Plaza Boulevard are the major commercial strips in the city, where there are older free-standing retail buildings and several strip centers. The nearest regional shopping center is Plaza Bonita, located about 2.5 miles southeast of the subject property. South Bay Plaza and Sweetwater Town and Country are large community shopping centers located in National City. The National City Mile of Cars is located on National City Boulevard between 18th Street and 33rd Street. The "Mile of Cars" is one of the largest centers of automobile sales in the county and is also the largest generator of sales tax revenue for the City of National City. Immediate Area of the Subject The subject is located at the northwest corner of Hoover Avenue and 15th Street in an area consisting of a mix of industrial and residential uses. Adjacent uses to the subject include a single family residence to the north and an industrial building to the west. Across 15th Street to the south is an industrial building and across Hoover Avenue to the east are single family residences. Brad C. Woodall, MAI 17 Attachment No. 3 INDUSTRIAL MARKET CONDITIONS Regional Industrial Market The regional industrial market has recently been strong with low vacancy and high net absorption. Colliers International reports that the overall industrial vacancy rate in San Diego was 4.2% at the end of the first quarter of 2018. The following table shows the trend in vacancy in the regional industrial market over the last two years by quarter. REGIONAL INDUSTRIAL VACANCY Period Vacancy 151 Qtr. 2016 5.0% 2°d Qtr. 2016 4.8% 3rd Qtr. 2016 4.4% 46 Qtr. 2016 4.7% 1 " Qtr. 2017 4.9% 2"d Qtr. 2017 4.8% 3rd Qtr. 2017 4.5% 46 Qtr. 2017 4.2% 1' Qtr. 2018 4.2% As shown in the table, the vacancy rate has been in a relatively tight range between first quarter 2016 and first quarter 2018 at 4.2% to 5.0%. As of first quarter 2018, the vacancy rate was 4.2% which is a two-year low. With 189,389,030 square feet of inventory in the Colliers International study, approximately 7,954,339 square feet of space was reported to be vacant. The overall county market is now operating at a stabilized level, and there are several sub -markets where new construction may be justified. The following table shows construction activity and absorption figures for the prior two years according to Colliers International. Brad C. Woodall, MAI 18 Attachment No. 3 REGIONAL INDUSTRIAL CONSTRUCTION AND ABSORPTION Period SF Under Construction Net Absorption Average Asking Rate 1s' Qtr. 2016 1,831,268 13,247 $1.01 2nd Qtr. 2016 1,698,858 294,137 $1.02 3rd Qtr. 2016 1,773,039 988,226 $1.02 4th Qtr. 2016 1,360,194 572,928 $1.03 1' Qtr. 2017 905,184 548,193 $1.03 2"d Qtr. 2017 598,583 546,504 $1.03 3rd Qtr. 2017 2,176,268 522,609 $1.00 4th Qtr. 2017 2,811,454 592,245 $1.00 1' Qtr. 2018 2,895,943 540,728 $1.00 In 2012, net absorption was 3,062,786 square feet, but declined slightly in 2013 to 2,924,405 square feet. In 2014 there was net absorption of 3,079,525 square feet, and in 2015 net absorption was 4,333,577 square feet. Net absorption declined substantially in 2016 to 1,868,538 square feet, the lowest net absorption since 2011. In 2017, net absorption was 2,209,551 square feet. There was 2,811,454 square feet of industrial space under construction in the fourth quarter of 2017, the highest level in the last two years. Most of the new construction is in North County in the areas of Carlsbad, Escondido, Oceanside and San Marcos. The average asking lease rate for industrial space in San Diego has been fairly stable over the last two years ranging between $1.00 and $1.03 per square foot per month on a triple net basis. As of first quarter 2018 the average asking rate was $1.00 per square foot, triple net The available inventory of finished lots has decreased dramatically over the last few years. Industrial building sale prices have been increasing over the last few years and demand for owner/user properties is reported to be good. Institutional investor interest is reported to be strong for large multi -tenant properties, as well as for smaller local investor properties. National City Industrial Market The National City market contains about 2.0% of the total industrial space in the county. Industrial space in National City is quite varied and ranges in size from 1,000 to over 100,000 square feet. Construction type varies from metal, concrete block and concrete tilt -up with the older buildings being of metal and concrete block construction and the newer buildings generally are of concrete tilt - up construction. Brad C. Woodall, MAI 19 Attachment No. 3 Vacancy, Inventory and Absorption Trends According to Costar, as of the end of the first quarter of 2018, the National City industrial market contained 4,170,944 square feet of industrial space and had a vacancy rate of 1.1%. The following table presents a summary of inventory, vacancy, absorption and the average asking lease rate in the National City industrial market over the last two years based on information from Costar. NATIONAL CITY INDUSTRIAL INVENTORY AND ABSORPTION Period Inventory Vacancy Rate Net Absorption Average Lease Rate 1' Qtr. 2016 4,173,567 2.7% 7,917 $0.84 2°d Qtr. 2016 4,173,567 2.3% 16,646 $0.80 3'd Qtr. 2016 4,173,567 1.6% 29,378 $0.91 0 Qtr. 2016 4,173,567 1.9% (14,736) $0.93 1' Qtr. 2017 4,173,567 1.8% 4,415 $0.90 2°d Qtr. 2017 4,173,567 1.8% (1,120) $0.91 3`d Qtr. 2017 4,170,944 1.4% 16,764 $0.63 4`h Qtr. 2017 4,170,944 1.5% (6,187) $0.60 1' Qtr. 2018 4,170,944 1.1% 15,680 S0.90 Industrial inventory has remained stable at 4,170,944 to 4,173,567 square feet according to Costar over the last nine quarters. The vacancy rate has been very low over the last two years ranging between 1.1% and 2.7%, and as of first quarter 2018 was 1.1%. Net absorption has ranged from negative 14,736 square feet to positive 29,378 square feet over the last nine quarters. There was 39,205 square feet of absorption in 2016, and 13,872 square feet of net absorption in 2017. First quarter 2018 net absorption was 15,680 square feet. Planned Construction and Available Land Inventory It is reported by Costar that there was no industrial space under construction in the National City market as of the end of the first quarter of 2018. Additionally, there is not much vacant land inventory in National City available for immediate industrial development. As a result, there is likely to be minimal additional inventory added to the market place which is a positive for the market. The district is estimated to be about 95% built -out. Brad C. Woodall, MAI 20 Attachment No. 3 Market Rental Rates and Building Sale Prices Lease rates for typical industrial space in National City are generally in the range of $0.90 to $1.00 per square foot per month on an industrial gross basis. Older, less desirable buildings or large distribution space may lease at lower rates, while newer, smaller space may lease at higher rates. Concessions are no longer common due to the low vacancy rate and a shortage of available space. Average asking lease rates for industrial space in National City have ranged from $0.60 to $0.90 per square foot per month on a triple net basis according to Costar. However, that information does not reflect the true market conditions in National City as lease rates and been fairly stable to slightly increasing over the last two years. Conventional industrial buildings in the market area are generally selling in the $150 to $200 per square foot price range for owner/user buildings in the 5,000 to 25,000 square foot size range. Small buildings with low coverage will command much higher price per square foot prices. Summary County -wide, the industrial market vacancy rate has remained fairly stable in a tight range between 4.2% to 5.0%. Net absorption has been positive in every quarter over the last two years. As a result of the low vacancy and strong absorption, the amount of new buildings under construction is at its highest level in the last two years. The National City industrial market had a first quarter 2018 vacancy rate of 1.1 %, and there was no industrial space under construction as of the date of the appraisal. An additional positive factor is that there is minimal finished lot inventory in National City for new construction. Brad C. Woodall, MAI 21 Attachment No. 3 TAX AND ASSESSMENT INFORMATION The subject is identified as Assessor Parcel Number 560-061-15. The 2017-18 assessed value is distributed as follows: 2017-18 ASSESSED VALUE Land Improvements Total Taxes $128,865 $307,541 $436,406 $5,232.24 The subject is in tax rate area 06045 which has a tax rate of $1.13906 per $100 of the total assessed value. Property taxes for the 2017-18 fiscal year total $5,232.24 and include the following special assessments: SPECIAL ASSESSMENTS Special Assessment Totals CWA - Water Availability $10.00 MWD - Water Standby $11.50 Sewer Service Charge $234.00 Vector Disease Control $3.54 Mosquito Surveillance $2.28 Totals $261.32 There are no bond assessments. The special assessments are fixed charges with an indefinite time period. The special assessments are not significant in terms of the valuation of the property and would probably not warrant consideration from potential buyers. The sewer service charge is on the tax bill rather than the water bill as in many other areas of the county. According to the tax collector, there are no delinquent taxes on the property. Brad C. Woodall, MAI 22 Attachment No. 3 ASSESSOR'S PLAT 00 COOLIDGE 80 4TH h ao / ;/�1, t 24 23 x•M as•c N 22 Do h QD2 ^2//= — 3 — 20 — 4 /9(7r) —, _, c3 _ /B ©6 ] 5.ot(...J pL %� 6 i /7 �) 7 " _ Cs/6T. n D 09 ti'l I 1214Z/5 'h� 9 § 0.1 ,/¢ CI ti aoo tiam�rew '3 N72•/4'45"E 15TH 100 5132 I 4291 1 - 222 3 23 4 '. 24 5' N CC ^m Nfl46 , ; bo 7iP5 .ZPS N •/ •� B LK B ail = N72.144VE 2S IT .•,00 22(EE) '5 CED 61 60 9 10 .9R.s /e O ch /7 8 p472•4441:E 15 12 OB 14 fct — slIIh /003 ti N7 L•14'4O"f $ Z 00 I1J W O O .50 S PER R9S 17107 RI RR se 2c ,_ 30 r3 85.64 4 co 2® 21 e5.05 N7 61I'E 115.05 •s s 20"D 4 CED S (ID 6 5 /9 0 /B /7 8 iS 9 55 (� ) 6• 55 i6 /3 ID 9 w CRT) •^9 Le ®/o ti . ss IO 3 ©4 s_4 Q6 7 a_)B ©9 1. //3 ry 22(Ttn 2/ /60 /5 4 D n /3 '^ //5 h Brad C. Woodall, MAI 23 Attachment No. 3 SITE DESCRIPTION Location Northwest corner of Hoover Avenue and 15th Street, National City, CA. Size and Shape The site consists of one rectangular -shaped lot containing approximately 7,500 gross square feet according to assessor records. Topography and Drainage The site is level at street grade and is all usable. It is assumed drainage has been properly engineered and directed away from the improvements. Soil and Subsoil A geotechnical investigation was not provided for review. The appraisal is made under the assumption that there are no soil or subsoil conditions that would impair the utility of the site to the point of affecting its market value. Utilities All public utilities including gas, electricity, telephone, water and sewer are connected to the site. Access From Interstate 5, access to the site is provided by the Civic Center Drive exit east for four blocks, then south on Hoover Avenue for two blocks to the subject. Access on to the site is possible from one curb cut on Hoover Avenue and one curb cut on 15`h Street. Street Improvements Hoover Avenue and 15"' Street are public streets which have two lanes of bi-directional traffic. They are asphalt -paved roads improved with concrete curbs, gutters and sidewalks along the subject's frontage. Environmental Hazards The appraiser is not qualified to detect the existence of environmental or hazardous waste conditions. This appraisal is made under the assumption that there are no environmental or hazardous waste conditions on the site or nearby that would affect value. If there is a concern regarding Brad C. Woodall, MAI 24 Attachment No. 3 environmental or hazardous waste conditions, the client is encouraged to have a Phase l environmental report prepared. Flood Hazard Area The subject is not within a flood zone. It is in Zone X of FEMA panel 06037C 1911G dated May 16, 2012. Geologic Hazard The subject property is not located in an Alquist Priolo special studies zone. Easements and Encroachments A title report was not provided for review. It is assumed that there are no easements or encroachments that have a negative impact on value of the subject property. Visibility and Exposure The site is located on secondary streets and visibility and exposure is average for an industrial site. Adjacent Uses Adjacent uses to the subject include a single family residence to the north and an industrial building to the west. Across 15t Street to the south is an industrial building and across Hoover Avenue to the east are single family residences. On -site Improvements Existing site improvements include concrete paving, concrete walkways and landscaped areas consisting of lawn areas, shrubs and trees. Site Utility The site has all of the physical characteristics required by industrial users including functional dimensions, level topography, and good access to the freeway system. Zoning The subject property is within the Westside Specific Plan and is designated RS-4 (Single family Residential). The only allowed use in the RS-4 zone is single family residential. A density range of 8.7 to 17.5 dwelling units is permitted in the RS-4 zone. Maximum building height in the RS-4 zone is three stories or 35 feet. There are no maximum FAR or coverage regulations, but there are front and side yard setback requirements of 10 feet and a rear yard setback requirement of 15 feet. Brad C. Woodall, MAI 25 Attachment No. 3 Off-street parking of 2.0 spaces per each dwelling unit greater than 1,200 square feet and 1.7 spaces per each dwelling unit less than or equal to 1,200 square feet. No on -site parking requirements are shown for industrial use since that is not a permitted use. The existing use is considered a legal non- conforming use. If the site was currently vacant, an industrial use would not be permitted. However, existing industrial uses are "grand fathered" and are allowed to continue on the property, even with a change in ownership. General Plan Designation According to the National City General Plan, the subject property is in a Specific Plan Area. The general plan and zoning designation are consistent and permit similar uses. No changes are antici- pated in the plan that would impact the subject. Private Restrictions The appraisal is made under the assumption that there are no private restrictions that would adversely impact the site to the point of affecting value. Conformance The subject lot is a legal conforming lot, but the improvements do conform to zoning regulations because industrial buildings are no longer allowed to be constructed on vacant sites within the RS-4 zone of the Westside Specific Plan area. Conclusion and Summary Dimensions of the lot provide adequate street frontage and access. All utilities are available and connected to the site and topography is level. The site has all of the necessary characteristics required for residential users. Brad C. Woodall, MAI 26 Attachment No. 3 IMPROVEMENTS DESCRIPTION The subject improvements consist of a one-story concrete block industrial building. Public records indicate the building contains 6,400 square feet. The measured area was also 6,400 square feet. A copy of the floor plan is in the Addenda. The building is configured for single -tenant occupancy. It has an approximate 336 square foot office area which equates to 5% of the building area and an approximate 6,064 square foot warehouse area. There is also an un-permitted mezzanine office area, but that is not included in the square footage. Following are the construction details of the improvements based on the site visit on April 26, 2018. Construction Details Exterior Description Substructure: Concrete slab on grade Superstructure: Concrete block walls. The building is approximately 17 feet high and the clear height is approximately 15' to the roof beams. Roof Structure and Cover: Windows and Doors: Wood beam roof structure with assumed built-up roof cover over plywood sheathing. The roof was not inspected. No windows. The main entry door is metal and is on the north side of the building. There is one 14' x 14' grade level door on the east side of the building and one 14' x 14' grade level door on the south side of the building. There is an additional roll -up door on the west side of the building that is not functional since it opens to the building wall of the adjacent building to the west as both the subject and the building to the west are on their lot line boundaries. Interior Description Interior Walls: Textured and painted drywall partitions in office area. Ceilings and Lighting: Painted drywall ceiling with ceiling mounted fluorescent lighting in office area. The warehouse area has open ceilings with hanging fluorescent lighting. The restrooms have drywall ceilings with ceiling and wall mount lighting. Doors: Interior solid core and hollow core wood doors with average quality hard- ware. Brad C. Woodall, MAI 27 Attachment No. 3 Floor Cover: Ceramic tile in the office area and restrooms. The warehouse area has painted concrete flooring. Restrooms: Layout: There are two two-fixtured restrooms in the building. Restrooms have ceramic tile flooring and drywall ceilings with ceiling and wall mount lighting. The building is configured for a single -tenant occupancy with an office area at the east end of the building and a warehouse area at the west end of the building. Elevator/Stairs: There is an un-permitted office mezzanine with two sets of stairs. The office mezzanine area is not included in the square footage since it is not permitted. Equipment and Mechanical Systems Plumbing System: Copper, Steel, ABS and PVC plumbing; average quality fixtures Electrical System: 200 amp main electrical panel HVAC System: Central heat and air conditioning in office area, no HVAC in the warehouse area. Fire Protection: The building does not have a fire sprinkler system. Condition Survey The appraiser is not a property inspector or engineer and is not qualified to detect deficiencies in the structural and mechanical components of the improvements. Unless otherwise stated in the report, it is assumed that the improvements have no structural or mechanical problems and that all mechanical systems including electrical, plumbing and HVAC are in proper working condition. Items of Deferred Maintenance: The property is in overall average condition with no noted deferred maintenance. Functional Utility: The improvements were designed for use as a single -tenant industrial building. It functions well for its intended use. The building has adequate power, clear height and truck loading capabilities for a building of its size. Actual Age: Public records indicate the improvements were built in 1970. Therefore, the improvements are 48 years old. Effective Age: The improvements are in average condition overall. The effective age is estimated to be approximately 25 years. Brad C. Woodall, MAI 28 Attachment No. 3 Remaining Economic Life: Site Plan Function: In the appraiser' s opinion, the remaining economic life of the building is approximately 25 years. The economic life could be significantly extended with proper maintenance and remodeling. The subject site is located at the corner of a non -signalized intersection. There is not a circular pattern around the building, but there is adequate room for truck loading and unloading from the roll -up doors for small trucks. There is no yard area. Overall, the site plan functions adequately for a typical industrial use. Coverage Ratio: The coverage ratio is 85%. Parking: There are no on -site parking spaces. Personal Property: This appraisal does not include any personal property items. Brad C. Woodall, MAI 29 Attachment No. 3 HIGHEST AND BEST USE Highest and best use is defined as: "The reasonably probable and legal use of vacant land or an improved property, that is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity. Alternatively, the probable use of land or improved property -specific with respect to the user and timing of use -that is adequately supported and results in the highest present value ".3 Two highest and best use analyses are performed. The first is done under the premise that the land is vacant and available to be put to its highest and best use. The second type takes into account the fact that the land is improved. The process of identifying the highest and best use of a site under both premises involves filtering out the unlikely alternative uses which cannot meet at least one of the four tests of highest and best use. Those tests are: 1) that the use is physically possible upon the site, 2) that the use is legally permissible, 3) that the use is financially feasible, and 4) that the use is the maximally productive use among the alternatives. Highest and Best Use as if Vacant Physically Possible The subject site is level, rectangular in shape and contains 7,500 gross square feet. Its size, shape and topography do not create any building design limitations. The site has adequate visibility and accessibility, and all utilities are available to the site. It does not have any physical characteristics that would inhibit development. Potential physical uses of the property would include any market - driven development. Legally Permissible The subject property is within the Westside Specific Plan and is designated RS-4 (Single family Residential). It appears that the only allowed uses in the RS-4 zone are single family residential. A density range of 8.7 to 17.5 dwelling units is permitted in the RS-4 zone. Maximum building height in the RS-4 zone is three stories or 35 feet. There are no maximum FAR or coverage regulations, but there are front and side yard setback requirements of 10 feet and a rear yard setback 3The Dictionary of Real Estate Appraisal, Fifth Edition, page 93 Brad C. Woodall, MAT 30 Attachment No. 3 requirement of 15 feet. According to the National City General Plan, the subject property is in a Specific Plan Area. The general plan and zoning designation are consistent and permit similar uses. In addition to zoning regulations, legal permissibility is affected by private restrictions such as CC&Rs. It is assumed that there are no private restrictions which impact the allowed uses on the site. Financial Feasibility There is one use that is physically possible and legally permissible for the subject property. That is single family residential. It is beyond the scope of this appraisal assignment to determine the financial feasibility of developing single family homes on the lot. Because there are industrial uses to the west and south of the subject, there may be some resistence to higher end prices in the immediate area of the subject for a new single family homes. Financial feasibility is uncertain for single family residential development at this time.. Maximally Productive & Conclusion The immediate area where the subject is located is in transition with a recent zoning change. Existing land uses are predominately industrial and residential which are not typically compatible uses. Because of the uncertainty in the future development pattern of the immediate area, it is the appraiser's opinion that the maximally productive use is to hold the site for future development. Highest and Best Use as Improved Physically Possible There are four physically possible options for the property as improved: 1) Demolish all or a portion of the existing improvements in favor of constructing a new building; 2) Remodel the interior and/or exterior of the building; 3) Construct a building addition; or 4) Maintain the building in its current configuration. Legally Permissible Each of the four physically possible options discussed in the preceding paragraph are legally permissible for the subject, except for a building addition. Due the fact that industrial improvements are no longer an allowed use, it is unlikely that a building addition would be legally permissible. Financially Feasible While it would be physically possible and legally permissible to demolish all or a portion of the buildings, the building contributes to the overall value of the property. The value of the property as Brad C. Woodall, MAI 31 Attachment No. 3 improved is greater than the value as vacant. Demolition of all or a portion of the building would not be a financially feasible alternative. The building was built in 1970 and appers to be adequately maintained. Overall, the property is in average condition. The building has a functional design with adequate power and truck loading capabilities. Interior and/or exterior remodeling is not necessary at this time and is probably not financially feasible because the cost would exceed any increase in property value. However, modification of the interior could be financially feasible for a new tenant/owner. Maximally Productive & Conclusion Of the four scenarios that are physically possible and legally permissible, two are financially feasible. The first is to maintain the property in its current configuration. The second is to modify the interior tenant improvements to suit a new user. Unless a tenant or owner/user required a different tenant improvement layout, it is the appraiser's opinion that the maximally productive use is to maintain the property in its existing condition. Most Likely Buyer The most likely buyer for an industrial building like the subject would be an owner/user. Of the five comparable sales utilized in the following Sales Comparison Approach, four were purchased by owner/users. Brad C. Woodall, MAI 32 Attachment No. 3 INTRODUCTION TO VALUATION The purpose of this appraisal is to estimate the"as is" market value of the subject property. Two approaches to value are utilized in the valuation analysis; the Sales Comparison Approach and the Income Approach. The Cost Approach is not included because of the lack of recent land sales. In the Sales Comparison Approach, comparable sales are compared directly with the subject and adjustments are made to the sales for differing property characteristics. The adjusted value indicators from each of the sales are reconciled into an estimate of value for the subject property. In the Income Approach, the market rent of the property is estimated by comparison with similar properties that have recently been leased. After deriving a gross income estimate, a market supported vacancy and collection loss allowance is deducted and operating expenses are deducted to provide an estimate of the net operating income. Finally, the net operating income is capitalized at a market derived rate for a value indication by the Income Approach. Following the two approaches to value is a reconciliation of the value indications from each approach to value. In the reconciliation, the accuracy, appropriateness, and quantity of data is analyzed and an estimate of market value is presented. Brad C. Woodall, MAI 33 Attachment No. 3 SALES COMPARISON APPROACH The Sales Comparison Approach is based on the premise that a property's value can be estimated by comparing it with properties of similar utility that have recently sold in the market. As in the Cost Approach, the principle of substitution provides a key relationship in the Sales Comparison Approach. Applied to the Sales Comparison Approach, the principle of substitution holds that a prudent buyer would not pay more for a property than the amount for which a property having similar utility could be purchased for in the open market. When substitute properties are not available in the market, the reliability of the Sales Comparison Approach may be inferior to the Cost or Income Approaches to value. The Sales Comparison Approach involves a five -step process. First, research is undertaken to locate recent sales of properties with similar physical characteristics to the subject. After selecting the most similar sales data from those under consideration, the details of the sales are verified with one of the participants in the transaction. The next step in the Sales Comparison Approach is the selection of the appropriate units of comparison. In this case, the price per square foot of building area is the unit of comparison used most frequently in the market. Each of the sales are compared with the subject, and adjustments are made to the data to reflect the different characteristics which may have an effect on market value. Finally, the adjusted indications of value from each of the sales are reconciled into a single indication of value. Following is a summary of the sales data considered to be the most helpful in estimating the market value of the subject property. Data sheets with photographs of each sale are located in the Addenda. Brad C. Woodall, MAI 34 f)LLORME DeLormeeSi eei Ailas:J &® 2011 Data use subject to license. © DeLorme. DeLorme Street Atlas USA® 2011. www.delorme.com TN r MN (11.5'E) Scale 1 : 9,600 1"=800.0ft Data Zoom 14-4 35 Attachment No. 3 SUMMARY OF COMPARABLE SALES Sale No. 1 2 3 4 5 Address 1533 Wilson Avenue, National City 1200 Harbor Drive, National City 1840 Wilson Avenue, National City 1640 Coolidge Avenue, National City 221 West 33rd Street, National City Thomas Bros. Map 1309 H-2 1309 G-2 8/2/03 1309 H-2 1309 J-4 Recording Date 4/6/18 3/8/17 10/14/16 5/26/16 2/26/16 Cash equivalent Sale Price $1,475,000 $970,000 $785,000 $437,000 $1,344,000 Rentable SF 7,500 6,485 4,664 2,700 8,400 Price per SF $196.67 $149.58 $168.31 $161.85 $160.00 Building Age 41 Years 50+ Years 39 Years 43 Years 46 Years Office Percentage 35% 15% 7% 19% 15% Clear Height 20' 18' 18' 12' 18' Power 200 amp 200 amp 200 amp 200 amp 1,200 amp Roll -up doors 3 Grade 0 Dock 6 Grade 0 Dock 2 Grade 0 Dock 1 Grade 0 Dock 2 Grade 0 Dock Coverage 65% 46% 69% 48% 49% Potential Gross Income N/Ap. N/Ap. N/Ap. N/Ap. N/Ap. Vacancy & Collection Loss N/Ap. N/Ap. N/Ap. N/Ap. N/Ap. Effective Gross Income N/Ap. N/Ap. N/Ap. N/Ap. N/Ap. Expenses N/Ap. N/Ap. N/Ap. N/Ap. N/Ap. Net Operating Income N/Ap. N/Ap. N/Ap. N/Ap. N/Ap. NOI per SF/Year N/Ap. N/Ap. N/Ap. N/Ap. N/Ap. G.I.M. N/Ap. N/Ap. N/Ap. N/Ap. N/Ap. O.A.R. N/Ap. N/Ap. N/Ap. N/Ap. N/Ap. Expenses per SF N/Ap. N/Ap. N/Ap. N/Ap. N/Ap. Expenses as % of EGI N/Ap. N/Ap. N/Ap. N/Ap. N/Ap. Brad C. Woodall, MAI 36 Attachment No. 3 Units of Comparison The most appropriate unit of comparison within the Sales Comparison Approach for industrial buildings is usually the price per square foot of building area. It is the most applicable unit of comparison within the Sales Comparison Approach. The comparable sales are adjusted for all observable differences having an impact on value. Support for adjustments is provided in the following paragraphs. Property Rights Conveyed The fee simple interest in the subject property is appraised. All five of the sales involved the transfer of the fee simple interest and no adjustments for property rights conveyed are required. Financing Terms Sales 1, 2, 4 and 5 were purchased with market rate institutional loans with the sellers receiving all cash, while Sale 3 as an all cash sale. No adjustments for atypical financing terms are required. Conditions of Sale Each of the sales were arm's length market transactions with no unusual conditions of sale. No adjustments for conditions of sale are required. Market Conditions The sales went into escrow between December 2015 and February 2018. According to brokers interviewed during the course of the appraisal, there is not much inventory of available buildings in the subject size range and there is good demand for industrial buildings like the subject. Most reported prices have been increasing over the last few years. According to data from Costar, the average sale price per square foot for industrial buildings in the 5,000 to 25,000 square foot range in San Diego County increased 15.0% between fourth quarter 2015 and first quarter 2018. That equates to a 0.6% per month increase. The average sale price per square foot for industrial buildings in the 5,000 to 25,000 square foot range in San Diego County increased by 0.8% between third quarter 2015 and first quarter 2018 and increased 1.0% per month between first quarter 2016 and first quarter 2018. The average over the three time frames is 0.8% per month. Also considered in the analysis is the trend in average asking lease rates which showed no change between fourth quarter 2015 and first quarter 2018. An upward market conditions adjustment of 0.75% per month will be applied to the comparable sales from the time escrow opened to the end of first quarter 2018 with most weight given to the sale price trends. Brad C. Woodall, MAI 37 Attachment No. 3 Bond Assessments - The subject is not encumbered with any bond assessments nor are any of the sales. No adjustments for bond assessments are necessary. Age/Condition The subject is 48 years old and in average condition overall. The office area appears to have had some remodeling and has built-in cabinets and tile flooring. Sale 1 was 41 years old at the time of sale and was reported to be in average condition with no deferred maintenance. An adjustment for age/condition is not required for Sale 1. The actual age of Sale 2 is unknown, but is estimated at approximately 50 years. It was in below average condition at the time of sale and the buyer had intended to remodel the improvements at a cost of $100,000. Additionally, there were some un-permitted canopies that had to be removed which the listing broker stated was estimated to cost an additional $10,000. An upward adjustment of $110,000 is applied to Sale 2 for age/condition. Sale 3 was 39 years old at the time of sale and in average to good condition. It does not require an adjustment for age/condition. Sale 4 was 43 years old at the time of sale and in average condition except for some required roof repairs that were estimated at $3,000. An upward adjustment of $3,000 is applied to Sale 4 for deferred maintenance. Sale 5 was 46 years old and in average condition with no reported deferred maintenance. It does not require an adjustment for age/condition. Location The subject is located in National City. All five sales are located in National City within one mile of the subject. No adjustments are required for location. Size The subject building contains 6,400 gross square feet. The comparables range in size from 2,700 to 8,400 gross square feet. Sales 1, 2, 3 and 5 range in size from 4,664 to 8,400 square feet and are close enough in size to the subject not to require size adjustments. Sale 3 is smaller than the subject at 2,700 square feet and is adjusted downward by 5.0% based on pairing it with the other four sales. Tenant Improvements The subject has an office build -out of 3%, while the sales' office build -outs range from 7% to 35%. It has been found through paired sales analysis that in many cases buildings with very high second generation office build -outs sell for about the same on a price per square foot basis as buildings with much lower office build -outs. While there are cases in which buildings with high build -outs do sell Brad C. Woodall, MAT 38 Attachment No. 3 at a premium, in more cases than not, no premiums are supported for higher than typical build -outs. The subject's office build -out is at the low end of the market, but there is some un-permitted office area which increases to office build -out to a more typical build -out. An adjustment for office build - out will not be applied to the sales. Building Characteristics The subject is a concrete block building with a clear height of approximately 15 feet. It has a 200- amp power system and two grade level roll -up doors. Its clear height, power and loading doors are adequate for a building of its size and intended use. Sale 2 and 4 are metal buildings which have 12 to 18 foot clear heights, 200 amp power and one to six grade level doors. Metal buildings are generally less desirable than concrete block buildings and an upward adjustment of 5.0% is applied to Sales 2 and 4 for their metal construction. While Sale 4 has a lower clear height than the subject, it is a smaller building and it is typical for clear heights to decline as building size decreases. An additional adjustment for clear height is not required for Sale 4. Sales 1, 3 and 5 are concrete block buildings that have clear height of 18 to 20 feet, power ratings of 200 to 1,200 amps and adequate loading doors. Sale 1 has a significantly higher clear height than the subject and is adjusted downward by 5.0%. Sale 3's clear height is slightly higher but an adjustment is not warranted for the small difference. Sale 5 has significantly more power and is adjusted downward by 5.0%. Coverage Coverage is an extremely important characteristic in the industrial market. Some users require large yard areas and are willing to pay a premium for properties with larger than typical yard areas. Generally buildings with lower coverage sell at a premium in the industrial market due to the desirability of the additional yard area. The subject's coverage is 85%. The sales have coverage ratios of 46% to 69%. Each of the sales have lower coverage than the subject and require downward adjustments for coverage. The coverage adjustment is derived by calculating the land area that the comparable would require to have the same coverage ratio as the subject. The surplus or deficient area is then multiplied by $15.00 per square foot of land area and then divided by the sale price to arrive at the adjustment. While it is recognized that the land value of the subject is higher than $15.00 per square foot, it must be recognized that the adjustment is for surplus land that is not a separate fee simple site that could be sold off if desired. Brad C. Woodall, MAI 39 Attachment No. 3 The following table shows the calculations for coverage adjustments. Sale 1 Sale 2 Sale 3 Sale 4 Sale 5 Sale Price $1,475,000 $970,000 $785,000 $437,000 $1,344,000 Building Size 7,500 6,485 4,664 2,700 8,400 Net Lot Size 11,500 14,104 6,730 5,663 16,988 Coverage 0.65 0.46 0.69 0.48 0.49 Subject's Coverage 0.85 0.85 0.85 0.85 0.85 Land Size Required 8,824 7,629 5,487 3,176 9,882 Land Size Difference (2,676) (6,475) (1,243) (2,487) (7,106) Land Value $15.00 $15.00 $15.00 $15.00 $15.00 Adjustment ($40,147) ($97,119) ($18,644) ($37,298) (S106.585) Other No other adjustments are required. The following table shows the process of adjusting the comparable market data for differences with the subject that impact value: Brad C. Woodall, MAI 40 Attachment No. 3 IMPROVED SALE ADJUSTMENT CHART Sale No. Subject 1 2 3 4 5 Sale Price N/Ap. $1,475,000 $970,000 $785,000 $437,000 $1,344,000 Recording Date N/Ap. 4/6/18 3/8/17 10/14/16 5/26/16 2/26/16 Size (SF) 6,400 7,500 6,485 4,664 2,700 8,400 Price per SF N/Ap. $196.67 $149.58 $168.31 $161.85 $160.00 Adjustments: Property Rights Fee Simple $0 $0 $0 $0 $0 Adjusted Price N/Ap. $1,475,000 $970,000 $785,000 $437,000 $1,344,000 Financing Market $0 $0 $0 $0 $0 Cash Equiv. Price N/Ap. $1,475,000 $970,000 $785,000 $437,000 $1,344,000 Conditions of Sale None 0.00% 0.00% 0.00% 0.00% 0.00% Cash Equiv. Price N/Ap. $1,475,000 $970,000 $785,000 $437,000 $1,344,000 Market Conditions Current 0.75% 10.50% 13.50% 18.00% 20.25% Adjusted Price N/Ap. $1,486,063 $1,071,850 $890,975 $515,660 $1,616,160 Bond Assessments None 0.00% 0.00% 0.00% 0.00% 0.00% Age/Condition 48/Avg 0.00% 10.26% 0.00% 0.58% 0.00% Location National City 0.00% 0.00% 0.00% 0.00% 0.00% Size 6,400 0.00% 0.00% 0.00% -5.00% 0.00% Tenant Improv. Average 0.00% 0.00% 0.00% 0.00% 0.00% Building Char. Average -5.00% 5.00% 0.00% 5.00% -5.00% Coverage 85% -2.70% -9.06% -2.09% -7.23% -6.60% Other None 0.00% 0.00% 0.00% 0.00% 0.00% Net Adjustment' -7.70% 6.20% -2.09% -6.65% -11.60% Adjusted Price N/Ap. $1,371,612 $1,138,324 $872,331 $481,362 $1,428,767 Adjusted Price/SF N/Ap. $182.88 $175.53 $187.03 $178.28 $170.09 *Net Adjustment for all adjustments following the market conditions adjustment Brad C. Woodall, MAI 41 Attachment No. 3 Conclusion of Value by Direct Sales Comparison The adjusted value range on a price per square foot basis is from $170.09 to $187.03. Sale 1 is the most recent sale and indicates a value slightly above the middle of the range at $182.88 per square foot. Sale 2 indicates a value close to the low end of the range at $175.53 per square foot. It is the most dissimilar sale of the five sales and required the most adjustment, making it the least reliable indicator. Sale 3 indicates the high end of the range at $187.03 per square foot. Sale 4 is a smaller building and indicates a value of $178.28 per square foot. Sale 5 is the most dated transaction and indicates a value at the low end of the range at $170.09 per square foot. There are three current listings in National City that are also considered in the analysis. The property at 1606 Coolidge Avenue is a 2,412 square foot building on a 3,769 square foot lot that is listed for $480,000 or $199.00 per square foot. The listing broker reports there is an accepted full price offer on the property and it should go into escrow within the next week. It is superior to the subject in terms of its size and lower coverage. The property at 225-231 West 16th Street is a 5,275 square foot building on a 8,845 square foot lot that is listed for $1,070,000 or $202.84 per square foot. It is superior to the subject in terms of its lower coverage. The property at 1925 Wilson Avenue is a 4,500 square foot building on a 5,663 square foot lot that is listed for $865,000 or $192.22 per square foot. It is superior to the subject in terms of its lower coverage. Since the listings are not closed sales nor have they gone into escrow, they are not given as much weight as the closed sales. The list prices per square foot are generally consistent with the most recent closed sale (Sale 1). The final consideration in the analysis is the subject listing. The subject property was listed for sale approximately one month ago according to the listing broker at a price of $1,200,000. The listing broker reported receiving an offer of $1,150,000, but the buyer did not have the financial strength to qualify for a loan. The City of National City has made an offer to purchase the property for $995,000 which equates to $155.47 per square foot. The offer price has been accepted by the seller, but the property has not yet gone into escrow. The listing broker is of the opinion that the $995,000 price is a below market transaction and that the owner is willing to sell at a discount because he wants to quickly sell the property and knows that the City of National City can close the deal with no complications. The offer price of $155.47 per square foot is below the range of the adjusted indicators of the comparable sales and it is the appraiser's opinion that the price of $155.47 is below market. Brad C. Woodall, MAI 42 Attachment No. 3 Based on the preceding analysis, a value near the middle of the range indicated by the five closed sales is appropriate for the subject. A value of $180.00 per square foot is estimated for the subject by direct sales comparison. The resulting product is: 6,400 SF x $180.00 = $1,152,000 Rounded to: $1,150,000 Value Indicated By the Sales Comparison Approach - $1,150,000 Brad C. Woodall, MAI 43 Attachment No. 3 INCOME APPROACH The Income Approach to value is based on the premise that the present value of a property is related to the expectation of future benefits (usually income) to be derived from ownership of the property. Purchasers of income producing properties will pay a price which reflects potential income -producing capabilities of the property. The Income Approach involves a four -step process. First, the property's potential gross income is estimated by analysis of lease rates at the subject property and recently signed leases in the market. Then, an appropriate vacancy and collection loss factor is deducted from the potential gross income to indicate an effective gross income. The next step in the Income Approach is development of the operating expenses which are deducted from the effective gross income to arrive at the net operating income. Finally, the net operating income is divided by a market derived capitalization rate for an indication of value. This process in known as direct capitalization. Yield capitalization, better known as discounted cash flow analysis, is another method of valuation that may be used in the Income Approach. While the direct capitalization process utilizes one year's income, yield capitalization generally is performed over a several year holding period, commonly ten years. A value by yield capitalization is estimated by summing the discounted net operating income in each year of a holding period and the present value of the reversion at the end of the holding period. Current Income The subject is currently vacant and there is no existing income. POTENTIAL GROSS INCOME A rental survey was undertaken within the National City district to help estimate potential gross income for the subject improvements. On the following page is a location map of the comparable leases which is followed by a table which summarizes the details of the most helpful lease comparables. Data sheets for each lease transaction (including photographs) are located in the Addenda. Brad C. Woodall, MAI 44 ' f)ELORME DeLormeeltree AiphslO 2011 cc/ S" SZ Lease 2 COMPARABLE LEASES MAP -13 \\ \\ m E0.O m 0 yG Lease 1 T Subject W t4 KYrba1 Park Tf"'� Fs9`t�\y ,_,)::....:---- Lease"`'S 3 �" ,- --- T- �r�/ ¢ yT 2 \ L E ZOS" SZ c W 2p1 " `'j \ E 2,5C 5 1 W 2�T" 5t rn Z W 7151 SI TO 2 \\ vm W 22.NO St OF Data use subject to license. © DeLorme. DeLorme Street Atlas USA® 2011. www.delorme.com W 25" s1 TN MN (11..E( °S"Sj rn m 0' ate'/ m yG m E 14t"SS 9L W 33RP ST T T m m 1 E2�SS 1,� E22©' \ 9L 0 o 7 9 m Scale 1 : 10,400 0 022 400 600 e00 1000 240 1"=866.7ft Data Zoom 14-3 45 Attachment No. 3 SUMMARY OF COMPARABLE LEASES Lease No. 1 2 3 4 Address 1640 Hoover Avenue, Suite A, National City 901 Coolidge Avenue, National City 1706 Hoover Avenue, National City 221 West 33rd Street, National City T.B. Map Code 1309 H-2 1309 J-4 1309 H-2 1309 J-4 Lessee National Mechanical Services Samantha Ward & Mickey Jogeleff Charter Communications Trans Cold Distribution Lease Date 3/17 2/17 11/16 3/16 Lease Size (SF) 4,000 4,300 4,000 8,400 Initial Rate/SF $0.95 $0.91 $1.00 $0.98 Expense Basis Industrial Gross Industrial Gross Industrial Gross Industrial Gross Triple Net Exp. $0.00 $0.00 $0.00 $0.00 Increases Fixed 3.0% per year Fixed 3.0% per year Fixed 3.0% per year Fixed 3.0% per year Lease Term 24 months 60 months 36 months 60 months TI Allowance $0.00 $0.00 $0.00 $0.00 Concessions None One month free None None Building Age 37 years 40 years 33 years 46 years Office % 0% 10% 20% 15% Clear Height 18' 16' 14' 18' Power 400 amps 400 amps 200 amps 1,200 amps Roll -up doors 2 Grade 0 Dock 1 Grade 0 Dock 3 Grade 0 Dock 2 Grade 0 Dock Conclusion of Potential Gross Income The following discussion relates to the analysis of the comparable leases and draws conclusions relative to their rating, either superior or inferior, to the subject property. Each major difference and justification for adjustments is explained in the following sections. Lease Concessions The following table summarizes the lease concessions and applicable adjustments for each comparable. Brad C. Woodall, MAI 46 Attachment No. 3 Comparable No. Concession Adjustment PSF 1 None $0.00 2 1 month free on 60 month term ($0.02) 3 None $0.00 4 None $0.00 Expense Basis The subject's economic rent is estimated on an industrial gross basis. Under this arrangement, the landlord is responsible for paying all operating expenses associated with the building except for utilities. All four lease comparables were leased on an industrial gross basis and no adjustments are required for this category. Market Conditions (Time Adjustment) The comparable leases were signed between March 2016 and March 2017. According to market reports by Colliers International, asking lease rates for industrial space in the County have been relatively stable between first quarter 2016 and first quarter 2018. While Costar data shows wildly fluctuating asking rates over the last two years, brokers active in the market indicate lease rates for industrial space in National City have been relatively stable. An adjustment for market conditions will not be applied to the comparables. Location The leases are all located in the National City district within one mile of the subject. Each of the lease comparables have similar locations as compared to the subject for an industrial building. No location adjustments are necessary. Age/Condition The subject is 48 years old and in average condition overall. The lease comparables ranged in age from 33 to 46 years and were reported to be in average condition. No adjustments are required for age/condition. Size The subject building contains 6,400 square feet. The comparable leases range in size from 4,000 to 8,400 square feet and are close enough in size to the subject to not require size adjustments. No adjustments will be applied for size differences. Brad C. Woodall, MAI 47 Attachment No. 3 Lease Rate Adjustments Adjustments may be required for leases with atypical lease rate adjustments. Typical lease rate adjustments in the market are 3.0% to 4.0% per year or annual increases of $0.05 per square foot per month. All four of the lease comparables have typical lease rate adjustments and no adjustments are required for atypical lease rate adjustments. Tenant Improvements The subject has an office build -out of approximately 3%, but has some un permitted office area which increases the actual build -out. The comparables' office build -outs range from 0% to 20%. The leasing market does not generally pay a premium for second generation tenant improvements. This is supported by examples of lease transactions which show that second generation buildings with above average build -outs lease at about the same rate as buildings with lower more typical build -outs. Brokers interviewed also verified that buildings with atypically high build -outs lease at about the same as buildings with standard build -outs. No adjustments for tenant improvements are necessary for the comparables. While Lease 1 was 100% warehouse space, the leasing broker was of the opinion that it would not have leased for any more with a 10% to 20% office build -out. Additionally, pairing that comparable with the other comparables does not support an adjustment for the lack of an office build -out. Building Characteristics The subject is a concrete block building with a clear height of approximately 15 feet. It has a 200- amp power system and two grade level roll -up doors. Its clear height, power and loading doors are adequate for a building of its size and intended use. Leases 1, 2 and 4 are concrete block buildings, while Lease 3 is a metal building. The comparables have clear heights ranging from 14 to 18 feet, power ratings of 200 to 1,200 amps and adequate loading doors. Lease 4 is slightly superior to the subject due to its higher clear height and higher power, but Lease 3 is inferior due to its metal construction and lower clear height. Pairing those two comparables does not support adjustments for the differing building characteristics. Therefore, no adjustments will be applied to the comparables for the differing characteristics. Coverage The subject has a coverage ratio of 85%. The comparables' coverage ratios range from 40% to 71 % on the net usable land area. Leases 1, 3 and 4 have coverage ratios in the range of 40% to 54% and are adjusted downward by 5.0% for their lower coverage. Lease 2 has a coverage ratio of 71% and does not require an adjustment for coverage. Brad C. Woodall, MAI 48 Attachment No. 3 Other No other adjustments are necessary. Following is an adjustment chart which summarizes the adjustments applied to each of the comparable leases. LEASE COMPARABLE ADJUSTMENT CHART Lease No. Subject 1 2 3 4 Initial Lease Rate N/Ap. $0.95 $0.91 $1.00 $0.98 Lease Date Current 3/17 2/17 11/16 3/16 Size (SF) 6,400 4,000 4,300 4,000 8,400 Adjustments: Lease Concessions None $0.00 ($0.02) $0.00 $0.00 Effective Rent/SF/Mo. N/Ap. $0.95 $0.89 $1.00 $0.98 Expense Basis Ind. Gross $0.00 $0.00 $0.00 $0.00 Adjusted Rent/ SF/Mo. N/Ap. $0.95 $0.89 $1.00 $0.98 Market Conditions Current 0.00% 0.00% 0.00% 0.00% Adjusted Rent/SF/Mo. N/Ap. $0.95 $0.89 $1.00 $0.98 Location National City $0.00 $0.00 $0.00 $0.00 Age/Condition Average $0.00 $0.00 $0.00 $0.00 Size 6,400 $0.00 $0.00 $0.00 $0.00 Lease Rate Adjustments N/Ap. $0.00 $0.00 $0.00 $0.00 Tenant Improvements Average $0.00 $0.00 $0.00 $0.00 Building Characteristics Average $0.00 $0.00 $0.00 $0.00 Coverage 85% ($0.05) $0.00 ($0.05) ($0.05) Other Fenced yard $0.00 $0.00 $0.00 $0.00 Adjusted Rent/SF/Mo. N/Ap. $0.90 $0.89 $0.95 $0.93 After adjustment, the comparable leases indicate a range of effective rental rates between $0.89 and $0.95 per square foot on an industrial gross basis. Leases 1 and 2 indicate rates at the low end of the range at $0.89 to $0.90 per square foot per month, while Leases 3 and 4 indicate rates at the high end of the range at $0.93 to $0.95 per square foot per month. Brad C. Woodall, MAI 49 Attachment No. 3 Based on analysis of the comparables, a rate near the middle of the range at $0.92 per square foot per month on an industrial gross basis is estimated for the subject. The annual potential gross income for the subject building is therefore calculated as follows: 6,400 SF x $0.92 = $5,888.00 per mo. x 12 = $70,656 per yr. VACANCY AND COLLECTION LOSS In the District Description section of the report it was reported that the vacancy rate in the National City industrial market was about 1.1 % as of the end of first quarter of 2018 according to a report by Costar. Vacancy has ranged from 1.1 % to 2.3% over the last two years and has averaged 1.7%. The subject is currently vacant. It is fairly typical for buyers of single tenant industrial buildings to utilize vacancy and collection loss factors of between 0.0% and 5.0% when the market is operating close to stabilized occupancy. The National City market is now operating at a level of occupancy typically considered to be above stabilized, and there is low potential for new inventory to be added to the market due to the built -out nature of the district. A 2.0% allowance appears appropriate to account for physical vacancy as well as collection loss over the economic life. EXPENSES The market rent estimated for the subject is on an industrial gross expense basis where the landlord pays for property taxes, insurance, and exterior maintenance and repairs, and may also incur costs for professional property management. Sources for estimating expenses are: 1) historical expense data from comparable properties, and 2) published expense surveys in the market area. Since operating statements were not available to the appraiser, the expenses were estimated primarily based on historical expense data from comparable properties as well as published expense surveys. Following is an estimate of the subject's expenses. Real Estate Taxes - are estimated at 1.13906% of the value indicated by the Income Approach plus special assessments of $261.32 and equate to $9,659. Insurance - Expense comparables are generally in the range of $0.15 to $0.25 per square foot for insurance. Insurance is estimated at $0.20 per square foot per year or $1,280. Brad C. Woodall, MAI 50 Attachment No. 3 Grounds Maintenance - Expense comparables indicate grounds maintenance expenses of $0 to $500 per month and vary largely based on the amount of landscaping. The subject does not have much landscaping. Grounds maintenance is estimated at $100 per month or $1,200 per year. Maintenance & Repairs - Expense comparables indicate a range of $0.25 to $0.75 per square foot for maintenance and repairs. A figure of $0.50 per square foot or $3,200 per year is estimated for repairs and maintenance. Management - A management fee of 3% of the effective gross income is applied for professional property management. Utilities - under the industrial gross expense basis, the tenant pays for utilities directly to the service provider including gas, electric, water and sewer expenses. As a single tenant building, there are no utility expenses for the owner. Trash Removal - under the industrial gross expense basis the tenant pays for trash removal directly to the service provider. As a single tenant building, there are no trash removal expenses for the owner. Legal & Professional Fees - As a single tenant building leased to a single tenant, legal and professional fees are not typically incurred and are not included. Reserves - For small single tenant industrial properties such as the subject, in most cases it has been found that buyers do not make an allowance for reserves. Reserves were not included in any of the investor sale comparables summarized later in the report and an allowance for reserves will not be made. Miscellaneous Expenses - an allowance of0.5% of effective gross income is made for miscellaneous expenses. The following table summarizes the projected expenses for the subject. Brad C. Woodall, MAI 51 Attachment No. 3 Projected Real Estate Taxes $9,659 Insurance 1,280 Grounds Maintenance 1,200 Maintenance & Repairs 3,200 Management 2,077 Utilities 0 Trash Removal 0 Legal & Professional 0 Reserves 0 Miscellaneous 346 Total $17,763 Per Rentable Square Foot $2.78 Projected annual operating expenses for the subject property are $17,763. That figure equates to $2.78 per square foot per year or $0.23 per square foot per month. Lease comparables in the market area have triple net expenses reported at $0.12 to $0.30 per square foot and vary primarily due to the tax basis of the property. Properties that have not transferred in many years generally have triple net expenses at the low end of the range while properties that recently transferred have triple net expenses at the high end of the range. Overall, the estimated expenses appear reasonable based on comparison to expense comparables. RECONSTRUCTED OPERATING STATEMENT Having estimated market rent, vacancy and collection loss and operating expenses, a reconstructed operating statement is made to show the effect of these estimates on the income producing capacity of the subject property. Following is the reconstructed operating statement for the subject property. Brad C. Woodall, MAI 52 Attachment No. 3 RECONSTRUCTED OPERATING STATEMENT Potential Gross Income $70,656 Less Vacancy and Collection Loss (2%) (1,413) Effective Gross Income $69,243 Less Operating Expenses (17,763) Net Operating Income $51,480 CAPITALIZATION The final step in the Income Approach is the capitalization of the projected net operating income by a market derived rate. Net operating income divided by the overall capitalization rate equals total property value. One method of arriving at an overall capitalization rate is undertaken; the direct method of capitalization. In this method, the overall rate is derived from the sales transactions discussed in the Sales Comparison Approach. Since none of the sales indicated a capitalization rate, additional research was conducted to locate investor sales from which to extract capitalization rates. Following is a summary of the most similar investor sales. Capitalization rates extracted from the sales are based on actual income at the time of sale. SUMMARY OF COMPARABLE INVESTOR SALES \u. Address Recording Date Size (SF) Office Pct. Price/SF R0 A 1369-75 Cuyamaca St. El Cajon 4/19/18 5,800 45% $166.38 6.65% B 630 Enterprise St./615 Venture St., Escondido 4/16/18 11,672 20% $212.22 6.90% C 295 Trade Street, San Marcos 11/30/17 9.720 10% $174.38 6.14% D 2290 Meyers Avenue Escondido 9/7/17 3,800 25% $150.00 6.00% E 2381 Boswell Road Chula Vista 2/24/17 14,811 40% $209.30 6.58% Sale A is located at 1369-75 North Cuyamaca Street in El Cajon. This property consists of a 5,800 square foot, single tenant, industrial condo unit. The property was approximately 41 years old at the time of sale and in average condition. It is improved with approximately 45% office space. The property sold in April 2018 for $965,000 or $166.38 per square foot. At the time of sale, it was Brad C. Woodall, MAI 53 Attachment No. 3 leased to a single -tenant and the indicated capitalization rate is 6.65%. The lease had approximately five years remaining on the term. Sale B is located at 630 Enterprise Street and 615 Venture Street in Escondido. This property consists of two single tenant industrial buildings that total 11,672 square feet. The buildings were in average condition and estimated to be approximately 40 to 50 years old at the time of sale. The average office build -out was about 20%. The property sold in April 2018 for $2,477,000 or $212.22 per square foot. At the time of sale, both buildings were leased to a single -tenant and the indicated capitalization rate is 6.90%. There were four years remaining on the lease. Sale C is located at 295 Trade Street in San Marcos. This property consists of a 9,720 square foot, single tenant, industrial building. The building was approximately 29 years old at the time of sale and in average condition. It is improved with approximately 10% office space. The property sold in November 2017 for $1,695,000 or $174.38 per square foot. At the time of sale, it was leased to a single -tenant and the indicated capitalization rate is 6.14%. Sale D is located at 2290 Meyers Avenue in Escondido. This is a 3,800 gross square foot, single - tenant industrial building of concrete block construction. It was approximately 38 years old at the time of sale and in average condition. The property sold in September 2017 for $570,000 or $150.00 per square foot. The building is improved with approximately 25% office space. This was a sale/leaseback at a 6.0% capitalization rate. Sale E is located at 2381 Boswell Road in Chula Vista. This property consists of a 14,811 square foot, single tenant, industrial building. The building was approximately 28 years old at the time of sale and in average condition. It is improved with approximately 40% office space. The property sold in February 2017 for $3,100,000 or $209.30 per square foot. At the time of sale, it was leased to a single -tenant and the indicated capitalization rate is 6.58%. The tenant was a local tenant and had just signed a new seven year lease. The capitalization rates indicated by the comparable investor sales ranged from 6.00% to 6.90%. Sale A indicates a capitalization rate of 6.65% and is rated inferior to the subject since it is a condo instead of a free-standing building. Sale B indicates the high end of the range at 6.90% and is also rated inferior as one of the buildings was of metal construction. A capitalization rate lower than indicated by both Sales A and B would be expected for the subject. Sales C and D indicate the low end of the range at 6.00% to 6.14% and Sale E indicates a rate at the upper middle of the range at 6.58%. A rate within the range indicated by Sales C, D and E appears appropriate for the subject. Brad C. Woodall, MAI 54 Attachment No. 3 A final factor taken into consideration is the fact that the buyers of the investor sales did not utilize a vacancy and collection loss factor, while the NOI projected for the subject includes a 2.0% vacancy and collection loss factor. The sales' capitalization rates would be about 15 basis points lower if a 2.0% vacancy and collection loss factor was utilized. Based on analysis of the comparable sales, a capitalization rate of 6.25% is adopted for the analysis. Conclusion of Stabilized Value by the Income Approach The value indication by the Income Approach is derived by dividing the estimated net operating income by the overall capitalization rate selected above. The computation is: $51,480 - 0.0625 = $823,686 Rounded to: $825,000 Value Indicated by the Income Approach - $825,000 Brad C. Woodall, MAI 55 Attachment No. 3 RECONCILIATION Reconciliation is the final step in the appraisal. The valuation process is reviewed and the strengths and weakness of the indications of value from each approach are considered. It culminates in the final estimate of market value. The reconciliation analysis is based on three criteria: the appropriateness, accuracy and quantity of evidence. Two approaches to value were used: the Sales Comparison Approach and the Income Approach. The two approaches yielded the following indications of the "as is" market value of the fee simple interest: Sales Comparison Approach: $1,150,000 Income Approach: $825,000 Sales Comparison Approach The Sales Comparison Approach is appropriate because this is the approach used by most buyers in the owner/user market. The most likely buyer of the property would be an owner/user. According to market participants, the price per square foot of gross building area is the most commonly used unit of comparison by owner/users. The accuracy of the Sales Comparison Approach is believed to be fairly high as the adjustments applied in the price per square foot analysis were market supported. The quality and quantity of data used in the price per square foot analysis is good and the estimate of value is felt to be reliable. Income Approach The Income Approach is most appropriate for income producing property. The accuracy of the Income Approach is good. The estimated market lease rates were supported by comparables in the subject's district and the vacancy and collection loss factor and operating expenses were felt to be well supported. Additionally, there were sufficient investor sales to support a capitalization rate. There is a large difference between the indications from the Sales Comparison Approach and the Income Approach. Of the five comparable sales utilized in the Sales Comparison Approach, four were purchased by owner/users. Brokers active in the market confirmed a large discrepancy between owner/user sales and investor sales. For those reasons, the Income Approach is given no weight in the analysis. Brad C. Woodall, MAI 56 Attachment No. 3 Based on the preceding analysis, it is concluded that "as is" market value of the fee simple interest as of April 26, 2018, was: ONE MILLION ONE HUNDRED FIFTY THOUSAND DOLLARS $1,150,000 Brad C. Woodall, MAI 57 Attachment No. 3 EXPOSURE AND MARKETING TIME Exposure time is defined as follows: "The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of appraisal".' The best support for estimating an appropriate exposure time for the subject is to examine the marketing times of the comparable sales. Brokers reported that the comparable sales were sold in marketing times ranging from one month to seven months. The listing broker for the subject reports that it has been on the market for about one month. Most brokers reported there is good demand for industrial buildings in the subject's market area. Based on marketing times of the comparable sales and also considering input from brokers active in the market, it is estimated that a reasonable exposure time for the subject property is four months. Marketing time is the amount of time that it would take to achieve a sale, assuming the property were to be placed on the market immediately. Since interest in industrial buildings is about the same as when the comparable sales took place, it is reasoned that the marketing time would be the same as the exposure time. A reasonable estimate of marketing time is four months, provided the building is priced competitively. 4 USPAP 2018-19 Edition, The Appraisal Foundation Brad C. Woodall, MAI 58 Attachment No. 3 ADDENDA Brad C. Woodall, MAI Al Attachment No. 3 COMPARABLE IMPROVED SALE PHOTOGRAPHS IMPROVED SALE COMPARABLE NO. 1 IMPROVED SALE COMPARABLE NO. 3 IMPROVED SALE COMPARABLE NO. 5 IMPROVED SALE COMPARABLE NO. 2 IMPROVED SALE COMPARABLE NO. 4 Brad C. Woodall, MAI A2 Attachment No. 3 COMPARABLE IMPROVED SALE NO. 1 LOCATION: THOMAS BROS. MAP PAGE: ASSESSOR'S PARCEL NO.: BUYER: SELLER: SALE PRICE: FINANCING: RECORDED: DOCUMENT NO.: IMPROVEMENT DESCRIPTION: INTEREST TRANSFERRED: LAND AREA: COVERAGE: ZONING: PARKING: INCOME AND INDICATORS: Potential Gross Income: Vacancy & Collection Loss: Effective Gross Income: Operating Expenses: Net Operating Income: Sale Price per Square Foot: Gross Income Multiplier Overall Capitalization Rate: Expenses per Square Foot: Expenses as % of EGI: SOURCE: 1533 Wilson Avenue, National City 1309 H-2 559-065-04 & 05 Pro Tank Holdings, LLC Hankins Trust $1,475,000 $368,750 (25%) down; 1st TD loan of $1,106,250 from Wells Fargo Bank. April 6, 2018 18-0137015 A one-story concrete block industrial building which contains 7,500 gross square feet. The building was in average condition at the time of sale with no reported deferred maintenance. Age 41 Years Office Clear Power Doors 35% 20' 200 amp 3 grade 0 dock Fee Simple 11,500 SF 65% CL in Westside Specific Plan 8 spaces; 1.07 spaces per 1,000 SF N/Ap. (Owner/user) N/Ap. N/Ap. N/Ap. N/Ap. $196.67 N/Ap. N/Ap. N/Ap. N/Ap. Marck Lewkowitz, selling broker Brad C. Woodall, MAI A3 Attachment No. 3 COMPARABLE IMPROVED SALE NO. 2 LOCATION: THOMAS BROS. MAP PAGE: ASSESSOR'S PARCEL NO.: BUYER: SELLER: SALE PRICE: FINANCING: RECORDED: DOCUMENT NO.: IMPROVEMENT DESCRIPTION: INTEREST TRANSFERRED: LAND AREA: COVERAGE: ZONING: PARKING: INCOME AND INDICATORS: Potential Gross Income: Vacancy & Collection Loss: Effective Gross Income: Operating Expenses: Net Operating Income: Sale Price per Square Foot: Gross Income Multiplier Overall Capitalization Rate: Expenses per Square Foot: Expenses as % of EGI: SOURCE: 1200 Harbor Drive, National City 1309 G-2 559-010-08 FC Holdings, LP Robert Patterson $970,000 $97,000 (10%) down; 1' TD loan of $535,000 and 2"d March 8, 2017 17-0106490 A one-story metal industrial building which contains 6,485 gross square feet. The building was in fair to average condition at the time of sale. The buyer planned to remodel the improvements at a cost of $110,000. Age Office Clear Power Doors 50+ Years 15% 18' 200 amp 6 grade 0 dock Fee Simple 14,104 SF 46% IMCZ (Industrial) 6 spaces; 0.93 spaces per 1,000 SF N/Ap. (Owner/user) N/Ap. N/Ap. N/Ap. N/Ap. $149.58 N/Ap. N/Ap. N/Ap. N/Ap. Chris Holder, listing broker Brad C. Woodall, MAI A4 Attachment No. 3 COMPARABLE IMPROVED SALE NO. 3 LOCATION: THOMAS BROS. MAP PAGE: ASSESSOR'S PARCEL NO.: BUYER: SELLER: SALE PRICE: FINANCING: RECORDED: DOCUMENT NO.: IMPROVEMENT DESCRIPTION: INTEREST TRANSFERRED: LAND AREA: COVERAGE: ZONING: PARKING: INCOME AND INDICATORS: Potential Gross Income: Vacancy & Collection Loss: Effective Gross Income: Operating Expenses: Net Operating Income: Sale Price per Square Foot: Gross Income Multiplier Overall Capitalization Rate: Expenses per Square Foot: Expenses as % of EGI: SOURCE: 1840 Wilson Avenue, National City 1309 H-3 559-101-02 Paul Corriere, LP Horn Family Trust $785,000 All cash October 14, 2016 16-0552934 A one-story concrete block industrial building containing 4,664 gross square feet. It was in average condition at the time of sale with no deferred maintenance. Age Office Clear Power Doors 39 Years 7% 18' 200 amp 2 grade 0 dock Fee Simple 6,730 SF 69% CL in Westside Specific Plan 5 1.07 spaces per 1,000 SF N/Ap. N/Ap. N/Ap. N/Ap. N/Ap. $168.31 N/Ap. N/Ap. N/Ap. N/Ap. Eric Wiese, listing broker (Owner/user) Brad C. Woodall, MAI A5 Attachment No. 3 COMPARABLE IMPROVED SALE NO. 4 LOCATION: THOMAS BROS. MAP PAGE: ASSESSOR'S PARCEL NO.: BUYER: SELLER: SALE PRICE: FINANCING: RECORDED: DOCUMENT NO.: IMPROVEMENT DESCRIPTION: INTEREST TRANSFERRED: LAND AREA: COVERAGE: ZONING: PARKING: INCOME AND INDICATORS: Potential Gross Income: Vacancy & Collection Loss: Gross Income: Operating Expenses: Net Operating Income: Sale Price per Square Foot: Effective Gross Income Multiplier Overall Capitalization Rate: Expenses per Square Foot: Expenses as % of EGI: SOURCE: 1640 Coolidge Avenue, National City 1309 H-2 559-083-06 Brasseur Family Trust Cordov Trust $437,000 $43,700 (10%); Ie` TD loan of $218,500 and 2" d TD loan of $174,800 from JP Morgan Chase Bank. May 26, 2016 16-0258985 A one-story metal industrial building containing 2,700 square feet. It was in average condition at the time of sale with the exception of approximately $3,000 in deferred maintenance. Age 43 Years Office Clear Power 19% 12' 200 amp Fee Simple 5,663 SF 48% Residential in Westside Specific Plan 2 0.74 spaces per 1,000 SF N/Ap. (Owner/user) N/Ap. N/Ap. N/Ap. N/Ap. $161.85 N/Ap. N/Ap. N/Ap. N/Ap. Cody Evans, listing broker Doors 1 grade 0 dock Brad C. Woodall, MAI A6 Attachment No. 3 COMPARABLE IMPROVED SALE NO. 5 LOCATION: THOMAS BROS. MAP PAGE: ASSESSOR'S PARCEL NO.: BUYER: SELLER: SALE PRICE: FINANCING: RECORDED: DOCUMENT NO.: IMPROVEMENT DESCRIPTION: INTEREST TRANSFERRED: LAND AREA: COVERAGE: ZONING: PARKING: INCOME AND INDICATORS: Potential Gross Income: Vacancy & Collection Loss: Gross Income: Operating Expenses: Net Operating Income: Sale Price per Square Foot: Effective Gross Income Multiplier Overall Capitalization Rate: Expenses per Square Foot: Expenses as % of EGI: SOURCE: 221 West 33' Street, National City 1309 J-4 562-330-40 West 33rd Street, LLC West Family Trust $1,344,000 $201,600 (15%); 1" TD loan of $1,142,400 from Wells Fargo Bank. February 26, 2016 16-0084769 A one-story concrete block industrial building containing 8,400 square feet. It was in average condition at the time of sale with no reported deferred maintenance. Age 46 Years Office Clear Power Doors 15% 18' 1,200 amp 2 grade 0 dock Fee Simple 16,988 SF 49% ML-CZ (Industrial) 15 1.79 spaces per 1,000 SF N/Ap. N/Ap. N/Ap. N/Ap. N/Ap. $160.00 N/Ap. N/Ap. N/Ap. N/Ap. Nick Price, selling broker Brad C. Woodall, MAI A7 Attachment No. 3 LEASE COMPARABLE PHOTOGRAPHS COMPARABLE LEASE NO. 1 COMPARABLE LEASE NO. 3 COMPARABLE LEASE NO. 2 COMPARABLE LEASE NO. 4 Brad C. Woodall, MAI A8 Attachment No. 3 LEASE COMPARABLE NO. 1 LOCATION: 1640 Hoover Avenue, Suite A, National City THOMAS BROS. MAP PAGE: 1309 H-2 LESSEE: National Mechanical Services LESSOR: Alton Beauchamp DATE SIGNED: 3/17 LEASE TERM: 24 months BASE RENT/SF/MO.: $0.95 INCREASES: Fixed 3.0% per year CONCESSIONS: None 1ST YEAR EFFECTIVE RENT: $0.94 TI ALLOWANCE ($/SF): $0.00 EXPENSE BASIS: Industrial Gross Who Pays: Lessor Lessee Property Taxes (x) ( ) Fire Insurance (x) ( ) Utilities ( ) (x) Repairs and maintenance Exterior (x) ( ) Interior ( ) (x) TRIPLE NET EXPENSES: $0.00 SUITE SIZE (SF): 4,000 BUILDING DESCRIPTION: An 8,000 square foot, two -tenant, concrete block industrial building of average quality and condition. Age Office Clear Power Doors 37 years 0% 18' 400 amps 2 grade 0 dock PARKING RATIO (spaces per 1.0 1,000 SF of building area): SOURCE: Phil Emery, leasing broker Brad C. Woodall, MAI A9 Attachment No. 3 LEASE COMPARABLE NO. 2 LOCATION: 901 Coolidge Avenue, National City THOMAS BROS. MAP PAGE: 1309 J-4 LESSEE: Samantha Ward & Mickey Jogeleff LESSOR: Abraham & Melba Cunanan DATE SIGNED: 2/17 LEASE TERM: 60 months BASE RENT/SF/MO.: $0.91 INCREASES: Fixed 3.0% per year CONCESSIONS: One month free 1ST YEAR EFFECTIVE RENT: $0.89 TI ALLOWANCE ($/SF): $0.00 EXPENSE BASIS: Industrial Gross Who Pays: Lessor Lessee Property Taxes (x) ( ) Fire Insurance (x) ( ) Utilities ( ) (x) Repairs and maintenance Exterior (x) ( ) Interior ( ) (x) TRIPLE NET EXPENSES: $0.00 BUILDING SIZE (SF): 4,300 BUILDING DESCRIPTION: A 4,300 square foot, single -tenant, concrete block industrial building of average quality and condition. Age Office Clear Power Doors 40 years 10% 16' 400 amps 1 grade 0 dock PARKING RATIO (spaces per 1.0 1,000 SF of building area): SOURCE: Mark Lewkowitz, leasing broker Brad C. Woodall, MAI A10 Attachment No. 3 LEASE COMPARABLE NO. 3 LOCATION: 1706 Hoover Avenue, National City THOMAS BROS. MAP PAGE: 1309 H-2 LESSEE: Charter Communications LESSOR: West Family Trust DATE SIGNED: 11/16 LEASE TERM: 36 months BASE RENT/SF/MO.: $1.00 INCREASES: Fixed 3.0% per year CONCESSIONS: None 1ST YEAR EFFECTIVE RENT: $1.00 TI ALLOWANCE ($/SF): $0.00 EXPENSE BASIS: Industrial Gross Who Pays: Lessor Lessee Property Taxes (x) ( ) Fire Insurance (x) ( ) Utilities ( ) (x) Repairs and maintenance Exterior (x) ( ) Interior ( ) (x) TRIPLE NET EXPENSES: $0.00 BUILDING SIZE (SF): 4,000 BUILDING DESCRIPTION: A 4,000 square foot, single -tenant, metal industrial building of average quality and condition. Age Office Clear Power Doors 33 years 20% 14' 200 amps 3 grade 0 dock PARKING RATIO (spaces per 1.0 1,000 SF of building area): SOURCE: Nick Price, leasing broker Brad C. Woodall, MAI All Attachment No. 3 LEASE COMPARABLE NO. 4 LOCATION: 221 West 33rd Street, National City THOMAS BROS. MAP PAGE: 1309 J-4 LESSEE: Trans Cold Distribution LESSOR: West 33rd Street, LLC DATE SIGNED: 3/16 LEASE TERM: 60 months BASE RENT/SF/MO.: $0.98 INCREASES: Fixed 3.0% per year CONCESSIONS: None 1ST YEAR EFFECTIVE RENT: $0.98 TI ALLOWANCE ($/SF): $0.00 EXPENSE BASIS: Industrial Gross Who Pays: Lessor Lessee Property Taxes (x) ( ) Fire Insurance (x) ( ) Utilities ( ) (x) Repairs and maintenance Exterior (x) ( ) Interior ( ) (x) TRIPLE NET EXPENSES: $0.00 BUILDING SIZE (SF): 8,400 BUILDING DESCRIPTION: An 8,400 square foot, single -tenant, concrete block industrial building of average quality and condition. Age Office Clear Power Doors 46 years 15% 18' 1,200 amps 2 grade 0 dock PARKING RATIO (spaces per 1.8 1,000 SF of building area): SOURCE: Evan McDonald, leasing broker Brad C. Woodall, MAI A 12 Attachment No. 3 76' 20' TOTAL Sketch by .la moor. Inc 20' Office Area Warehouse Area 76' Area Calculations Summary Ul First Roor Total Llving Area (Rounded): 6400Sgft 6400 Sq ft TOTAL Sketch software by a la mode, inc.1-800-alamode 413 Attachment No. 3 GENERAL Principal: QUALIFICATIONS OF BRAD C. WOODALL, MAI Brad C. Woodall, MAI 9922 Winecrest Road San Diego, CA 92127 (858) 876-2510 PROFESSIONAL EXPERIENCE 01/95 to present: Principal Appraiser - Brad C. Woodall, MAI 08/92 to 12/94: Associate Appraiser - Alan M. Wilson & Associates 09/88 to 07/92: Associate Appraiser -David J. Yerke, Inc. & Dennis B. Cunningham FORMAL EDUCATION AND SPECIAL TRAINING 1986-88: B.S. Degree San Diego State University School of Business Administration Major - Real Estate 1984-86: California Polytechnic University at San Luis Obispo APPRAISAL AFFILIATIONS MAI member in the Appraisal Institute (No. 10577) Served on Appraisal Institute's San Diego Chapter Experience Review Committee State Certified General Appraiser (Certificate No. AG015729) PROPERTY TYPES APPRAISED Commercial, residential, industrial, unimproved land and special purpose properties. SELECTED APPRAISAL INSTITUTE COURSES Real Estate Appraisal Principals Basic Valuation Procedures Uniform Standards of Professional Practice Capitalization Theory and Techniques (Part 1B-A) Capitalization Theory and Techniques (Part 1B-B) Case Studies in Real Estate Valuation Report Writing and Valuation Analysis Comprehensive Appraisal Workshop Highest and Best Use and Market Analysis New Technology for Real Estate Appraisers Using HP 12C Financial Calculator Allocating Components of Going Concern Appraisals Federal and California Statutory and Regulatory Laws Residential Design & Functional Utility Real Estate Finance, Value and Investment Performance Subdivision Valuation Dynamics of Subdivision Appraising Applying Economic Forecasts Effective Appraisal Writing Appraising From Blueprints Scope of Work Valuation of Unique Properties Evaluating Commercial Construction Business Practices and Ethics Land Appraisal Introduction to Green Buildings What Does It Cost to Operating That Building The Discounted Cash Flow Model Analyzing Distressed Real Estate A14 Attachment No. 3 APPRAISAL ASSIGNMENTS HAVE BEEN PREPARED FOR THE FOLLOWING (Some in association with other appraisers) LENDERS Bank of America Bank of California Bank of Rancho Bernardo Bank of Salinas California Bank & Trust City National Bank First Bank & Trust First Citizens Bank First Fidelity Thrift & Loan First National Bank First National Bank of North County First Pacific National Bank General Bank HomeStreet Bank Imperial Thrift & Loan Association Indymac Bank JP Morgan Chase Bank Key Bank Manufacturers Bank Nippon Credit Bank San Dieguito National Bank San Diego County Credit Union Santa Barbara Bank & Trust Torrey Pines Bank Union Bank Wells Fargo Bank GOVERNMENTAL AGENCIES CalTrans City of Del Mar City of San Diego City of Vista County of San Diego FDIC Governmental Services Agency (GSA) ATTORNEYS Anderson, Goldberg & Waldron Gibson, Dunn & Crutcher Fabozzi & Miller Lincoln, Gustafson & Cercos Luce, Forward, Hamilton & Scripps Procopio OTHERS Atlantic Richfield Corporation GMAC Mortgage Kaiser Permanente McMillin Companies Richmond American SDG&E A15 RESOLUTION NO. 2018 — RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE CITY MANAGER TO EXECUTE THE STANDARD OFFER, AGREEMENT, AND ESCROW INSTRUCTIONS FOR THE PURCHASE OF REAL PROPERTY LOCATED AT 1430 HOOVER AVENUE IN NATIONAL CITY IN ORDER TO PROVIDE SECURE STORAGE FOR THE NATIONAL CITY POLICE DEPARTMENT AND OTHER DEPARTMENTS' OVERSIZED VEHICLES AND TRAILERS, FOR A TOTAL SALES PRICE OF $973,350 AND THE PAYMENT OF CLOSING COSTS NOT TO EXCEED $10,000, AND $100,000 FOR TENANT IMPROVEMENTS; AND AUTHORIZING THE ESTABLISHMENT OF A BUDGET APPROPRIATION IN THE AMOUNT OF $200,000 FROM AVAILABLE FUND BALANCE OF THE ASSET FORFEITURE FUND, AND $215,000 FROM AVAILABLE FUND BALANCE OF THE DEVELOPMENT IMPACT FEES FUND WHEREAS, as part of a pending relocation process, the National City Police Department ("NCPD") and the Public Works Department ("PW") need space to store vehicles and supplies that were previously stored at the Public Works Yard located at 2100 Hoover Avenue (the "locations"); and WHEREAS, the City demolished the facility at the location, conducted required environmental remediation, and sold the property to the National City Housing Authority for the development of a 201 unit affordable housing project known as WI-TOD or the Paradise Creek Affordable Housing Project; and WHEREAS, the NCPD has been actively searching for a location to securely store their Mobile Command Vehicle, SWAT armored vehicle and support vehicles, traffic radar trailers, DUI trailer, Crisis Negotiations trailer, surveillance van, and motorcycles; and WHEREAS, the real property ("Property") located at 1430 Hoover Avenue is 0.18 acres with a 6,400 square foot warehouse ("Warehouse") that is available for purchase; and WHEREAS, after an extensive search, the Warehouse was found to be ideal for NCPD's and PW's vehicle and equipment storage needs; and WHEREAS, City staff proposed to negotiate the purchase of the Property during a Closed Session Meeting of the City Council on April 17, 2018, and received direction to make an offer on the Property; and WHEREAS, the City procured an appraisal for the Property, which was appraised at $1,150,000; and WHEREAS, City staff negotiated a sales price of $973,350 and the payment of closing costs not to exceed $10,000; and WHEREAS, City staff negotiated $100,000 in needed tenant improvements, including modifications to make the Warehouse ADA compliant. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of National City hereby authorizes the City Manager or designee to execute a Purchase and Sale Agreement and any related escrow documents necessary to complete the purchase of the property located at 1430 Hoover Avenue in order to provide secure storage for Police Resolution No. 2018 — Page Two Department and other departments' oversized vehicles and trailers, for a total sales price of $973,350, and the payment of closing costs not to exceed $10,000, and $100,000 for tenant improvements. Said Agreement is on file in the office of the City Clerk. BE IT FURTHER RESOLVED, that the City Council authorizes a budget appropriation of $200,000 from available fund balance of the Asset Forfeiture Fund and $215,000 from available fund balance of the Development Impact Fees Fund. PASSED and ADOPTED this 15th day of May, 2018. ATTEST: Michael R. Dalla, City Clerk APPROVED AS TO FORM: Angil P. Morris -Jones City Attorney Ron Morrison, Mayor CITY OF NATIONAL CITY Office of the City Clerk 1243 National City Blvd., National City, California 91950-4397 619-336-4228 Michael R. Dalla, CMC - City Clerk SENTER FAMILY TRUST Purchase and Sale Agreement 1430 Hoover Avenue Gregory Rose (Housing & Economic Development) Forwarded Copy of Fully Executed Original Agreement to Senter Family Trust.