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HomeMy WebLinkAboutRP 86-03; Jefferson House II; Redevelopment Permits (RP) (4)Progressive Realty Advisors Loan Number: 4000443 S JAN t 6 ^uuu i IRVINE 0^?^»C> SUMMARY APPRAISAL REPORT OF: A 57 Unit Senior's Apartment Complex "Jefferson House 2" LOCATED AT: 2848 Jefferson Street Carlsbad, CA 92008 FOR: Financial Institutional Partners Mortgage Company One Venture, Suite 300 Irvine, California 92618 AS OF: January 19, 2000 BY: James J. Hardick Certified General Real Estate Appraiser AG002533 PRAAptLF 6/1/98 Progressive Realty Advisors Loan Number: 4000443 Financial Institutional Partners Mortgage Company One Venture, Suite 300 Irvine, Califomia 92618 File Number: 4000443 Property Address: 2848 Jefferson Street Carlsbad, CA 92008 In accordance with your request and authorization, I have prepared a compiete appraisal for the purpose of formulating and expressing an opinion of market value, as defined herein, ofthe Fee Simple interest ofthe above referenced property. The value estimates herein are subject to the contingent and limiting conditions, as stated within the attached summary appraisal report and addenda. I certify that I have no interest, present or prospective, in the property appraised; and that my employment is not contingent upon the values derived or any other contingency of employment. This is a summary appraisal report which has been prepared for financing purposes in conformity with the standards and reporting requirements of Client, the Uniform Standards of Professional Appraisal Practice (USPAP) and OTS standards. The primary intended users is Financial Institutional Partners Mortgage Company, its loan committees and pertinent regulatory agencies. This information may also be used by any actual or prospective purchaser, transferee, assignee, or servicer of the mortgage loan as designated by Financial Institutional Partners. This report has no other purpose and should not be relied upon by any other person or entity. As a result of my investigation and analysis, it is my conclusion that the "as is" market value ofthe subject property, as ofthe appraisal date of January 19, 2000, is "AS IS" Value Estimate $3,850,000 The subject property is currently operating at a stabilized level with no deferred maintenance or rent loss deductions necessary. Therefore, it is also my conclusion that the estimated stabilized market value estimate ofthe subject property, as of January 19, 2000, is: Stabilized Value Estimate $3,850,000 The attached appraisal report contains the descriptions of the subject property, factual data, and my analysis of that data upon which the value conclusions are predicated. The value conclusions stated above are based on existing market conditions and a marketing/exposure period of 3 to 6 months. Respectfully Submitted, Tames J. Haraick AG002533 Progressive Realty Advisors 31379 Corte Sonora, Temecula, CA 92592 Phone:909-676-8691 Fax:909-676-7234 PRAAptLF 6/1/98 Progressive Realty Advisors Loan Number: 4000443 SUMMARY OF SALIENT FACTS AND CONCLUSIONS Property Information Loan Number: 4000443 Project Type: 3-story elevator (Senior) Client/Borrower: FIPMC/PGP Carlsbad Seniors Year Built: 1989 Rm/Llfe: 40yrs #Bldg: 1 #Stories:3 Property Address: 2848 Jefferson Street BIdg Area -Net: 29,760 Gross: 31,806 City. State, Zip: Carlsbad, CA 92008 Number of units: 57 Avg.SF: 558 County: San Diego Quality: Good Condition: Good Project Name: Jefferson House 2 Parking Spaces: 29 % Res.: 65% Vac .0% to 4% Assessor's Parcel: 203-202-19 Zoning: V-R Rent Control: No Census Tract: 0179.00 Map Page: 1106-E5 Environmentai Issues: None Flood Zone: X SFHA: No Highest and Best Use: Present Use Appraisal nformation Transaction Type: Refinance Sale's Price: Date of Valuation: January 19. 2000 Date of Inspection: January 19, 2000 interest Appraised: Fee Simple Appraisal Type: Compiete Appraisal Prepared By: James J. Hardick Appraiser Cert. Number: AG002533 Value Indications Replacement Cost New: insurance Purposes $2,434,308 PGi at Market Rent $495,600 Vaiue by Cost Approach: N/A Value by Sales Approach: $3,900,000 Vaiue by Income Approach: $3,845,000 Vaiue Conclusion - Stabilized $3,850,000 Repairs Required: $ 0 Vaiue Conclusion - "As is" $3,850,000 Overaii Risk Score: 2.74 Income Analysis Forecasted Gross Rental income: 470,580 14.80 /SF Vaiue per Unit $67,544 Other income: 3,420 Vaiue per SF $ 121.05 Totai Gross Annual Income: 474,000 14.90/SF GIM 8.12 Vacancy: 4% actual 3% forecast 14,220 EGIM 8.37 Effective Gross income: 459,780 14.46 /SF OAR 7.74% Operating Expenses: Taxes: 41,290 Expenses/Unit $2,837.98 insurance: 5,100 Unit Breakdown (Gas: Master Elec: Sep. Meters) Utilities: 27,480 Unit Mix Rooms Bdrms Baths Maintenance: 30,210 50 3 1 1.00 Management 49,135 7 4 2 1.00 Reserves: 8,550 0 0 Total Expenses: 35.18% 161,765 5.09 /SF 0 0 NOi (Actual "As Reported' 265,447): 298,015 9.37 /SF 0 0 Indicators Property Amenities: Pool • D/W • Patios ^ Elev. 1 IntHall (gj Security • Roof: Comp Shingle CONDITIONS AND REQUiREMENTS OF APPRAISAL: No conditions or requirements are made ofthe appraisal report with the exception of the Limiting Conditions and Certification found on pages 1 and 2 of the report. Reviewer's Signature Did Did Not Inspect Properly Date PRAAptLF 6/1/98 Progressive Realty Advisors Loan Number: 4000443 SUMMARY OF SALIENT FACTS AND CONCLUSIONS (conf d) MARKET AREA COMMENTS Positive Risk Factors: The subject property is in a desirable beach oriented community with adequate shopping, services, and public transportation within a block of the property. The subject is on a residential street, 3 blocks north of the Senior Citizen Center. Some local services are within walking distance for area residents. There is adequate transportation routes throughout the area with local employment within 5 miles. Freeway on ramps are within a few blocks for good access throughout San Diego County. Negative Risk Factors: The subject property is located 2 blocks from the freeway and 3 blocks from an active railroad track. These have a minor impact to the subject property with minimal noise detriment noted and some industriai uses near the railroad. This is common in the area, affecting most property in the Viiiage area of Carlsbad. Apartment Market Rental rates are cunrently increasing. Vacancy rates are cunrently stable. Vaiue trends are currently increasing. The subject's estimated market rents are in the middle of the range of the area rents. The subject's current actual rents are within the range of the area market rents. SITE AND IMPROVEMENT COMMENTS Hazards and Nuisances: There were no hazards or nuiscances noted immediately surrounding the subject site. The site is close to office uses on Grand Avenue and backs a parking lot with commercial uses within a block which have minimal impact to the site. Easements and Encroachments: Based on review of the titie report prepared by Chicago Title Company, dated December 17,1999, there were no easements or encroachments recorded on the subject property. The prelim states that the property is within the redevelopment area of Carlsbad. There are is two agreements to pay fees for facilities and improvements recorded in 1986 and 1997. These are assumed to be included in the property's real estate taxes. Functional Utilitv of the Floor Plans: The floor plan appear to be adequate and functional for the area and the senior tenant mix. Each unit has adequate size, rooms, closet space and utility to be functional for most tenants. Defen-ed Maintenance: There were no defenred maintenance items noted during the property inspection. PRAAptLF 6/1/98 Loan Number: 4000443 Progressive Realty Advisors RISK ASSESSMENT MODEL - INCOME PROPERTIES SITE SCORE WEIGHTED SCALE Ingress and Egrees 3.00 Excellent 1 Prctdnvty to Envvonmerital Conoenis aoo Good 2 ProDdrnity to Hazaids and Nuisanoes 3.00 Average 3 Zoning and LegaUHegal Uses 3.00 Fair 4 OVERALL SITE RATING (10%) 3.00 1 030 1 Poor 5 MPROVEMEKTS Afcniectural Design/Appeal 3.00 Functional Cotnpatlbility 3.00 Room Size and Ccxxt 3.00 Quality of Constaictian 2.00 Condition of Eideriar 2.00 CondiiQn of Interior 2.00 Landscaping Condition^Con^iatibility 3.00 OvenyiLjwatJity to Market aoo ADiVDeo Trends 0\«ral CoriVBtibility to Maket aoo Increasing 1-2 CXeral Appeal to MjvtaBt aoo Stable 2-4 OVERAQ. IMPROVEMBfT RATING (4S%) 2.70 1 1.22 1 Decreasing 4-5 ECONCMC Oweral Rentatiity in Mivket Area 2.00 CXeial Occupancy Potential 2.00 Marketina Time CVeial Salabity/lnwestor Appeal aoo 0to2mo6 = 1 Supply/Demand Trends aoo 2to4mo6 = 2 ApprectatunASepreciation - Rents aoo 4to6mas = 3 Appreciation/Depreciation - Values aoo 6to9mo6 = 4 Marteting Tme aoo >9mo6 = 5 OVERALL ECONOMIC RATING (4S%) 271 1 122 1 ^ Low Risk 1.0-2.8 • Medium Risk 2.8-3.3 OVBUU. RISK SCORE OF SUBJECT 1 2.74 1 • High Risk >3.3 Connments: None PRAAptLF 6/1/98 Progressive Realty Advisors Loan Number: 4000443 STATEMENT OF UMITING CONDITIONS AND APPRAISER'S CERTIFICATION CONTINGENT AND LIMITING CONDiTIONS: The appraiser's certification that appears in this appraisal report is subject to the following conditions: 1. The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised orthe title to it. The appraiser assumes that the title is good and mart^etable and, therefore, will not render any opinions about the title. The property is appraised on the basis of it being under responsible ownership. 2. The appraiser has measured the sut)ject improvements, where possible, to determine the approximate dimensions of the buikJing(s) and/or unit types. The fiekl drawings and/or measurements are contained in the appraisal file for reference purposes. A formal sketch, if included in the appraisal report, is only to assist the reader ofthe report in visualizing the property and understanding the appraiser's detemiination of its size. 3. The appraiser has examined the available flood maps that are provkled by the Federal Emergency Management Agency (or other data sources) and has noted in the appraisal report whether the subject site is locateKl in an kientified Special Flood Hazard Area. Because the appraiser is not a surveyor, he or she makes no guarantees, expressed or implied, regarding this detenmination. 4. No soils report was provkled for review unless specifically stated in the appraisal report. It is assumed that the soils condition will penmit development ofthe property to the uses set forth, however, no representations are made as to these matters. 5. No responsibility is assumed forthe potential effect earthquakes may have on indivklual properties. Earthquakes are not uncommon throughout the area and the appraiser has no experience in this fiekl, therefore, no representations have been made regarding this matter. 6. The appraiser will not give testimony or appear in court because he or she made an appraisal of the property in question, unless spedfic anrangements to do so have been made beforehand. 7. The appraiser has noted in the appraisal report any adverse conditions (such as, needed repairs, depredation, the presence of hazardous wastes, toxic substances, etc.) observed during the inspection ofthe suk)ject property or that he or she became aware of during the normal research involved in performing the appraisal. Unless otherwise stated in the appraisal report, the appraiser has no knowiedge of any hidden or unapparent conditions of the property or adverse environmental conditions (induding the presence of hazardous wastes, toxic substances, etc.) that woukl make the property more or iess valuable, and has assumed that there are no such conditions and makes no guarantees or wanranties, expressed or implied, regarding the condition ofthe property. The appraiser will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards, the appraisal report must not be considered as an environmental assessment ofthe property. 8. The appraiser obtained infonmation, estimates, and opinions that were expressed in the appraisal report from sources that he or she consklers to be reliable and believes them to be tme and coned. The appraiser does not assume responsibility for the accuracy of such items that were fumished by other parties. 9. The appraiser will not disdose the contents of the appraisal report except as provkled for in the Unifonm Standards of Professional Appraisal Pradice. 10. The appraiser has based his appraisal report and valuation condusion for an appraisal that is subjed to satisfadory compietion, repairs, or alterations on the assumption that compietion of the improvements will be perfonmed in a woriunanlike manner. 11. The appraiser must provkle his or her prior written consent before the lender/dient spedfied in the appraisal report can distrifcHjte the appraisal report (induding condusions atx)ut the property value, the appraiser's klentity and professional designations, and references to any professional appraisal organizations or the firm with which the appraiser is assodated) to anyone otherthan the borrower; the mortgagee or its successors and assigns; the mortgage insurer consultants; professional appraisal organizations; any state or federally approved finandal institution; or any department, agency, or instrumentality of the United States or any state or the Distrid of Colomt)ia; except that the lender/dient may distribute the property description sedion of the report only to data colledion or reporting service(s) without having to obtain the appraiser's prior written consent. The appraiser's written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the pubiic through advertising, public relations, news, sales, or other media. 12. The Americans with Disabilities Ad (referred to hereafter as "ADA") became effedive on January 26,1992. The appraiser has not made a spedfic compliance survey and analysis ofthe building and/or other improvements ereded on the subjed property to detenmine whether or not the appraised property is in conformity with the various detailed requirements ofthe ADA, or with requirements imposed by state law and local buikling codes and regulations. It is possible that a compliance survey of the property, together v^h a detailed analysis of the requirements of the ADA and state and local regulations, coukl reveal that the subjed property is not in compliance with one or more requirements of the ADA and/or state and local regulations. Since the appraiser has no dired evidence relating to this issue, possible non-compliance with the requirements of the ADA or state and local regulations has not been consklered in estimating the value ofthe property. No responsibility is assumed for any possible non-compliance with the requirements ofthe ADA or with state and local regulations, nor for any expertise or engineering knowledge required to discover such non- compliance. The appraiser reserves the right to amend the value condusions based upon costs to bring the property into compliance. PRAAptLF 6/1/98 Page 1 Progressive Realty Advisors Loan Number: 4000443 APPRAISER CERTIFICATION: The Appraiser certifies and agrees that: 1. i have taken into conskleration the fadors that have impad on value in my deveiopment of the estimate of maricet value in the appraisal report. I have not knowingly withhekl any significant infonmation from the appraisal report and I believe, to the best of my knowledge, that all statements and information in the appraisal report are tme and corred. 2. I stated in this appraisal report only my own personal, unbiased, and professionai analyses, opinions, and condusions, which are subjed only to the contingent and limiting conditions spedfied in this report. 3. I have no present or prospective interest in the property that is the subjed of this report, and I have no present or prospedive personal interest or bias with resped to the partidpants in the transaction. I dkl not base, either partially or completely, my analysis and/or the estimate of maricet value in the appraisal report on the race, color, religion, sex, handicap, familial status, or national origin of either the prospedive owners or occupants of the subjed property or of the present owners or occupants of the properties in the vidnity of the subjed property. 4. My compensation and/or employment is not contingent upon the reporting of a predetenmined vaiue or diredion in value that favors the cause of the dient or any related party, the amount of the value estimate, the attainment of a stipulated result, orthe occunence ofthe sutisequent event. I dkl not t>ase the appraisal report on a requested minimum valuation, a spedfic valuation, orthe need to approve a spedfic mortgage loan. 5. My analyses, opinions, and condusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Pradice that were adopted and promulgated by the Appraisal Standards Board ofthe Appraisal Foundation and that were in place as ofthe effedive date ofthis appraisal, with the exception of the departure provision of those Standards, which does not apply. 6. I have personally inspeded the interior and exterior areas of the subjed property and the exterior of all properties listed as comparable in the appraisal report, i further certify that I have noted any apparent or known adverse conditions in the subjed improvements, on the subjed site, or on any site within the immediate vidnity ofthe subjed property of which I am aware and have made adjustments forthese adverse conditions in my analysis ofthe property value to the extent that I had maricet evkience to support them. I have also commented about the effed of the adverse conditions on the maricetability ofthe subjed property. 7. I personally prepared all condusions and opinions about the real estate that were set forth in the appraisal report. If I relied on significant professional assistance from any indivkluals in the perfomiance ofthe appraisal orthe preparation of the appraisal report, I have named such indivklual(s) and disdosed the spedfic tasks performed by them in the recondliation sedion of this appraisal report. I certify that any indivklual so named is qualified to perfonm the tasks, i have not authorized anyone to make a change to any item in the report; therefore, if an unauthorized change is made to the appraisal report. I will take no responsibility for it. REVIEWER/SUPERVISORY APPRAISER'S CERTIFICATION: If a reviewer/ supervisory appraiser signed the appraisal report, he or she certifies and agrees that: • I did • did not diredly supervise the appraiser who prepared the appraisal report; I have reviewed the appraisal report, agree with the statements and condusions ofthe appraiser, agree to be bound by the appraiser's certifications numbered 3 through 5 above, and am taking full responsibility forthe appraisal and the appraisal report. APPRAISER: , REVIEWER/SUPERVISORY APPRAISER: Signature: ^.^"JZ^n^-t^ x )/~--7g^^"gg^<-<^-^ Signature: Name: / J^mes J. HsjsjiPk^' Name: Date Signed: Januaty 24,2000 Date Signed: Certification #: AG002533 Certification #: State: Califomia State: Exp. date of cert.: 9/00 Exp. date of cert. Dkl Dkl Not Insped Property PRAAptLF 6/1/98 Page Progressive Realty Advisors Loan Number: 4000443 PURPOSE, SCOPE AND FUNCTION OF APPRAISAL Purpose of the Appraisal - The purpose of the assignment is to prepare a Complete Appraisal in a summary appraisal report to estimate the "as is" market value of the Fee Simple estate of the subject property, pursuant to the guidelines of the Uniform Standards of Professional Appraisal Practice (USPAP), and the appraisal requirements ofthe client, as ofthe effective date ofthe appraisal. Scope of the Assignment - The scope of this appraisal assignment involved a visual inspection of the interior and exterior of the subject property, measurement of the improvements, a review of the property's operating history, if available, analysis of the subject's immediate and general surroundings, the collection, verification, inspection and analysis of all primary and secondary comparable market data, so as to develop a conclusion as to the property's value utilizing all applicable approaches to value. The final step is to prepare a Summary Appraisal Report, based on standard 2 of USPAP, providing a recapitulation of the appraiser's data, analyses, and conclusions. Supporting documentation is retained in the appraiser's file. Function of the Appraisal - This summary appraisal report is prepared for decision making purposes in this Refinance transaction for the exclusive use by the ciient. This appraisal is not to be utilized for litigation, tax assessment, or any other purpose. DEFINmONS MARKET VALUE - The most probable price which a property should bring in a competitive and open market under ail conditions requisite to a fair sale, the buyer and seller, each acting prudently, 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 titie 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 he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in tenms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by speciai or creative financing or sales concessions granted by anyone associated with the sale. Ifthe value opinion to be developed is market value, the appraiser must ascertain whether the value is to be the most probable price: (1) in terms of cash; or (2) in terms of financial arrangements equivalent to cash; or (3) in other precisely defined terms; and (4) if the opinion of value is to be based on submarket financing or financing with unusual conditions or incentives, the terms of such financing must be clearly identified and the appraiser's opinion of their contributions to or negative influence on value must be developed by analysis of relevant market data. The most probable price as used in this appraisal report in terms of cash or in terms of financial arrangements equivalent to cash. The source of the definition of market value is USPAP 1999 Edition, page 139. FEE SIMPLE ESTATE may be defined as absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the government powers of taxation, eminent domain, police power, and escheat. APPRAISER COMPETENCY - The undersigned appraiser hereby acknowledge that he is fully qualified and competent by his training, knowiedge and experience to pertorm this appraisal. If after acceptance of the appraisal assignment and during the course of conducting the appraisal, the appraiser discovers that he is not fully competent to perform the appraisal, the appraiser must compiy with the Competency Provision of USPAP. PERSONAL PROPERTY - No personal property, (commonly referred to as chattels), is included in the appraiser's indicated market value estimate. Additional personal property noted, if any, is discussed in the generai text ofthe appraisal report. PRAAptLF6/1/98 Page 3 Progressive Realty Advisors Loan Number: 4000443 GENERAL DATA Complete Street Address 2848 Jefferson Street, Cartsbad, CA 92008 Legal Description: The full legal description for the subject property is listed in the preliminary titie report located in the addendum to this appraisal report. The subject property is referred to as lots 14,15,16,17 to 18, of the Schell and Sites Addition to Cartsbad, in the city of Carisbad, County of San Diego. The subject is also commonly described as assessor's parcel number 203-202-19. Owner of Record: PGP Carisbad Seniors, LTD II, a Califronia Limited Partnership Three Year Ownership and Sales Historv: The current owners of the property acquired title in 1991 at the reported purchase price of $3,283,000. There have been no reported transfers of the property in the past three years. One Year Marketing Historv: The subject property was previously listed for sale in March, 1999 year at $4,300,000. The property was on the martlet for several months prior to this listing as the data reviewed shows a price reduction from prior listings. The property was taken off the market due to limited interest at the asking price. The property is not reportedly on the market at this time. No current listings were found and the owner stated it is not cunrently on the mari<et. MARKET AREA ANALYSIS The subject property is located in the northwestem section of San Diego County, in the incorporated coastal dty known as Carlsbad. This is one of the larger coastal cities in the northem end of San Diego, spanning both sides of the 5 freeway. Carisbad borders the city of Oceanside to the north, Vista and San Marcos to the east, Leucadia to the south and the Pacific Ocean is the westem boundary. Carisbad is the most well known city in the area, having popular hotels and miles of beaches, as well as the home to the new Legoland Pari< and a variety of developing manufacturing and R&D sites. Accessibility to the area is good with the 5 freeway providing a link to the city of San Diego, 35 miles south, as well as Orange and Los Angeies counties 40 and 90 miles, respectively, to the north. The 78 freeway borders the north end of the city providing good accessibility to the eastem sections of the county. Carisbad's west side ofthe freeway consists ofthe older residential and commercial sections ofthe city. The most deveiopment is located in the northwest section of the city which is commonly known as the "Village" area. This area is geared toward tourism, beach activities, specialty stores and restaurants, and smail storefront retaii shops aiong Carisbad Viiiage Drive and Carisbad Boulevard. The residentiai housing consists of older single family homes, small apartment buildings and a few larger apartment complexes. Beach access is within a few blocks with Carisbad State Beach on the south side of the downtown area. The southem end of the beach area is less populated due to terrain and State Beach with limited concentration of residential housing. There is an active railroad that bisects the area with regular Amtrak commuter service and occasional freight lines. Carisbad's west side is considered to be the most desirable due to the proximity to the beach and the quaint shops and restaurants. The subject property is located on the eastem end ofthe Viiiage area, close to retail uses, schools, various houses of wirship, and a large senior citizen center. The senior citizen center offers a variety of activities and services to the areas senior population with the subject property being the closest age restricted apartment complex. The largest section of Carlsbad lies east of the freeway. This is the area of most recent development with many new single family housing tracts and a signficant amount of smaii manufacturing, R&D and office developments. The majority of the industrial deveiopment is located near the McClellan Palomar Airport, in the eastem section of the city. The airport is anticipated to expand due to the increased growth of business. It is currently the busiest single runway airport in the country and is a good altemative for commuters and corporate airaaft. There is a significant amont of undeveloped land in the area which is being developed at a rapid pace in the past few years. The cities population has increased 4% to 5% per year due to the increased construction activity. The southeast section of Carisbad is home to the La Costa Country Club and housing development, known for its worid dass spa and PGA golf toumaments. The new Legoland Theme PRAAptLF6/1/98 Page 4 Loan Number: 4000443 Progressive Realty Advisors MARKET AREA MAP ©1996 Thomas Bros. Maps PRAAptLF 6/1/98 Progressive Realty Advisors Loan Number: 4000443 Park is located in this area providing a major attradion for tourist. There is still plenty of land available for future growth in the city of Carisbad. There are several major industriai and residentiai developments in various stages of development providing continued growth over the next decade. Type: • Urban EJ Suburisan • Rural Market Area Good Aver. Fair Poor Population M increasing 4.00% per year Employment Stability • • • • Stable • Decreasing per year Convenience to Employment ISI • • • Rent Control No Next Incr Protedion from Detrimental Cond. isl • • • Market Area Boundaries Adequacy of Shopping Facilities IE! • • • • North: Buena Vista Lagoon & Oceanside Adequacy of Public Transportation IS! • • • • South: Agua Hedionda Lagoon Adequacy of Utilities 1^ • • • • East: Interstate 5 Freeway Police and Fire Protedion • • • • West: Cartsbad Boulevard Recreational Fadlities • • • Present Land Use: Built-up 100% Property Compatibility • • • Single Family 20% Condo's 10% Generai Appearance of Properties • • • Apt's 35% Comm. 30% Industrial 5% Appeal to Market • • • Vacant Land 0% Other Proximity to Grammar Schools • • • Change in Present Land Use: Not Likely Freeway Acxiess • • • From: To: Overall Market Area • • • Employment: Job growth in San Diego County was over 40,000 new jobs over the past year. This is an increase of 3.8% for the period. The majority of new jobs were created in the service and technology industries. The majority of major employment centers are located east of the 5 freeway in Carlsbad with a variety of office, retail and auto dealerships located off the freeway. Located father inland is a variety of industriai uses with Carisbad being home to the largest concentration of golf manufacturers in the world. One of the newest employment opportunities in Carisbad is Legoland Park, a large amusement park located in the southeast section of the city. Local employment for Carisbad residents is good at the school district, city offices, and the many smail retaii and office uses along Carisbad Village Drive. There are also employment opportunities at the Plaza Camino Real Mali. Carlsbad is also accessible to the freeway for commuting to employment centers in many San Diego County cities. San Diego County has an unemployment rate of 3.3% which is one of the lowest rates in the state. The area unemployment rate is currentiy stable with continued employment growth projected throughout the area. Immediate Surroundings: The subjed is situated in the "Viiiage" area of Carisbad, west of the freeway and north of Carisbad Village Drive. The surrounding area consists of a mixture of older single family homes and 2 to 3 story apartment buiidings with commercial deveiopment along Carisbad Viiiage Drive, the main east/west traffic street for the area. There is a variety of retail, office and service businesses located on this main traffic street with specialty stores and hotels located aiong Carisbad Boulevard, the main north/south traffic street. The subjed is close to the office uses at the comer of Grand Avenue and Jefferson Street. Retail shopping is located a few blocks west on Carisbad Boulevard. The Senior Citizen Center is located at the comer of Jefferson and Pine Streets, 3 blocks south ofthe property. Ail necessary services are within the area and public transportation is available to provide access to other surrounding stores and businesses. Positive Risk Factors: The subjed property is in a desirable beach oriented community with adequate shopping, services, and public transportation within a block of the property. The subject is on a residential street, 3 blocks north of the Senior Citizen Center. Some local services are within walking distance for area residents. There is adequate transportation routes throughout the area with local employment within 5 miles. Freeway on ramps are within a few blocks for good access throughout San Diego County. Negative Risk Fadors: The subject property is located 2 blocks from the freeway and 3 blocks from an active railroad track. These have a minor impact to the subject property with minimal noise detriment noted and some industrial uses near the railroad. This is common in the area, affecting most property in the Village area of Carisbad. PRAAptLF 6/1/98 Page Progressive Realty Advisors Loan Number: 4000443 MARKET TRENDS ANALYSIS Apartment Rental Rates: Apartment rental rates are currently increasing. Ranges: to 1 bedroom $600 to $750 2 bedroom $800 to $1.100 to Comment on any shortage or oversuppiy of units in the area: The rental market in this beach oriented community is strong with limited availability at competing apartment complexes. The non-restricted apartment complexes with average unit sizes and adequate parking dominate the market with a shortage of available units. Rents have shown moderate increases in the past year due to the strong economy and the demand for this area. Market rents for these complexes have been at the upper end of the ranges above. There were oniy four senior apartment complexes noted in the subject's market area for analysis. These projects did not have any vacant units and rental rates are increasing with each new tenant. These projects have mostly small one bedroom units with iimited parking and no amenities. The rents are very consistent amoung these age restricted complexes, with the exception of the one low income projed owned by the city. The rental trend for apartment units in the Village area of Carisbad is considered to remain strong with moderate increases anticipated in the future.. Apartment Vacancy Rates 0% to 4% Ave. 2% Vacancy rates are currently stable. Comments: There are few vacancies in this beach community. Most projects have units rented prior to the tenants vacating with the only down time lost to cleaning, painting and renovating the units. The managers surveyed stated that long term tenancy is common and rent concessions have not been necessary. Vacancy trends for the subject should remain very stable based on the location of the property. Market Indicators GIM 7.50 to 9.00 OAR 6.50% to 8.00% $/Unit $60.000 to $100.000 Vaiue trends are currently increasing. Comments on above ranges and indicators: The wide range of area market indicators refled the location, quaiity and unit mix of property within the city. The low end reflects the projeds with small unit sizes (typically senior projects), or projects close to the freeway or railroad tracks. The upper end of the per unit range reflects property with larger unit sizes, or those closer to the beach. Values increase with the closer proximity to the beach. The trend in per unit value appears to be increasing with the increases in rent potential and the renovation of several older properties in the area. Rental rates have been increasing and investor interest has improved generating a high demand for beach oriented rental units. The GRM's and OAR's reflect the positive investment potential for the Carisbad area with high multipliers and low end overaii rate risk anticipated by investors. There are few senior developments in the city and the demand for this project type is good for tenants and investors. Investment criteria, in terms of overall rate risk, is fairiy similar for this project type with iimited difference noted between non- restricted and age-restricted projects. The major factor impacting per unit values and muitipiers is the location and quality of the projed. The subject's location in the beach oriented community of Carisbad, near the senior citizen center with dose proximity to shopping and publilc transportation has a positive impact to the per unit values and investment risk of the investment. The subject is anticipated to be in the middle of the range of the GRM and OAR range and at the lower end of the per unit ranges. PRAAptLF6/1/98 Page 6 Progressive Realty Advisors Loan Number: 4000443 MARKETING TIME/EXPOSURE TIME The exposure and mariceting time is considered to be similar in this marketplace, estimated at 3 to 6 months. The comparable properties uncovered in this maricetplace reported mart<eting times up to 6 months with the majority of the sales refleding exposure time of 2 to 3 months. There was an increase in market adivity and property avaiiabie for saie was met with high demand and multiple offers. Several of the properties surveyed in this maricet reported limited marketing efforts due to the existing demand at local brokerage offices. The subjed property would refled an average mariceting/exposure time based on the cunrent status of this market and the vaiue condusion in this analysis. SITE ANALYSIS The subjed site consists of 5 contiguous residential lots, each with 60' of frontage and a depth of 140'. These residential lots are typical for the area with most properties in the area consisting of two or more lots for their current use. The subject's combined site area reflects a large buiiding site for the area. The site has main frontage on Jefferson Street and aiso has frontage along Home Avenue with additional access from this residentiai street. Site Dimensions: Rectangular 300.00 X 140.00 = 42,000 Sq.Ft. Topography and Drainage: Level at street grade. Drainage appears to be adequate toward the street. Ingress and Egress: Adequate from curt) cut entries on Jefferson Street and Home Avenue Flood Zone: X Map: 06073C Panel: 0761F Dated: 6/29/97 SFHA: No Easements and Encroachments: Based on review of the title report prepared by Chicago Title Company, dated December 17,1999, there were no easements or encroachments recorded on the subjed property. The prelim states that the property is within the redevelopment area of Carisbad. There are is two agreements to pay fees for fadlities and improvements recorded in 1986 and 1997. These are assumed to be induded in the property's real estate taxes. Zoning: V-R ViHage Redevelopment. The subjed has been approved as a 57 unit seniors complex under a conditionai use penmit. The projed received a bonus density allowance for seniors at the time of constmdion and has an enforcement lien from the City of Carisbad to ensure senior status. Present Improvements do conform to zoning regulations. The property complies a higher density than the current zoning allows and the paridng for the subjed is less than required. The sufcijed property can be rebuilt if destroyed, per SB2112. . Tax Rate Area: 09-098 Tax Rate: 1.0496 Spedal Assessments: Approximately $450 based on the current base tax rate, assessments and property taxes. APN Land Improvements Personal Prop. Total Taxes 203-202-19 $1.405.000 $1.160.000 $2.565.000 $27.373 $ 0 $ 0 Hazards or Nuisances: There were no hazards or nuiscances noted immediately surrounding the subjed site. The site is dose to office uses on Grand Avenue and backs a paridng lot with commerdal uses within a block which have minimal impad to the site. Buikling Restridions: None Site Improvements: S Public Water • Private Well El Public Sewer • Septic Tank ^ Eledricity ^ Gas • Underground Utilities Kl Stonn Sewer ^Curt>s ^ Gutters 1^ Sklewalk •Alley Accessed By: ^ Public Street • Private Road Surtace: Asphalt Maintained By: ^ Munidpality • Private Assodation Adiacent Land Uses: The subjed property sides and fronts to older single family homes which have been converted to office uses for small local businesses. The property backs to the parkikng lot of an office building which fronts to Grand Avenue. There are apartment and condominium uses to the north and east of the site along Home Avenue. Property top the north along Jefferson Street are residential uses with apartment uses aloong this street. Jefferson Street, south of Grand Avenue, is commerciai and retaii uses with Carisbad Village Drive having a variety of commercial uses. Comments: The subjed is a large, ievei, corner site at street grade with adequate width and deplh to many of the surrounding properties. The parcel consists of 5 typical residential lots for the area with the current use combining these lots for multi-family development. The site has good egress PRAAptLF 6/1/98 Page Loan Number: 4000443 Progressive Realty Advisors ASSESSOR'S PARCEL MAP 203-20 SHIIOFZ i't 100' n DAVIS AVE." i LACONA iOATTEftGON A\/t: • . .1.. PRAAptLF 6/1/98 Progressive Realty Advisors Loan Number: 4000443 from the street. All necessary utilities and services are available to the site. The size, shape, zoning and location of the site is considered fundional for most residential uses. IMPROVEMENT ANALYSIS The property was built as a senior's apartment building with smaller unit sizes, higher projed density and lower parking requirements than the traditional apartment complex in the area. The projed was partially funded by the city of Carisbad with an enforcement lien and conditional use penmit for the development of the projed for the specific purpose as a 57 unit apartment complex with senior designation. The subjed property consists of a three story elevator building constnjded in a redangular shape around a central courtyard area. The first levei of the buiiding houses 11 apartment units, a reaeation room, laundry room and office. There are tuck under carport parking spaces aiong the south and east sides of the property with driveway access from Home Avenue. The second and third levels are identical having 23 apartment units each. The elevator is located in the middle of the building providing access to all three levels of the building. There is also stairwells at the northeast and southwest comers of the building for secondary access to the upper levels. The units are accessed via walkways and interior hallways. The majority of the one bedroom units are identical in size and confirguration having a small kitchen, average size living room and bedroom and a small bathroom. The only excpetion are two one bedroom units located on the third floor of the buiiding in the comers of the buiiding. The two bedroom units are aii identical, located in the comers of the building and having similar size and fioor plan with similar kitchen and bathroom facilities as the one bedroom units. The pertinent detaiis of the property are found in the foiiowing table. Item Description Approx. Year Built 1989 Foundation Concrete Projed Type 3-story elevator (Senior) Basic Stmdure Wood Frame No. of Buildings 1 Exterior Walls Stucco No. of stories 3 Roof Covering Comp Shingle No. of Units 57 Interior Walls Painted drywall Net BIdg. Area 29,760 Sq. Ft. Floor Covering Carpet/Vinyl Gross BIdg. Area 31,806 Sq.FL Ceiling Height Finished Floor to Finished Ceiling is 8 Ft Paricing Spaces 29 Bath Floor/Walls Vinyl/Painted drywall Type Carports Insulation Unknown - appears adequate Sound Proofing Unknown - appears adequate Eff. Age/Remain Life 10 Yrs / 40 Yrs Heatina Svstem Samll wall units (elec) in bdrm & LR PRpVEMEN T RATING Cooling System None MM 1 G I A 1 F P Hot Water Heater Raypack Boiler and holding tank Architedural Attradiveness IS! • • • Built-in Kitchen Samll Range/oven (elec), fan hood. Quality of Constmdion IEI • • • Appliances disposal Condition of Exterior • • • Elevator (no. 1) Hydroeledric - 3 stops Condition of Interior • • • Plumbing Fixtures Standard Room Size and Unit Layout • • • Eledrical Service Sep. Meters Kitchen Fadlities • • • Gas Service Master Closets and Storage • • • Laundry Fadlities Owned #Washers 4 #Dryers 4 Soundproofing Adequacy IE! • • • Security Features Fire Alarm system & fully sprinklered Insulation Adequacy IE! • • • Units Inspeded See Below Eledrical Service Adequacy IS! • • Fundional Utility of the Fioor Plans: The floor pian appear to be adequate and fundional for the area and the senior tenant mix. Each unit has adequate size, rooms, closet space and utility to be fundional for most tenants. Unit Breakdown Unit Mix Room Count Square Footage Unit Mix Total Bdnm Bath Square Footage 50 3 1 1.00 500 7 4 2 1.00 680 0 0 0 0 0 0 Other Improvements: The complex has three levels of dwelling units with a recreation room and laundry room on the ground floor. The recreation room has a large sitting area with couches and tabies for gatherings. There is a full kitchen and 1/2 bathroom for use by tenants. The laundry room is next door to the office and houses four washers and dryers with a separate counter area. There is a smaii office next to the laundry room which is used by the on-site manager. The property has a boiler room with a new Raypack heating unit with a holding tank on the ground floor next to the carport parking spaces. The buiidings are built around a central courtyard. The courtyard has conaete decks and planters with the interior units having the PRAAptLF 6/1/98 Page 8 Progressive Realty Advisors Loan Number: 4000443 balcony facing this area. The outside facing units have smail patios or balconies with average area views. There are a few units facing Jefferson Street that have good sunset views from the 2nd and 3rd fioors. Parking for the subjed is aiong the east and south sides of the buiiding with a tuck under carport spaces avaiiabie for the tenants on a first come basis. There is a limited number of paridng spaces due to the senior housing requirements. The majority of the tenants do not have cars and utilize public transportation located on the street in front of the buiiding. Deferred Maintenance: There were no deferred maintenance items noted during the property inspedion. Dollar amount of repairs required: $ 0 Additional Comments: Units inspeded: 104.107,108,110,111,206,211,216,221.222,304, 308, 311, 312, 314, 320, 321, Recreation room and office The appraiser's measurements of the buiidings and units are approximate based on the partiai inspedion, accessibility of the property and units. The unit sketches are provided for visual reference only taken from physical measurements. The gross square footage of the buildings was measured at 31,806 which is 8% larger than the the gross square footage of 29,210 taken from pubiic records. The net rentable area is approximate based on the appraiser's measurements of the units. The unit square footage's and buiiding measurements are provided for reference only and the indicators of rent and vaiue per square foot have been given iimited emphasis in the analyses. The subjed building has a complete fire alarm syatem and the units are fuiiy sprinklered. Fire extinguishers are located throughout the projed with waii mounted units. Each unit inspeded had at ieast one smoke detedor located in the unit. The verticai and horizontal plumbing in the building was not inspeded and it is assumed that it is original and in average condition for the age ofthe projed. Highest and Best Use: ^ Present Use • Other - Comments - Highest and Best Use may be defined as the reasonable probable and legal use of a property, that is physically possible, appropriately supported, financially feasible, and results in the highest value. A Cost Approach was judged to be not applicable in this appraisal assignment, therefore, only the Highest and Best Use of the property as improved is analyzed to: (1) identify the property use that can be expeded to produce the highest overaii retum for each dollar of capital invested; and (2) to help identify comparable properties. The subjed site is currentiy improved with a multi-family projed consisting of a 57 unit senior's apartment buiiding . The property is in overall good condition, is typical for the newer apartment buildings in the area, and generates sufficient income to continue use as apartments. The improvements comply with density and paricing requirements of the current zoning and use based on the conditional use permit for the subjed's higher density senior housing projed. The property "as improved" contributes vaiue above the potential vaiue of the site as vacant and avaiiabie for use as a multi-family development. There are no required rehab or capital improvements warranted to improve the use of the property. The property has been maintained and updated upon tumovers to maintain market appeal and rents. The subjed improvements are considered to refled the highest and best use. The highest and best use of the subjed property is considered to be the present use as a 57 unit senior apartment projed. PRAAptLF 6/1/98 Page SKETCH ADDENDUM File No. 4000443 Borrower PGP CarlstMd Seniors Property Addrsss 2848 Jefferson Street City Carlsbad County SanDiego State CA ZipCode Lender/Client Finaitcial institutional Partners Address Driveway 101.0' 76.0 Driveway 8 Carport Spaces 6.( 50.0 6.( 76.0 9 Carport Spaces ai .U' 20.0' 16.0' 34.0' 8-) • Stairs •0' 1 + 1 28.0 1 + 1 50.0' 5.0' Carport Spaces 5.0' Carport Spaces 28.0' 50.0' 31 .d Rec Room 7, ly .U' elev 1 + 1 1 + 1 Laundry Office 72.0' 20.0' 20.0' Jefferson Street 50.0' 1 + 1 128.0' Stairs 1 + 1 2 D.O 8.0' 34.0' 16.0' 1 + 1 1 + 1 1 + 1 1 f 1 2 + 1 77 .0' 20.0' 77.0' Home Avenue FIRST LEVEL VMnSkatdi by Jamnwi Sotwar* SKETCH ADDENDUM File No. 4000443 Borrower PGP CarlslMd Seniors Property Addrsss 2848 Jefferson Street City CarlslMd County San Diego State CA Zip Cotie Lender/Client Financial Institutional Partners Address 103.0' 98.0' 76.C • 77 .0' 103.0' SECOND LEVEL Two Bedroom • One Bath o ^ So CO (0 0. CD Living Room EL I I 1 I I-J-Jl Kitchen OlO FTl- Waik-ln Closet 0 CZJ Bedroom Patio or Balcony WInSkalch by Janmin SoAwar* SKETCH ADDENDUM File No. 4000443 BoiTowsr PGP Carlsbad Seniors Property Address 2848 Jefferson Street City Carisbad County SanDiego State CA ZipCode Lender/Client Financial Institutional Partners Address 103.0' 76.( 2 + 1 1 + 1 1 + 1 5.0' 5.0' 76.C 1 + 1 1 + 1 T7 1 + 1 16.0' .0' ^' )' ).0'1 + 1 1 + 1 50.0' 78. 6,( 1 + 1 1 + 1 6.(1 1 + 1 1 + 1 1 + 1 •1 + 1 1 + 1 50.0' 10.0' 20.0' 98.0' 12.0 Elev 12.0' 10.0' 20.0' 50.0' 56 0' 1 + 1 Stairs 1.0 1 + 1 20 ,, 34.0' 5"^- 16.0' 63.0' 2 + 1 1 + 1 1 + 1 1 + 1 1 + 1 1 + 1 77.0' 103.0' THIRD LEVEL One*Bedrooiii • One Bath Uving Room Patio or Balcony Bedroom VMoSMch by Jamnin Sotwar* SKETCH ADDENDUM File NO. 4000443 BorroMW PGP Carlsbad Seniors Property Address 2848 Jefferson Street City Carlsbad County San Diego State CA ZipCode Lender/Client Financial Institutional Partners Mdress Typical One Bedroom Unit 20' x 25' = 500 SF Typical Two Bedroom Unit 20' x 27' = 540 7' X 20' - 140 Total - 680 SF SKSTCM CALCtJIAIIOllS Living Ares rixst rioor - B Al : 16.0 X 8,0 -128.0 A2 : 50.0 X 20,0 -1000.0 1128.0 rixst rieox - C A3 : 50.0 X 20.0 -1000.0 A4 : 16.0 X 8.0 -128.0 1128.0 rixst rioox - D A5 : 20.0 X 57.0 =• 1140.0 A6 : 77.0 X 20,0 » 1540.0 2680.0 rixst rioox - B A7 : 20.0 X 72.0 = 1440.0 1440.0 rixst rioox - Rso xo<» AS : 28.0 X 24.0 -672.0 A9 : 18,0 X 7,0 -126.0 798.0 Saoond rioox - B AIO : 16.0 X 8.0 -128.0 All : 50.0 X 20.0 -1000.0 1128.0 Saoood rioox - C A12 : 50.0 X 20.0 -1000.0 A13 : 16.0 X 8,0 = 128.0 1128.0 Saoond rioox - A A14 : 20,0 X 56.0 -1120.0 A15 : 20.0 X 50.0 -1000.0 A16 : 20.0 X 57,0 -1140.0 A17 : 20,0 X 56,0 -1120.0 A18 : 103,0 X 20.0 = 2060.0 A19 : 103.0 X 20.0 = 2060.0 A20 : 20.0 X 78,0 -1560.0 10060.0 Klevatox - 2 A21 : 10.0 X 12.0 = 120.0 120.0 Xhixd rioox - A A22 : 20.0 X 56,0 =• 1120.0 A23 : 20,0 X 50,0 -1000.0 A24 : 20,0 X 57,0 • 1140.0 A25 : 20.0 X 56.0 -1120.0 A26 : 103.0 X 20.0 -2060.0 A27 : 103.0 X 20.0 » 2060.0 A28 : 20,0 X 78,0 -1560,0 10060,0 Thixd rioox - B A29 : 16.0 X 8.0 = 128.0 A30 : 50,0 X 20.0 -1000.0 1128.0 Xhixd rioox - C A31 : 50,0 X 20,0 = 1000.0 A32 : 16.0 X 8,0 = 128.0 1128.0 Klevatox - 3 A33 : 10,0 X 12.0 -120.0 120.0 Totsl Living AXM 31806.0 flsxege AXM AttaolMd Caxpoxt A34 : 101,0 X 20,0 -2020.0 A35 : 20.0 X 56.0 = 1120.0 A36 : 20.0 X 50.0 -1000.0 A37 : 20.0 X 76.0 = 1520.0 S6C0.0 Tot«l Osxago AXM 5660.0 WInSkalch by Jammin Softwara lan Number: 4000443 Progressive Realty Advisors COST APPROACH ANALYSIS standards Rule 2-2(b)(x) of the USPAP allows for the exclusion of any of the usual valuation approaches, if explained and supported. The cost approach relies on the colledion of land sales that provide a key component for this approach to value. There has been limited land acquisition adivity, for the purposes of new construdion, from which to provide adequate support to a credible land vaiue estimate. In addition to the land value estimate, accrued depreciation is also difficult to accurately estimate. These fadors considerably limit the credibility of the value in use conclusion derived by the Cost Approach, therefore, this approach has been omitted from the analysis ofthe subjed property. The replacement cost data is obtained from the Marshall Valuation Service with the cost estimates adjusted by regional and local area multipliers. This information is used to provide an estimate of the replacement cost new of the subjed's improvements to be used for insurance purposes and not to provide an indication of the subjed's value estimate via the Cost Approach. Estimated Replacement Cost New Units 31,806 Sq.Ft. @ $ 68.00 $2,162,808 Sq.Ft. @ $ Caipofts 5.660 Sq.Ft. @ $ 25.00 141,500 Garage Sq.Ft. @ $ Porches, patios, balconies, etc. 60,000 Fences, walls 5.000 Paving, walks and lighting 50.000 Landscaping 15.000 Recreational facilities Total Estimated Replacement Cost New of Improvements $2,434,308 INCOME APPROACH The Income Approach is a procedure that translates an income projedion into an indication of value. This approach is widely used in the appraisal of income producing properties like the subjed property. A basic principle of real estate is that of anticipation, which affirms that vaiue is created by the expedation of future benefits to be derived from ownership. Real Estate value is defined as the present worth of the rights of ownership as anticipated by typical prospedive purchasers who constitute the martlet. Capitalization is the procedure of expressing such anticipated benefits of ownership in doiiars and processing them to their present worth at a rate that is attrading purchase capital to similar investments. In applying the Income Approach, the appraiser is concemed with the present worth of the future potential benefits of the property. These benefits are generally measured by the net income that a well informed person is warranted in assuming the property will produce during its remaining useful life. After comparison with investments of similar type and ciass, this net income is capitalized into a value estimate, I have estimated the market rent and the potential gross annual income the subjed can produce under the competitive conditions that exist, assuming competent management. An allowance for vacancy and colledion ioss and expenses typical for the subjed's property type was stabilized and deduded. The resulting net income was then converted into an estimate of value by the dired capitalization process. A summary of the data colleded and analysis is as foiiows: Discussion of Rental Data The subjed market area was surveyed for market levei rental data from projeds deemed similar to the subjed property. I surveyed a total of ten complexes and reviewed rental data from previous surveys, utilizing the most similar six comparabies for the analysis of market rent. There were only three other senior apartment complexes uncovered in the city of Carlsbad. The adjacent cities of Oceanside and Leucadia were also surveyed for comparable senior's complexes. Apartment buildings for non-restrided tenants with similar one and two bedroom units were aiso surveyed in the subjed's martlet area for martlet levei rents. The comparable rental properties utiiized are similar to the subjed property in location and overaii rentability, varying in age, quality and amenities. Market rents have increased as much as $50 per month over rents from 6 to 12 months ago. Rent levels remained fairly stable over the past several years with current increases warranted due to high occupancy levels and positive economic conditions over the past year. Demand is high with PRA AptLF 6/1/98 Page 10 Loan Number: 4000443 Progressive Realty Advisors LOCATION MAP OF THE RENT COMPARABLE PROPERTIES ©1996 Thomas Bros. Maps PRA AptLF 6/1/98 Progressive Realty Advisors Loan Number: 4000443 limited availability at competing projeds. The projeds with avaiiabie units are reporting lowtumover rates of less than 1 per month. Long term tenancy is common in this market area. All of the projeds offer similar utilities included in the rent and none of the projeds surveyed were offering any rent concessions. The martlet is more responsive to room count and projed amenities than the size of the unit, therefore, the unit mix and bathroom count was given primary consideration. Due to the high occupancy levei of the area, comparable properties of various age, type and locations were necessary to obtain current market expedations. SUMMARY OF RENTAL COMPARABLES Rent Cmp Address # units YB Proximity One Bedroom Two Bedroom 1 Three Bedroom Rent Cmp Address # vac. % vac Utilities * Size Ba Rent VSF Size Ba Rent | $/SF | Size Ba Rent $/SF 1 3090 Jefferson Street Carlsbad 48 1985 3 blocks 492 1.00 700 1.42 0.00 1 1 3090 Jefferson Street Carlsbad 0 0% W.S.T.H 0.00 1 Source: Manager 760-729-2810 Parking: Covered & open Concessions? No Senk>r restricted project 55+ Survey Date: 1/20/00 2 1003 Chinquapin Avenue Carlsbad 36 1985 1 mile SE 550 1.00 675 1.23 1 2 1003 Chinquapin Avenue Carlsbad 0 0% W.S.T.H 550 1.00 675 1.23 1 Source: Manager 760-729-0312 Parking Garage & open Concessions? No Senior's restricted project 55+ Survey Date: 1/20/00 3 3363 Tyler Street Carlsbad 75 1985 3 blocks SW 520 1.00 509 0.98 720 1.00 674 0.94 3 3363 Tyler Street Carlsbad 0 0*^ W.S.T.H 520 1.00 509 0.98 720 1.00 674 0.94 Souro 4 a: Manager Parking Covered & open Concessions? No Senior's restricted low income project 55+ Survey Data: 12/7/99 Souro 4 960 Vine Street Ocearuide 130 1976 2 miles No 500 1.00 700 1.40 Souro 4 960 Vine Street Ocearuide 0 0% W.S.T.H 500 1.00 700 1.40 Source: Manager 760-967-0999 Parking Covered & open Concessions? No Senior's restricted project 62+ Survey Date: 1/20/00 5 2585 Jefferson Street Carlsbad 41 1978 3 blocks No 630 1.00 750 1.19 956 1.50 950 0.99 5 2585 Jefferson Street Carlsbad 0 0% W.S.T.H 630 1.00 750 1.19 956 1.50 950 0.99 Souro 6 a: Manager 760-729-0170 Parking Covered & open Concessions? No No age restrictions Survey Date: 1/20/00 Souro 6 2825 Hope Avenue Carlsbad 20 1984 3 blocks No 600 1.00 725 1.21 | 800 1.00 900 1.13 Souro 6 2825 Hope Avenue Carlsbad 0 0% W.S.T.H 600 1.00 725 1.21 | 800 1.00 900 1.13 Source: Manager 760-72&-5830 Parking. Covered & open Concessions? No No age resrtrictions Survey Date: 1/20/00 Subj 2848 Jefferson Street Carlsbad 57 500 1.00 725 1.45 e» ,..| Subj 2848 Jefferson Street Carlsbad 2 4% Iw.S.T.H 1 500 1.00 725 1.45 e» ,..| Source: Inspection Parking: Carports ^Concessions? No Senoir's restricted project 55+ • utilities W = water; S = sewer; T = trash; H = hot water; G = gas; E = electric; A = All Current adual rents are withinthe range of the area martlet rents. The subjed's estimated market rents are in the middle of the range of the area rents. Analvsis of One Bedroom Units The comparable one bedroom units uncovered in the area provide a range of mari<et rent from $675 to $725 per unit per month. The rent per unit was considered the most appropriate for the marketplace. Comp 1 is the sister projed to the subjed, located on the south side of Carisbad Viiiage Drive. This property is owned by the subjed owner and has very similar unit size, amenities and quality. The projed has recentiy increased its rents with the most recent tenants at $700 per month like the subjed. Comp 2 is a good quality property located adjacent to the east side of the freeway. This complex has similar size units and similar amenities for senior tenants. The rent for this complex is slightly lower due to the location on the freeway and farther walking distance from commercial uses and pubiic transportation. This comp sets the low end of the range. Comp 3 is a similar complex to the subjed with a inferior location adjacent to railroad tracks and farther from commercial uses and public transportation. This comp was recently acquired by the city for low income tenants. The rents are now based on the income of the tenant with rents of $299 for tenants with income below $11,500 and $509 for tenants with income between $11,500 and $18,000. Prior to the saie the rents for this projed were comparable at $675 to $725 for the same one bedroom unit. Comp 4 is a senior's complex located in the adjacent city of Oceanside. This is a similar quality projed with a slightiy inferior location adjacent to the freeway and farther from commerciai uses. This complex has similar overaii amenities and appeal to the subjed. The superior asped of this complex is bus transportation provided by the landlord. This is considered offsetting to the subjed's superior location and access to public transportation, Comps 5 and 6 are average quaiity non-age restrided apartment buildings in the area. These units are slightly larger than the subjed and have slightly superior amenities setting the upper end of the area range. The subjed property currentiy has an asking rent of $725 which is the rent for the most recentiy rented unit. The subjed property has average units with similar overaii appeal to the comps. The subjed's good location near the main traffic street and pubiic transportation was considered to be a positive impact on the rent potential. Based on the datg PpA AptLF tn/M 11 Loan Number: 4000443 Progressive Realty Advisors reviewed, I have estimated martlet rent for the subjed's one bedroom units to be $700 to $725 per month. Analvsis of the Two Bedroom Units The comparable two bedroom units uncovered in the area provide a range of market rent from $900 to $950 per unit per month. The only seniors complex with a two bedroom unit for comparison is comp 3 which is now a low income projed. prior to the sale . the property had rents of $775 to $850 per month for these units. These are inferior to the subjed with an upward adjustment warranted. Comps 5 and 6 are non-restrided complexes with slightly larger units setting the upper end of the range for the subjed property. These are slightly older complexes with the subjed property superior in overaii age and quality. The comps refled a variance of approximately $200 between the one and two bedroom units with the subjed property similar to this range at $175 variance. The most recent unit rented at the subjed was at $900 with occupancy in Febmary. The majority of the other units have rents of $875 which is supported by the three comparabies. This comps and subjed have demonstrated increasing rental rates with each new tumover supporting the higher range for the subject. Based on the data reviewed, I have estimated market rent for the subjed's two bedroom units to be $900. Total Potential Income at Mari<et Level Rents Based on the above analysis of market rent for the subjed property units, the potential annualized mari<et rent is calcuiated as follows: Unit Type # Units Market Rent Monthly Rent Annualized 1 Bd - 1 ba 50 X $700 = $35,000 $420,000 2 Bd -1 ba 7 X $900 = $6,300 $75,600 Totai 57 $724 av. $41,300 $495,600 For the purpose of this analysis the subjed propert/s current adual rents at the time of inspedion will be used in the income and sales comparison approaches. The subjed property's adual rents currently refleds a variance of 5.3% beiow potential mari<et rent. Monthly Rent Schedule Number of Units Unit Room Count Total Bdrm Ba Sq. Ft, Area Per Unit Numtier Units Vacant ACTUAL RENTS Per Unit Unfum. Total Rents FORECASTED RENTS Per Unit Unfum. Total Rents S.F. Room 500 615 1.845 615 1.845 1.23 205 500 635 635 636 635 1.27 212 500 640 5.120 640 5.120 1.28 213 500 650 660 660 660 1.x 217 500 655 3.275 665 3.275 1.31 218 16 SCO 665 10,640 665 10,640 1.33 222 10 500 675 6,750 675 6,570 1.36 225 500 700 2.800 TDO 2.800 1.40 233 500 400 400 700 700 1.40 233 680 850 850 850 850 1.25 213 680 855 855 855 855 1.25 214 680 875 4.375 875 4.375 1.29 219 680 900 900 900 900 1.32 225 39.095 39.215 Annualized Gross Income: 469.1 470.1 Laundrv/Other Income Monthly laundry income for the subject property was $4.30 per unit per month in 1997 and $6.60 in 1998. The annualized laundry income for 1999 was $7.26 per unit per month for owned machines. The rent roil provided stated that monthly laundry income was $414, or $7.26 per unit per month. Historical data compiled from other similar apartment complexes in the area refiect income from leased machines ranging from $4.00 to $12.00 with an average of $8.00 per unit per month on a 50-50 split with the leasing company. The subject's laundry income is estimated at the lower end of the range at $5.00 per unit per month, or $285 per month before calculation of vacancy. The forecast slightiy lower than actual refleds leased machines with the difference representing the potential maintenance and PRA AptLF 6/1/98 Page 12 Progressive Realty Advisors Loan Number: 4000443 replacements for owned machines. Vacancy and Colledion Loss The rental comparabies surveyed provided vacancy fadors as follows: COMPARABLE # UNITS #VAC %VAC Rental 1 48 0 0% Rental 2 36 0 0% Rental 3 75 0 0% Rental 4 130 0 0% Rental 5 41 0 0% Rental 6 20 0 0% Subjed: 57 2 4% TOTAL: 407 2 0% Analysis Vacancy in the area is very low at the projeds surveyed in the area. The comps and subjed above refled an average physical vacancy of 0% as of the date of inspedion. This is a desirable beach oriented community with good overaii appeal. Demand has always been strong in this market with few tumovers and limited downtime. All of the comps are considered to have similar market potential as the subjed and refled the high demand for apartment units. The managers stated that vacant units rent quickly. The subjed had two vacant unit at the time of inspedion, however, both of these were reported as rented with occupancy by the end of the month. One unit was vacant for 3 weeks and the other was vacant for slightly over 1 month. This is typical of the area for the limited number of move out each year. Based on the status of the market and the estimated market rental rates of the subjed, I have estimated a physical vacancy rate of 2% for the property with an additional 1 % to cover any colledion losses or delinquencies. The total of 3% vacancy and colledion loss is typically used by investors in this martlet as evidenced by the use of 3% to 5% vacancy from the data analyzed in the sales comparison approach.. The total vacancy and colledion ioss was estimated at 3%, Effedive Gross Income Comparison Effedive gross income for the subjed property has been estimated at $459,780. The historical data provided refleds a steady increase from $370,638 in 1997 to $444,422 annualized 1999 showing an increase of 10% per year in colleded income. Market income increased dramatically in the past 2 years resulting in higher increases. The estimated effedive income refleds a 3.4% increase in colleded income over 1999 levels. The rental market has been steadily increasing with the strong demand for beach oriented property and the growing economy. Rents have increased by 8% since the beginning of the year. The projeded rents at the subjed are supported by the market rental rates and vacancy projedion. This estimate shouid be attainable with continued competent management and market conditions. Operating Expenses: The operating expenses of the subjed property were forecast based on a review of the past operating history of the subjed, review of the Operating Expense Database (OED), review of published operating expense data from the Apartment Operators Expense Guide (AOEG), and my experience in the appraisal of residential income property. The historical and forecast of individuai expenses have been induded on the foiiowing table. The subjed is a typical apartment building with smaii size one bedroom units. The senior's asped of the complex is not considered to impad the expenses from a standard apartment as there are no additional services or faciiities at the complex. PRAAptLF 6/1/98 Page 13 Loan Number: 4000443 Progressive Realty Advisors Number of Units: 57 OPERATING SUMMARY Gross Sq. Ft. 31,806 Subject's Operating History 1999 Appraiser INCOME 1997 1998 # of mos: 11 Annualized Forecast Rental Income 367.696 538 u/m 396.584 580 u/m 402.834 439.455 642 u/m 470,580 688 u/m Laundry Income 2.942 4.30 u/m 4.514 6.60 u/m 4.553 4.967 7.26 u/m 3.420 5.00 u/m Paridng / Other Income /mo /mo /mo /mo Vacancy (14.220) 3% Total Collected 370.638 542 u/m 401.098 586 u/m 407.387 444.422 650 u/m 459.780 672 u/m EXPENSES Property Taxes 28,012 27,406 29.442 29,442 40,850 Other taxes/lk:ense 455 440 215 215 440 Insurance 4,896 0.16 /sf 3,962 0.12/sf 4,606 5,024 0.16/^f 5,1X 0.16/^f Gas and Electricity 10.865 190/un 9,632 169/un 9.856 10,752 189/un 10.8X 190/un Gas /un /un /un /un Electricity /un /un /un /un Water/Sewer 12,423 218 /un 14,515 255/un 12.666 13,817 242/un 14,250 250/Un Trash Rentoval 2,194 183/mo 2,593 216/mo 2.194 2,393 199/mo 2,400 200/mo Pest Control /un /un /un 856 15/un Maintenance/Repairs 21,661 380/un 17,879 314/un 11.117 12,128 213 /un 14.250 260/un Int/Ext Decorating /un /un /un 2,710 48/un Cleaning /un /un /un 1.970 35/un Supplies 107 2/un 475 8 /un /un 1,425 25/un Elevator Maint. 1,794 150/mo 1,949 162/mo 2.216 2.417 201 /mo 2,1X 175 /mo Pool Maintenance /mo /mo /mo /mo Landscape Maint. 3.835 320/mo 4.501 375/mo 3.788 4.132 344/mo 4,200 360/mo Nonresident Mgmt 18,839 5.06% 20,322 5.07% 19.453 21.221 4.77% 23.000 5.00% Resident Mgr Salary 18,117 26 u/m 21,009 31 u/m 19.068 20.823 X u/m 21.000 31 u/m Resident Mgr Apt. /mo /mo /mo /mo Janitor Salary/Apt. /mo /mo /mo /mo Other Salaries /mo /mo /mo /mo Payroll Taxes 800 800 800 873 1.625 Advertising 129 11 /mo 264 22/mo /mo 360 X/mo Telephone 1,357 1.98 u/m 1,596 2.33 u/m 1.484 1,619 2.37 u/m 1,440 2.11 u/m Legal and Audit 1,725 30/un 1,686 X/un 2.738 2,987 52/un 1.710 X/un Miscellaneous 1,252 22/un 2,161 38/un 2.835 3,093 54/un 2,280 40/un Partner Mgmt 3,768 66/un 4,064 71 /un 4.620 5,040 88/un /un Cable TV 338 6/un 406 7/un 397 433 8 /un 420 7/un Replacmnt Reserves /un 0/un 9.9C9 10.810 190/un 8,550 IX/un /un /un /un /un /un /un /un /un Total Expenses 132,559 2.326 /un 136,651 2.380 /un 147.219 2,563 /un 161.765 2,838 /un Net Operating Income 238,079 266,447 297.203 296,015 Comments on Individual Expense Items Real Estate Taxes - This was based on the current tax rate of 1.0496% of the estimated value in the Sales Comparison Approach with special assessments of approximately $450 added to the base tax rate for an expense of $40,850 (rounded). Insurance - This expense item was reported at $0.15/sf in 1997, $0.12/sf in 1998, and $0.16/sf in 1999. The range of insurance expense from the OED is $0.11 to $0.34 per square foot with an average of $0.23 and the AOEG reports a composite rate expense at $0.20 to $0.28 for buiidings construded after 1975. This equates to $0.14 to $0.20 per square foot for the subjed. I have utilized the upper end ofthe range ofthe subjed's historical expense at $0.16/sf which is considered to be within the range of the guidelines. I have estimated an expense of $5,100 for the subjed. Flood or earthquake insurance has not been considered in this analysis. PRAAptLF 6/1/98 Page 14 Progressive Realty Advisors Loan Number: 4000443 Utilities - The historical data has been provided for aii three years. Gas and eledricity expense was reported at $190 in 1997 and $169 in 1998 with the annualized data at $189. The units are ail separately metered with gas for hot water and laundry and the eledricity for common areas only. Based on the AOEG, gas expense has a range of $120 to $250 per unit with an average of $170 and eledricity has a range of $25 to $50 per unit. I have utiiized a total of $190 per unit for gas and eledric which is commensurate with the history and the guideiines. Gas was estimated at $150 per unit and eledric at $40 per unit. Water and sewer expense has been $218 per unit in 1997 and $255 in 1998 with the annualized at $242 in 1999. The guide has a range of $100 to $300 with an average of $200 and my OED at $109 to $323 with an average of $211 per unit. The current adual expense is in the middle to upper end of the range based on the unit mix. I have utilized $250 per unit. Trash Removal - This expense was reported at $183 per month in 1997, $216 in 1998 and $199 for annualized 1999. AOEG reports trash expense per unit at $3 to $8 per unit per month and the OED at $7 to $18 with an average of $11 per unit. The history is refieded at $3.50 to $3.75 per unit per month. I have utilized a trash expense of $200 per month, or $3.50 per unit per month refleding a similar expense item in the future. Maintenance and Repairs - Maintenance expense was typical for the subjed over the past few years incorporating several categories and capital improvement expenses, i have utilized the OED and AOEG in my estimates for the above items. I have considered the smaller size of the units and the overall good condition in this analysis to conclude a per unit stabilized maintenance toward the middle of the range. Pest Control - $15 per unit per year Maintenance - $250 per unit Painting - $100 per unit x 57 units x 30% tumover each year plus $1,000 for exterior Cleaning - $80 per unit x 57units x 30% tumover each year plus $50 per month for hallways Supplies - $25 per unit per year Total expenses for the above items equates to $21,210, or $372/unit and $0.67/sf. These are within the typical guidelines for property of this age, quaiity and condition. The historical data was similar to the forecast. The estimate is considered to refled a stabilized year for the analysis. Elevator Maintenance - The subjed has one elevator with historical monthly expenses of $150 to $162 with year to date data annualized at $201. The guidelines refled $150 to $175 per month for typical elevator service. I have projeded $175 per month, which is within the range of the historical data, for regular service oniy. Landscape Maintenance - The historical data varies from $320 to $375 per month. The manager stated that the landscape contrad is at a monthly amount of $350. The AOEG reports landscape expenses at $300 to $800 per month for projeds of this size. The subjed is considered to be at the lower end of the range of guide due to the limited amount of landscaped areas on this comer iot. I have utilized the current monthly on-site landscape contrad of $350 per month. Non-Resident Management - The historical data was fairiy consistent at 5.08% and 5.07% of colleded income for this expense item in 1997 and 1998. The guidelines show this expense at 4% to 6% of colleded income with an average of 5% which well supports the historical data. I have utiiized the middle of the range of management expense at 5% for the area. Resident Manager Salary - The current resident manager has received compensation of approximately $1,750 per month based on the past 2 years of data. The guidelines for a projed of this size refled managers compensation at $20 to $40 per month, or free rent on an apartment plus a salary of $0 to $800 per month. I have utilized the current historical data at $1,750, or $30 per unit per month v^ich is well supported by the guidelines. Advertising - The historical data reflects a minor amount for this item due to the stability of the tenant base. I have projeded a minor amount of $30 per month, which is within the guideiines. This considers local advertising a few months each year and posted signs. Telephone - The historical data refleds a typical range for telephone expenses for the subjed's office at $1.98 to $2.37 per unit per month. The guidelines refled expenses at $25 to $75 per month PRA AptLF 6/1/98 Page 15 Progressive Realty Advisors Loan Number: 4000443 per line, or $0.75 to $2.50 per unit per month. The forecast is $120 per month, or $2.11 per unit per month which is well supported by the guidelines. Legal and Audit - This expense was reported at $30 per unit in 1997 and 1998 with the annualized data slightly higher at $52. The guidelines refled $30 to $40 per unit as a stabilized expense. I have estimated $30 per unit for the subjed property as a stabilized annual expense. Miscellaneous - Typically this expense item is used as a catch all category for historical expenses, i have utilized an expense of $40 per unit per year to inciude any unforeseen items that do not fit into the above categories. This is within the range of the historical data and considered reasonable for analysis. Cable TV - The subjed property has a cable expense for the television in the recreation room. This expense has been $28 to $36 per month which is typical for local cable service. I have estimated an expense of $35 per month for the subjed. Replacement Reserves - The subjed was placed at the low end ofthe range of reserve expense at $150 per unit due to the age of the projed, smaller size and amenities of the units and the historical range of the replacements. Partnership Management - This expense is associated diredly with the operations of the owner of the complex and is not considered to be an operating cost of the property, therefore, this expense item was omitted from the forecast. Total Operating Expenses The subjed's historical expenses are considered to be low for 1997 and 1998 as the total expenses do not contain the higher forecast of real estate taxes or reserve expenses. The other expense items are in line with the historical data and the industry guidelines. Total estimated operating expenses for the subjed property and the comparable sales are summarized at the bottom of the Sales Comparison Summary in tenns of a percentage of the effedive gross income, total expenses per unit and per square foot of improvements. The comparable sales bracket the subjed's estimated expenses in temns of expense per unit, per square foot and as a percentage of colleded income. The comps range as follows: Expense per Unit $2,400 to $3,993 Subjed $2,838 Expense per SF $4.09 to $5.01 Subjed $5.09 Expense % 33.72% to 43.86% Subjed 35.18%% The subjed expenses are considered to be supported by the comparable sales data, review of operating expense guideiines, and the historical evidence of the property. The subjed property is at the low end of the range on a per unit basis due to the unit mix of small one bedroom units. The per square foot expense is well supported by the range with comps 1,2, 3,4, and 6 bracketing the average unit size and expense levels. The subjed's expenses as a percentage of colleded income is also well supported by the sales data. The total estimated expenses are reasonable for the analysis. Dired Capitalization Dired capitalization is the most recognized method of analysis involving the use of a one year net income estimate and an overall capitalization rate. The overaii capitalization rate of the subjed property was based on analysis of the rates derived from the improved sales comparabies. PRA AptLF 6/1/98 Page 16 Progressive Realty Advisors Loan Number: 4000443 Overall Rates Derived From Improved Sales COMPARABLE OAR Comparable Sale 1 7.68% Comparable Sale 2 6.82% Comparable Sale 3 7.97% Comparable Sale 4 6.46% Comparable Sale 5 8.46% Comparable Sale 6 6.47% Subject Analysis - The comparabies reported a range of potential overaii capitalization rates from 6.46% to 8.46%. Comps 1, 2, 3 and 4 are the most similar senior restrided apartment complexes with similar projedions of income, vacancy and expense levels providing the best comparison to the overall risk level of the investment. Comp 1 is in the immediate area of the subjed with the most similar income potential, quality and locational aspeds and was given the most weight in the analysis. The purchase by the city for low income housing was not considered to have a significant impad to the price, however, the motivation of the buyer may have placed slight downward pressure on the risk of the investment. The property was converted to a subsidized projed after the sale with the purchase based on current martlet value giving good weight to the indicator. Comp 2 is a very recent dosed saie of a good quality property with a slightly superior location near a major hospital. The rents were recently raised and the buyer anticipates some additional increases in the future which influenced the low end overaii rate. This comp provides support to the low end risk for this investment type. Comps 3 and 4 were given supporting emphasis due to the similarity in property charaderistics and investment risk as senior apartments in inferior areas of San Diego. The incomes were varied but the risk of investment is considered to bracket the subjed. Comps 5 and 6 are non-restrided apartments in the subjed's market area providing some support to the investment risk perceived in this Carisbad area. Comp 5 soid with very high rental rates for the area which is refieded in the higher risk rate. The lack of upside potential in income increased the risk of the income stream resulting in a slightiy higher rate. Comp 6 has a similar unit mix and was considered to provide good secondary support to the overall rate. The subjed property is considered to be best placed toward the middle to upper end of the range of the comps with most weight to comp 1. The slightly inferior location is partially offset by the motivation of the buyer. Comps 2, 3, 4 and 6 provide adequate support to a potential range between 7.0% and 8.0%. Based on the data and analysis of the improved sales and the subjed's charaderistics, I have estimated the overaii rate for the subjed at 7.75%. The estimated overall capitalization rate for the subject property has been conduded at 7.75%. INCOME APPROACH SUMMARY Total Gross Annual Economic Income Less Vacancy and Collection Loss Effective Gross Annual Income Total Operating Expenses Net Operating Income Capitalized at (%) Indicated Value 3% 35.3% 474.000 14.220 459.780 161,765 298.015 7.75% $3.845.355 Based on the analysis and conclusions above, it is my opinion that the value estimate ofthe subjed property, via the Income Approach, is: Concluded Value via the Income Approach: $3,845,000 PRAAptLF 6/1/98 Page 17 Progressive Realty Advisors Loan Number: 4000443 SALES COMPARISON APPROACH The Sales Comparison Approach is the process in which market value estimate is derived by analyzing the market for similar properties that have recently sold, are listed for sale, or under contrad for sale, and comparing these properties to the subjed property. The comparative analysis performed in the approach focuses on similarities and differences among properties and transadions that affed value. These may include differences in property rights, motivations of buyers and sellers, financing terms, market conditions at the time ofthe sale, size, location, physical features and economic charaderistics. The principle of substitution, as appiied in this approach, holds that the vaiue of a property tends to be set by the price that would be paid to acquire a substitute property of similar utility and desirability within a reasonable amount of time. The sales comparison approach is generally considered to be the most indicative measure of value when adequate, appropriate data is available. Twelve improved sales of residential income property were uncovered in the mari^etplace. There were no listings of senior's apartment complexes uncovered in the marketplace at this time. Due to the senior's status of the subjed property, comparable senior restrided complexes from other areas of San Diego County were utiiized in the analysis. I have also considered non-restrided apartment complexes in the subjed's market immediate market area in the analysis. The most comparable apartment complexes with similar property charaderistics utilized in the analysis of the subjed property are summarized in the following table. The comparabies utilized are considered to be the best comparable data available for analysis. The Sales Comparison Approach analyzes the subjed property based on four separate methods, the Effedive Gross Income Multiplier and the Price Per Unit, Price Per Room, and Price Per Square Foot from the comparable sales data. Discussion Of Sales Comparabies Comparable Sale 1 is a very similar senior's apartment complex located in the subjed's immediate area. This is a three story complex with elevator access, recreation room and laundry facilities. The projed has gated entry and parking with iimited open parking for the tenants at the rear of the buiiding. There are mostly smaller one bedroom units with a few two bedrooms units available. The complex is average in overaii condition and appeal. The surrounding area is inferior to the subjed with railroad tracks behind the complex and some industrial uses aiong the street. This property is farther from the main commercial traffic street and does not have the same access to public transportation or the senior center. The property was placed on the market in July, 1998 at the list price of $5,125,000. The city expressed interest in the projed within the first month and began an 6 month process of obtaining approvals for acquisition. The city based their purchase price on an independent market vaiue appraisal of the complex. The seller continued to martlet the property and received a few verbal offers close to the final sales price during the listing period. The buyer of the complex is the Carisbad Redevelopment Agency to provide low income housing for the city. The projed had several HUD tenants at the time of the sale with rents of $550 to $650 considered close to mari<et levels at the time. The city has since changed the rental strudure of the projed with income restridions on the tenants and rents of $299 to $509 depending on income levels. Comparable Sale 2 is a good quaiity senior's apartment building located in the Hillcrest area of San Diego. This is a four story elevator building with tuck under parking. The building has security access, a recreation room and laundry faciiities. The unit mix consists of mostiy smaller one bedroom units with a few two bedroom units available. The complex was in overaii good condition at the time of this recent sale. Prior to this sale, the property was purchased in February, 1999 at the reported price of $2,925,000. At that time the property had some deferred maintenance to the exterior, roof and landscaping at estimated costs of $50,000. The buyer made the improvements to the property and increased the rental strudure of the units and placed the building back on the market. The property was listed for $3,750,000 and received several offers in the first month with the new sale price of $3,685,000. The buyer put 42% down and assumed the existing 1st TD from Washington Mutual. The projed's appeal was considered good for senior's tenants. The complex is located in a similar area with commercial uses and public transportation within 1 block and a major hospital close to the property. Comparable Sale 3 is a average quaiity senior's apartment building located in the Talmadge area of San Diego. This is a three story elevator buiiding with iimited partying and security entry. The unit mix is all one bedroom units with similar unit size and amenities. The complex has a recreation PRA AptLF 6/1/98 Paga 18 Progressive Realty Advisors Loan Number: 4000443 room and laundry fadlities. The property was reported to be in good condition with no deferred maintenance. The overaii location is average with commercial uses and public transportation several blocks north on El Cajon Boulevard. The rents of this complex were considered to be slightiy below market levels at the time of the sale with some inaeases possible with tumover. Comparable Sale 4 is a good quality senior's apartment building located in the North Park area of San Diego. This is a four story elevator building with security access and limited on site parking. The unit mix is mostly one bedrooms of average size for senior tenants, with a few two bedroom units. The complex has laundry facilities, however, there is no recreation room. The overall condition of the property is good with good overaii appeal. The location is considered to be good with commerciai uses and pubiic transportation within a block of the property. The rents of the units were considered to be slightly below market levels at the time of the sale with some increases possible with tumover. Comparable Sale 5 is a average quality non-restrided apartment buiiding located in the dty of Carisbad. The property is a typical two story walk up apartment buiiding with adequate partying and amenities. The unit mix is mostly two bedroom units of average size for the area v^th upper end maricet rents. The complex has a pool, spa and laundry facilities. The property sides to railroad tracks which is inferior for the tenants, however, it is on the west side of the tracks closer to the beach which is slightly offsetting. This is a recent apartment transadion in the area with rents close to market levels and was considered to be a typical arms length sale for analysis. Comparable Sale 6 is a slightiy dated saie of a good quaiity, non-restrided apartment building located in the city of Carisbad. This is a two story walk up building over garage paricing with good overaii condition and appeal. The unit mix of the property is slightly inferior with mostly studio and one bedroom units. The complex does not have any common area amenities which does not have a significant impad to the property. The property sides to the freeway which is considered to be slightly inferior in this beach oriented community. The rents of the complex were considered to be at market levels at the time of the sale. The sale was considered to be a typical mari<et level transadion with the seller carried secondary financing not impeding the sales price. The pertinent details of the sales stated above have been displayed in the grids in the following pages. PRA AptLF 6/1/98 Page 19 Loan Number: 4000443 Progressive Realty Advisors LOCATION MAP OF THE SALE COMPARABLE PROPERTIES 1106 G H J ©1996 Thomas Bros. Maps ABCDEFGHJABCDEFGHJABCOEFGHJABCDEFGHJABCDE PRAAptLF 6/1/98 Progressive Realty Advisors Loan Number: 4000443 SALES COMPARISON SUMMARY ITEM SUBJECT COMPARABLE No. 1 COMPARABLE No. 2 COMPARABLE No. 3 Address 2848 Jefferson Street Carisbad 3363 Tyler Street Carisbad 1050 Essex Street San Diego 53X Orange Avenue San Diego APN 203-202-19 204-070-19 & 27 452-156-22 472-191-11 Proximity to subject b bkx:ks X miles south X miles south Map Code 1106-E5 1106-E6 1269-B5 1270-B4 Lot Size/Density 42,000 SF 74.7Un/Ac 60.984 SF 53.6Un/Ac 17,498 SF 114.5Un/Ac 28.386 SF 109.0Un/Ac Year Buitt 1989 1986 1988 1985 Project type 3-Story elevator (Senior) 3-Story elevator (Senior) 4 story elevator (Senior) 3 story elevator (Senior) Quality Good Good Good Good Condition Good Good Good Good Recreational Facilities Rec Room Rec. Room Rec. Room Rec. Room Parking 29 spaces 0.5 sp/unt 56 spaces 0.8 sp/unt 44 spaces 1.0 sp/unt 21 spaces 0.3 sp/unt Building Area 31.806 sq.ft. 42,660 sq.ft. 28,020 sq.ft. 34,7X sq.ft. Average Unit Size 558 sq.ft. 569 sq.ft. 609 sq.ft. 490 sq.ft. Unit Breakdown TOTALS: «of Units Unit Room Count #of Units Unit Room Count #of Units Unit Room Count fof Unit Room Count Unit Breakdown TOTALS: «of Units Rooms Bdrms baths #of Units Rooms Bdrms baths #of Units Rooms Bdrms baths Units Rooms Bdrms baths Unit Breakdown TOTALS: 50 3 1 1.00 66 3 1 1.00 1 2 0 1.00 71 3 1 1.00 Unit Breakdown TOTALS: 7 4 2 1.00 9 4 2 1.00 37 3 1 1.00 0 0 Unit Breakdown TOTALS: 0 0 0 0 8 4 2 2.00 0 0 Unit Breakdown TOTALS: 0 0 0 0 0 0 0 0 Unit Breakdown TOTALS: 0 0 0 0 0 0 0 0 Unit Breakdown TOTALS: 57 178 75 234 46 145 71 213 Vacant units at sale 2 or 4% vacant 0 or 0% vacant 1 or 2% vacant 0 or 0% vacant Util. paid by owner i/V.S.T.H W,S,T.H W,S,T,H W.S.T.H Oata Source Inspection Comps, Inc/Broker Comps, Inc/Broker Comps. Inc Sales Price $5,000,000 $3,685.0X $2.8X,0X Cash Equivalency Cash equiv sale price 0 5.000.000 3.685.0X 2.8X,0X Time Adjustment % % % % Def. Maintenance Rent Loss/Profit Adjusted Sales Price $ 0 $5,000,000 $3.685,0X $2,8X,0X Sale-Listing / Doc # Refinance Sale / Doc#666924 Sale/Doc#7771X Sale/Doc#704822 Date of Sale September X, 1999 COE November 24, 1999 COE October 29, 1998 COE Condition of Sale None None None Market Time 6 months 1.5 nrranths 3 months Down Payment % 1X.0 % $5,000,000 41.11 % $1,515,000 % IstTD % % 58.89 % $2,170,0X % Terms All Cash Assumed WAMU loan Assumed existing loan 2nd TD\Other % % % % Terms Gross Annual Income 474,000 $598,380 $398,952 $418,3X Vacancy 3% 14,220 3.x % 17,951 3.x % 11.969 5.x % 20,915 Effective Gross Income 459,7X 580.429 386.983 X7.385 Expenses 35.18 % 161,765 33.81 % 196.267 35.07 % 135.698 43.x % 174.2X Net Operating Income $298,015 $384,162 $251,285 $223,096 FINANCIAL INDICATOR, S GIM 0.00 8.x 9.24 6.x EGIM 0.00 8.61 9.52 7.05 OAR 7.68% 6.82% 7.97% UNITS OF COW PARISON AND NET INCOM E RATIO ANALYSIS VALUE PER UNIT j] Average NOI/Unit $435.69 1 $426.85 $455.23 $261.85 Income Ratio ^^^^J^^^^m^^^ 102 0.96 1.x Price per unit $ 0 1 $66,667 $X.109 $X,437 Adjusted price/unit $68,000 $76,905 $65,465 VALUE PER ROOM | Average NOI/Room $ 139.52 $ 1X.81 $ 144.42 $ 87.28 Income Ratio 1.02 0.97 1.x Price Per Room $ 0 $21,368 $25,414 $13,146 Adjusted Price/Room $21,795 $24,652 $21,034 VALUE PER SO. FT. 1 Averaae NOI/Sq. Ft. $ 0.78 1 $ 0.75 $ 0.75 $ 0.53 Income Ratio ^^^m^JJ^m^^^ 1.04 1.04 1.47 Price Per Sq. Ft. $ O.X 1 $117.21 $ 131.51 $ X.48 Adjusted Price/Sq. Ft. $121.90 $ 1X.77 $118.31 EXPENSE COMPARISOl Percentage of EGI 35.18% X.81% 35.07% 43.X% Expenses/Unit $2,837.98 $2,616.89 $2,949.96 $2,454.77 Expenses / Sq. Ft. $ 5.09 $ 4.x $ 4.84 $ 5.01 PRAAptLF 6/1/98 Page 20 Loan Number: 4000443 Progressive Realty Advisors SALES COMPARISON SUMMARY (Cont.) ITEM SUBJECT COMPARABLE No. 4 COMPARABLE No. 5 COMPARABLE No. 6 Address 2848 Jefferson St-eet Carisbad 3604 Georgia Sti-eet San Diego 355-395 Pine Avenue Carist>ad 10X Chinquapin Avenue Carisbad APN X3-202-19 452-362-X 204-132-26 206-050-23 Proximity to subject X miles south 3 bkx:ks west 1 mile southeast Map Code 1106-E5 1269-06 1106-E6 1106-F6 Lot Size/Density 42.000 SF 1 74.7Un/Ac 15.000 SF 92.9Un/Ac 45.738 SF 1 29.5Un/Ac 43,124 SF 44.4Un/Ac Year Buitt 1989 1985 1985 1979 Project type 3-story elevator (Senior) 4-story elevator (Senior) 2-story walk-up 2-story walk-up Quality Good Good Good Good Condition Good Good Good Good Recreational Facilities Rec Room Rec. Room Pool/Spa None Parking 29 spaces 0.5 sp/unt 15 spaces 0.5 sp/unt 38 spaces 1.2 sp/unt 69 spaces 1.6 sp/unt Building Area 31,806 sq.ft. 17.144 sq.ft. 26.0X sq.ft. 26,8X sq.ft. Average Unit Size 558 sq.ft. 5X sq.ft. 8X sq.ft. 610 sq.ft. Unit Breakdown TOTALS; fof Units Unit Room Count fof Unit Room Count fof Unit Room Courtt fof Unit Room Count Unit Breakdown TOTALS; fof Units Rooms Bdrms baths Units Rooms Bdrms baths Units Rooms Bdrms baths Units Rooms Bdrms baths Unit Breakdown TOTALS; 50 3 1 1.00 28 3 1 1.00 1 3 1 1.00 18 2 0 1.00 Unit Breakdown TOTALS; 7 4 2 1.00 4 4 2 1.00 30 4 2 2.00 22 3 1 1.00 Unit Breakdown TOTALS; 0 0 0 0 0 0 4 4 2 1.00 Unit Breakdown TOTALS; 0 0 0 0 0 0 0 0 Unit Breakdown TOTALS; 0 0 0 0 0 0 0 0 Unit Breakdown TOTALS; 57 178 32 100 31 123 44 118 Vacant units at sale 2 or 4% vacant 0 or 0% vacant 0 or 0% vacant 0 or 0% vacant Util. paid by owner W.S.T.H W.S.T.H W.S.T.H W.S,T,H Data Source Inspection Comps, Inc/Appraiser Comps. tnc/Lender Comps, Inc/Lender Sales Price $1,7X.0X $2.875.0X $3,1X,0X Cash Equivalency Cash equiv sale price 0 1.7X.0X 2.875.0X 3.1X.0X Time Adjustment % % % % Def. Maintenance Rent Loss Adjusted Sales Price $ 0 $1.7X.0X $2.875.0X $3,1X,0X Sale-Usting / Doc # Refinar)ce Sale/Doc#087544 Sale/Doc#629465 Sale/Do#674441 Oate of Sale February 20.1998 COE September 14, 1999 COE October 19,1998 COE Condition of Sale None None None Market Time Unknown 3 rTK)nths 1 month Down Payment % 1X.0 % $1.7X.0X 25.x % $718,7X 25.49 % $X3,0X IstTD % % 75.x % $2,1X,2X X.78 % $2,072,0X Terms All Cash New IstTD-WAMU New IstTD-WAMU 2nd TD % % % 8.73 % $275.0X Terms Seller 2nd Gross Annual Income 474.0X $1X.440 $378,456 $3X,0X Vacancy 3% 14.220 5.x % 9.822 3.x % 11,354 5.x % 16.5X Effective Gross Income 459.7X 1X.618 X7,102 313.5X Expenses 35.18 % 161.765 41.15 % 76.8X 33.72 % 123.X1 35.x % 1X.725 Net Operating Income $298,015 $1X.818 $243.X1 $203,775 FINANCIAL INDICATORS QIM O.X 8.65 7.x 9.55 EGIM OX 9.11 7.83 1005 OAR 6.46% 8.46% 6.47% UNITS OF COM PARISON AND NET INCOME RATIO ANALYSIS VALUE PER UNIT | Average NOI/Unit $ 435.x $ 285.x $ 654.x $385.94 Income Ratio 1.52 0.67 1.13 Price per unit $ 0 $53,125 $92,742 $71,XI Adjusted price/unit $X.7X $62,137 $X,898 VALUE PER ROOM Average NOl/Room $1X52 1 $ 91.52 $ 164.84 $ 143.91 Income Ratio M^^^^:^^^^^:^^ 1.52 0.85 0.97 Price Per Room $ 0 1 $17,0X $23,374 $26,695 Adjusted Price/Room $25,840 $19.8X $25,894 VALUE PER SQ. FT. || Average NOI/Sq. Ft. $ 0.78 $ 0.53 $ 0.78 $ O.X Income Ratio ^^^^^^^^^^^^^^^ 1.47 1.x 1.24 Price Per Sq. Ft. $ O.X $ X.16 $ 110.x $117.27 Adjusted Price/Sq. Ft. $ 145.77 $ 110.x $ 145.41 EXPENSE COMPARISON Percentege of EGI 35.18% 41.15% 33.72% X.X% Expenses/Unit $2,837.98 $2,4X.X $3,X3.X $2,493.75 Expenses / Sq. Ft. $ 5.x $ 4.48 $ 4.76 $ 4.x PRAAptLF 6/1/98 Page 21 e^i Progressive Realty Advisors Loan Number: 4000443 Effedive Gross Income Multiplier The sales reported effedive gross income multipliers as foilows: COMPARABLE EGIM Comparable Sale 1 8.61 Comparable Sale 2 9.52 Comparable Sale 3 7.05 Comparable Sale 4 9.11 Comparable Sale 5 7.83 Comparable Saie 6 10.05 Sut)ject Property 0.00 Analysis of the Data The comparabies reported a fairly wide range of potential effedive gross income multipliers from 7.05 to 10.05. Comps 1 and 2 are the most similar senior restrided apartment complexes with similar projedions of income, vacancy and expense levels providing the best comparison to the multiplier for the subjed. Comp 1 is in the immediate area of the subjed with the most similar income potential, quaiity and locational aspeds and was given the most weight in the analysis. The purchase by the city for low income housing was not considered in the price, however, the motivation of the buyer may have placed slight upward pressure on the indicator. Comp 2 is a very recent sale with slightiy superior buiiding charaderistics and is located close to a major hospital which is a good asped of this senior building. This comp sets the upper end of the range of the data. Comps 3 and 4 were given supporting emphasis due to the similarity in property charaderistics and investment risk, however, these are slightly dated sales of property located in inferior areas and were given minor emphasis. Comps 5 and 6 are non-restrided apartment complexes in the subjed's market area providing some support to the investment risk perceived in the market. Comp 5 sold with very high end rental rates for the area which is refieded in the lower multiplier. Comp 6 has a similar unit mix and was considered to provide good secondary support to the indicator. The subjed property is considered to be best placed toward the middle of the range of the comps with most weight to comps 1 and 2. Comps 3, 4, 5 and 6 provide adequate support to a potential range between 8.0 and 9.0. Based on the data and analysis ofthe improved sales and the subjed's charaderistics, I have estimated an effedive gross income multiplier of 8.50 for the subjed. This equates to a value for the subjed property as follows: EGIM Effiective Gross Income Value 8.50 X 459.780 $3,908,130 Units of Comparison The comparable sales are also analyzed based on the unadjusted indicators and adjusted indicators of the Income Ratio Analysis. The Income Ratio Method adjusts the indicators of price per unit, per room and per square foot indicators extraded from the comparabies on the basis of the ratio between the income generating ability of the subjed property and the comparabies. The individual adjustments for location, age, size, quality, condition, etc.. are considered to be incorporated in the income a property can produce. The ratio is derived from the net incomes of the properties and is applied to the appropriate value indicator of the comparable to derive the adjusted value range for the subjed property. The Income Ratio Analysis is located at the bottom of the Sales Comparison Summary grid. Analysis of the Data The comparable sales provided a fairiy wide range of unadjusted values per unit from $39,437 to $92,742, refleding the various unit sizes and income potential of the properties analyzed. Comparable 1 is the most similar to the subjed property in terms of age, quality, unit type and income and was considered to have the most weight in the analysis. The buiiding is adjacent to railroad tracks and near industriai uses slightly inferior to the subjed. This property was purchased by the city with some motivation to acquire low income units. The property was adequately mari<eted and sold at maricet value with the per unit indicator given weight in the analysis. Comp 2 is aiso considered to have very similar property and income charaderistics to the subjed and was also a martlet saie with good emphasis to the potential for the subjed. Comp 3 is an inferior overall location and the income generated was much lower refleding the extreme low end of the potential PRA AptLF 6/1/98 Pag« 22 Progressive Realty Advisors Loan Number: 4000443 range for the subjed warranting significant upward adjustment. Comp 4 is a dated sale of a similar quaiity property with an average location. The market has increased significantly since the sale date of this property with upward adjustments warranted. Comp 5 is a non-restrided apartment building with superior units and a much higher income potential for the area. The per unit indicator sets the extreme upper end of the area range warranting significant downward adjustment. Comp 6 has a fairiy similar unit mix to the subjed with small studio and one t>edroom units generating a slightiy lower income. The property has a slightly inferior location adjacent to the freeway but the overall quality, appeal and amenities are similar, warranting emphasis in the analysis. On an unadjusted basis, the subjed property is considered to be bracketed by comps 1,2,4 and 6 with the subjed at the middle to upper end of the range based on age, quaiity and location. After adjustment in the income ratio method, the range is $62,137 to $80,898. Comp 1 required the least net adjustment with similar property charaderistics and income. Comp 2 refieded a downward adjustment due to the increased income and the slightly superior location. The adjusted indicator was given secondary weight in the analysis. Comp 3 warranted a significant upward adjustment due to the low end income generated but was considered to have some weight in tlie analysis. This adjusted indicator provides good support to the correlation of income to purchase price. Comps 5 and 6 provide some support to the overall analysis with the adjusted range of comp 5 slightiy lower due to the higher market level income received at the time of same. Most weight in the analysis was given to the unadjusted indicators of comps 1 and 6 with additional emphasis to the adjusted indicators of comps 2, 3 and 5. Secondary emphasis was given to the adjusted indicators of comps 1, 4 and 6. Based on the data and analysis above, I have concluded on a price per unit of $68,000. The indicators of price per room and per square foot were considered to have similar analyses to the per unit analysis. Comps 1 and 2 are the most recent similar property types with similar unit mix and per room indicators of $21,368 and $25,414. These properties bracket the average per room income of the subjed and have the most similar unit mix. These provide the most recent market evidence and were given the most weight. The adjusted range of comps 3,4, 5 and 6 were considered to have supporting weight with a range of $19,868 to $25,894. The subjed's per room estimated is best placed between comps 1 and 2 and at the low end of the adjusted range of the other comps. Based on the data and analysis above, I have concluded on a price per room of $22,000. The unadjusted range per square foot is $80.48 to $117.27 with adjusted price per square foot range higher at $110.58 to $145.77 due to the smaller unit size and high end income generated per square foot. Comps 1,2 and 6 were given the most weight in the analysis based on unadjusted comparisons. The adjusted range of all of the comps were given minor secondary weight due to the subjed's higher income generated per square foot. Based on the comparable data, giving emphasis, I have concluded a per square foot estimate at $120. This equates to individuai indicators of value for the subjed property as foilows: Estimated Value Per Unit No. of Units Indicated Value $68,000 X 57 $3,876,000 Estimated Value Per Room No. of Rooms indicated Vaiue $22,000 X 178 $3,916,000 Estimated Value Per Sq.Ft Total Sq.Ft Indicated Vaiue $ 120.00 X 31,806 $3,816,720 Condusion ofthe Sales Comparison Approach The Effedive Gross Income Multiplier Method and the individuai Per Unit, Room and Square Foot indicators provided estimated values for the subjed property as foiiows: Effedive Gross Income Multiplier $3,908,130 Price Per Unit: $3,876,000 Price Per Room: $3,916,000 Price Per Square Foot: $3,816,720 PRA AptLF 6/1/98 Page 23 Progressive Realty Advisors Loan Number: 4000443 Most weight was placed on the price per unit and per room indicators as these are the most relied upon by market participants. The price per square foot and EGIM indicators also provide support to the final condusion. I have concluded that the Saie Comparison Approach supports a value estimate of: Concluded Value via the Sales Comparison Approach: $3,900,000 FINAL RECONCILIATION The reconciliation of value derived by the cost, income, and sales comparison approaches is the final step in the appraisal process. In recondling these indicators into a final value estimate, fadors such as the purpose of the appraisal, property type, quality of data, and adequacy of the data were taken into consideration. Most important consideration in estimating the subjeds value is to identify the approach most appropriate for the market place. The values concluded by each approach are as foilows: Cost Approach N/A Income Approach $3,845,000 Sale Comparison Approach $3,900,000 The Sales Comparison Approach has been given the most weight in the final estimate of value for the subjed property. The quality of the sales data obtained was suffident, as well as the indicators of EGIM and Value Per Unit, refleding the attitudes of the investors in this mart^etplace. The Income Approach was also given significant weight as this is an income producing property generating sufficient net income to provide a reasonable retum to investors in this mart^etplace. The Cost Approach was omitted from the analysis due to the lack of avaiiabie land sales data and the difficulty in estimating accrued depreciation. This method is not widely used by investors of existing income producing property in built up neighborhoods. Based on the data and analysis contained in this report, and giving careful consideration to the fadors which affed real estate value, the estimated Stabilized Market Value of the Fee Simple interest in the subjed property, as of January 19, 2000 is: Stabilized Market Value Estimate $3,850,000 "AS IS" Martlet Value The subjed property is currently operating at a stabilized level with no deferred maintenance, rent loss, or capital improvements. Therefore, the "as is" market value of the subjed property as of January 19, 2000 is equivalent to the stabilized mari<et vaiue of the subjed property: "As Is" Market Value Estimate $3,850,000 PRA AptLF 6/1/98 Page 24 Progressive Realty Advisors Loan Number: 4000443 EXHIBITS Preliminary Titte Report Owner's Rent Roll Owner's Operating Statements Owner's Environmental Disclosure Appraiser's Environmentai Checklist Appraisal Engagement Letter Data Sheet on the Subjed Property Qualification's of the Appraiser Photographs of the Subjed Property Photographs ofthe Comparable Properties PRA AptLF 6/1/98 P«g« 25 T-826 P.03/08 F-625 ... CHICAGO TITLE COMPANY PRELIMINARY REPORT ^" . ./ilef^qQ:.- PGR CARLSBAD SRS 2B4a JEFFERSON STREET CARLSBAD.CA Dated as of: December 1.7,199B at 7:30 AM Order No.: 203048008.-Ul6 ' CHICAGO TITLE pOMPANY hereby reports tliat it is prepared to issue, or cause to be issued.'as of the date ' beraorarPdficy or pol/cies of Title Insurance describing the land and the estate or interest therein hereinafter set forth, Ineudn^igainst loss which may be sustained by reason of any defect iien or encumbrance not shown or referred to as Vn &^B|p(ion in Schedule B or not' excluded from coverage pursuant to the pn'nted Schedules, Conditions and .Sriisbl^ti^jl^ of ^ Poiicy [•The prinled Exceptions and Exclusions-from the coveiage of said Policy or Polides are set forth in the attached list I Copies'a( the Policy fornns are avaiiabie upon request Plta^ rMdlhe ^(c^ptions shown or refemsd to in Schedule 8 and the exceptions and exdusions set forth In The BiTa.ched:Jliit of thle import carefully. The etceptiona and exdusions are meant to provide you wtth notice of matters •whl^ are not covered under the terms of the iltia Insuifance policy and should be carefully considered. It Is .; irfipprttnt to note that this preliminary repon js not a written representation as to the condition of title and may not j Jlst alilisiviB. defects* and encumbrances affectjng title to the iand. THlS-jREPORT (AND ANY SUPPLEMENTS OR AMENDMENTS HERETO) IS ISSUED SOLELY FOB THE PURPOSE OF »^ClUTA'ftMO Th£ ISSUANCE OF A POUCV OF TITLE INSURANCE AND NO LiABlLiTY IS ASSUMED HEREBY. IF IT IS 'D^.SIFt£b. 'THAT LIABIUTY BE ASSUMED PRIOR TO THE ISSUANCE OF A PQUCY OF TITLE INSURANCE, A BINDER .( Ofj-COMii^lTMENT SHQULD BE REQUESTED. |':The'f;;n7njbrpQricy of titie insurance contemplated by this report is; • .AMERICAN LAND TITLE ASSOa ATI ON LOAN EXTENDED COVERAGE POUCY •i- . .1 ViBirUs On The Web: w^emdM8ion.cn.com Title Oepartment: WO 1^1 OAQO TITLE COMPANY .as^l-er.fiTREpT . 'BAN'plE^aGA.QaiOl ' j[«d)544ie341 fax; (619)544^75 (§) .':iBosie]^[0rnB . jrrUg.OFITCBR Escrow Oepartment: CHICAQO TITLE COMPANY 3703 CAMINO DEL RIO SOUTH SUITE 100 SAN DIEGO. CA9210Q {619) 28^^ W (619) 2B2-5201 J. Gray/J. Schrum ESCROW: OFFICER ri\ui»rr irt/MWi/M. ilti I 11 Ul lUMAL l-AKIftciXi SCH.EDUi*fi T-826 p.04/08 F-625 Vour Ref: POP, CARIiSBAD S&fi 1. Thc estate or interest in the land bereiaafter de&uibod or referred to covered by this roport is: • % •13.-.TiUe'to sJLi eatlaie or iaterest at the date hereof is vested in: 'paip CARtSBAO 5S27ZORS LTD. ZZ, k CALIFOIUriA LZMITED PARTNES^IP I ; , 3. The land rpforred tain this report is situated !n tbe State of California, Caunty of SAN OZEGO '.unil is described aa foUowi: '•"hOfs 14, ^S, 2,$, 17 AND IS OF SCRHLL AND SIT&5 ADDITION TO CARLSBAD, ZN THE . CTirc QP CJ^S^AD, COUVTY 0? SAN DXBGO, State California, ACCORDING TO MAP I- -'Sjmt3Q?'-SK), 2;L45, ?IIIBD IN'TH£ OPFICS OF THB COilNTY-PJICORDBR CP SAN DISGO COUNTV; .F|BRuj^Y 20, 1929. ' Pnl \ •• r 11 «t. «i I J 3 a 1-0^0 K.Uti/Od F-525 rXfiED'uLE B No:- :203Q4a009 1716 Your Rof: PGP CARLSBAD 6BS -. '. tbo'datc ^fireof exceptions to ooverage in addition to tbe printed Exceptions and Exdusions in the policy - ' form fiesigaated on the foce page of Uus Raport would be as follows: •' A X. PROPERTY-TAXES, INCDtJDlNG ANY PBRSCKAL PRQPERTY TAXES AND ANY ASSBSSMBNTS •COLLECTED WITH TAXES, POR THE FISCAL YEAR 1999-2000. /. •\ • i ... • fl*. .f.' ISt INSTALLMENT: 2ND INSTALLMENT: .PENALTY AND COST: BOMEOMNBRB B^^SM^TION: CODS AREA: ASSB^SMBNT NO: $13,75S,2S (PAID) S15,IBS.26 ?1, 585.53 (DUE AFTER APRIL lO) SNONE 09096 203-202-19 •2'.--TEE; LIEN OF SUPPLEMENTAL TAXBS, XF ANY, ASSESSED PtTRSUANT TO TKE PROVISIONS OF CHAPTER 3.5 (COMMENCING WITH SECTION 75} OF THE RSVENC3E AND TAXATION CODE OF THB STATB OF CALIFORNIA, 3 : TKE ?ACT TBAT SAID LAND LIES WITHIN THS VILLAGE ARBA RBDEVBLOPKENT PLAN • IPQK'TSS CITY OF CAITLSBAD AS DISCLOSED BY DOCtmSNT RBCOROSD ADGtJST 17. ' IS'81 AS FILE NO. B1-26182S, AGRSEMENT REGARDING AGREEMENT TO PAY FEBa FOR FACILITIES AND II^ROVSMENTS AS REQUIRED BY GROWTH MANAGEMENT SVSTEM, MADS BY AND BETWEEN THE 'CITY OF CARLSSAD, CALIFORNIA, A MUNICIPAL CORPORATION, AND OSFFERSON !HOUE2 II. A PARTNERSHIP, RECORDED'NOVEMBER IS, I9a^ AS FILS ND. d6-.530a24, OFFICIAL RECORDS. S.. AN AORESMSNT REGARDING AGREEMENT TO FAY FEES FOR FACILITIES AND ' i«4PRaVEMENTS AS REQUIRED BY GROWTH MANAGEMENT SYSTEM, MADE BY AND BETWEEN .."THS CtTY OF CARLSBAD, CALIFORNIA, A MUNICIPAL CORPORATION AND JEFFERSON . HOUSE II, a General Parcnership RECORDED MAY 13, 1937 AS FILE NO. 87-262386, OFFICIAL RECORDS. REFERENCE IS MADB TO SAID DOCUMENT FOR FULL PARTICULARS. 6-. A DEED QF TRUST TO SECURE AN INDEBTEDNESS IN THE ORIGINAL AMOOET SHOWN' •. l^BLOW AMaUNT: 'DATED: 'TRUSTOR: TRUSTEE: ;BSKEFZCIARY; R9C0QU3ED' $1,900,000.00 NOVEMBER 2, 1988' JEFFBftaoN HOUSE XI, a California General Partnership COABT FBD BBRVICBS, a Corporation COAST SAViNGE' ANtjl LOAN ASSOCIATION, a Cazporacipn NOVEMBER 18, 1966 AS FILE NO. Se-5937a7« OFFICIAL RECORDS •060 r.uo/uo •'brde^JWoi. 'ao.3048c09 ui6 (contixiued) YpurKef: PGP CABLSBAD SRE * • \ AN ASSIGNMENT OF THE BENEFICIAL INTEREST UNDER SAID DEED OF TRUST WHICH •NAMES AS ASSIGNEE: .RBC0PJ3BD: Federal National Mortgage Asaoaiation nacamber 2S, 1990 AS FILE NO. SS3922, OFFZGZAL RECORDS ' '{t '-7, AN. ASSIGNMENT OF ALL .THE MONEYS DUE, OR TO BECOME DUB .AS RENTAL, AS ADDITIONAL ESCURITY PQR THE OBLIGATION SECURED BY DEED QF TRUST RECORDED; ASSIGNMENT TOi BY ASSIGNMENT RECORDED: NOVEMBER 18, 1986 AS FILE NQ. 88-593787, OFFICIAL RECORDS COAST SAVINGS AND LOAN ASSOCIATION NOVEMBER ift, 19B8 AS FILE NO. 88-593799, OFFICIAL RECORDS ' .'V '•• " • A DEED OP TRUST TO SECITRE AN INDEBTEDNESS IN THB ORIGINAL AMOUNT SHOWN BELOW .AMOUNT; DATED; TRbs.TOR: TRUSTEE: .BENEFICIARY: RECORDED: $1,573,392.00 FEERUARY S, 1991 PGP CARLSBAD SENIORS LTD. II, a Califortlia Limited Partnership SMS TRUST DEED SERVICE'. A California Corporation THE CITY OF CARLSBAD • MARCH 21. 1951 AS FILE NO. 91''123873, OFFICIAL RECORDS $. A j:iBSD OF TRUST TO SECURE AN INDEBTEDNESS IN THE ORIGINAL AMOUNT SHOWN - BBLOW ^ ! •. • AMOUNT: DATED: TRtTSTOR: TRUSTEE: BENEFICIARY: RECORDED t $550,000.00 •MARCH. 18, 1991 PGP CARLSBAD SENIORS LTD. II, a California Liinited Partnership SMS TRUST DEED SERVICE, A Califomia Corporation JEFFERSON HOUSE II, a California General Partnerahip MARCH 21. 1991 AS FILS NO. 91-0123874, OFPICIAL RECORDS ..K SAID DBBD OF TRUST RECITES THAT IT IS SUBORDINATE TO TBE DEED OF TRUST i-oio rur/Ob F-625 SCHEDULE B : 3 ^ (continiied) '••.il^derKb:' 2030.48009 UIS Your.R«f; PGP CARLSBAD SRS ' i^ 1.1 i'l • 11 i. I I • I " .• •• RECORDED CONCURRENTLY THEREWITH. u ' 10. A PINANCIN13 STATBMENT FILED IN THE OFFICE OF THE COUNTY RECORDER, SHOWING DEBTOR: PGP CARLSBAD SENIORS, LTD II,- ; ' . • A CALIFORNIA PARTNERSHIP ' ' .SECURED PARTY: COAST FEDERAL BANK HmCdRDED.f MARCH 21, 1991 AS FILE NO. 91-0123876. OFFICIAL RECORDS . .Y' . '11.. MATTERS WHICH MAY BB DISCLOSED BY AN INSPECTION QR SURVEY OF SAID LAND QR • - -BY 'INQUIRY OF THE PARTIES IN POSSESSION THEREOF. I • >• :i- ' 12. 'RiCOHTS OF PARTIES 71? POSSESSION OF SAID LAND. IMATTBR'S AFFECTING THB RIGHTS OP SAID PARTIES ARE NOT SHOWN HEREIN. .'o.'' sENti OF SCHEDULE B . .'•'*• ' • ' . :/'p' \ NOTE NO. i: YOUR OPEN ORDER REQUEST INDICATES THAT A LIMITED PARTNERSHIP WILL BB ACQUIRING. ENCUMBERING OR CONVEYING REAL PROPBRTY IN YOUR . TRANSACTION. UNDER TKB PROVISIONS OF '<TKB CALIFORNIA REVISED LIMITED - 'PARTNERSHIP ACT", EFFECTIVB JULY 1, 1964. THB FOLLOWING WILL SB REQUIRED: (.1) A CERTIFICATS, IN CONFORMITY WITH THE NEW ACT, MUST BE FILED WITH THE SECRETARY OF STATS AND A CERTIFIED COPY THEREOF RECORDED IN THE OFFICB OF THS SAN DIEGO COUNTY RECOROBR. (2) TKB REQUIREMENT THAT THIS COKPANY BE FURNISHED WITH A COMPLETE COPY QF THB LIMITED PARTNERSHIP AGRBEMBNT AND ANY AMENDMENTS ' THERETO FOR OOS REVIEW, AT LEAST TWO WEEKS PRIOR TO CLOSING. (3} IF THE LIMITED PARTNERSHIP WAS FORMED OUTSIDE OF THS STATE OF CALIFORNIA, PLEASE CONTACT THE TITLE OFFICER FOR QUR REQUIREMENTS. . Q ' . . NOTBe .IF THIS COMPANY IS 'RBQtTESTED TO DISBURSE FUNDS IN CONNBCTZON WITH THIS TRANSACTION, CHAPTER 598, STATUTES OF 1989 MANDATES HOLD PERIODS FOR CHECKS .pSPOSITED TO ESCROW OR• SUB-ESCROW ACCOUNTS. THE MANDATORY HOLD , . .PERIOD'FOR CASHIER'S CHECKS, CERTIFIED CHECKS AND TELLER'S CHECKS XS ONE BUSINESS DAY AFTER THB DAY DEPOSITED. OTHER CHECKS REQUIRE A HOLD PERIOD FROM-THREE TO SEVEN BUSINBSa DAYS ASTER THB DAY DEPOSITED. • NOTB 9 ANY FUNDING WIRES TO CHICAGO TLTLS COMPANY COMMERCIAL/INDUSTRIAL ' 'ESCROW ARE TQ BE DIRECTED AS FOLLOWS t VmCOS BANK • ' . ' ' 200*1 .MICB^ON DltrVE ' I^VlNE^ CALIFORNIA 92714 # V ^ I w <«i 9 i-oio t-.uo/Uo p-625 '. '. fPfiloJNp: . 2.03048009 U15 (continued) Your Ref: PGP CARLSBAD SRS ABA'122 000 496 CREDIT TO CHICAGO TITLE ESCROW- ACCOUNT NO. 91002-67494 FURT3BR CREDIT TO ESCROW NO: 203046009 -N77 CUSTOMER NAMEt CHICAGO TITLE/SAN DIEGO ATTN; SL JOYCE GRAY ESCROW OFFICER Financial InstiHraonal Partners iVIortgage^ompany, LP Property Address:^^S'> f- fa^^r^ ^ CI\Q.-L-^':J 5 r\ 6^ Total No. of Units: No. of Vacant Units: No. of Furnished: No. of Section 8 Units /5 Apt. No. Tenant's Name Bdr/Ba Sq. Ft. Current Rent Move in Date Last Increase Furn/ Vac. Sec 8 Rent Concessions 1=2 'tr7s-'{*^-j^rz-^')rf."4 rj*!?! f^yn-'"jM-? i.:t^.-..- -^r-'V,. v;>,r;i r^, Monthly Rent Schedule $ 'iQj^b^ Monthly Laundry Income $ ^ ^A" Monthly Garage Income $ * Other i Other What utilities are included in rents? ^ Water • Gas • Electricity • Heat GarbageCable TV Is property subject to rent control? • Ves No If so, what is the allowable increase per annum? Gross Monthly Income $ ZTI Average monthly occupancy over the preceding 12 months 97 % I certify under the penalty of perjury that the information herein is true and correct as * / DATE SELLER DATE Real Eslale Broker, Califorma Dept. of Real Estale-Lic. No. 01237257 DRE Ucense informalion telephone no. (916) 227-0931 FIPMC-W4-(Rev. 9/98) Capital Growth Properties, Inc. Rent Roll 3i38 pm Page < 1 SENIORS II Total Occupied Rents 37,320,00 Total Vacant Rents 1.540.00 Total Gross Rents 38,860,00 Total Square Footage 29340 Average Rent/Sq. Ft. /Yr. 15.89 Average Rent/Sq. Ft. /Mth 1.32 Total Security Deposits 18,380.00 — Percentage oC Occupied Units — Total Occupied Units 55 Total Vacant Units 2 Total Units 57 Percentage Occupied 96% — Percentage of Occupied Sq, Feet - Total Occupied Sq. Feet 28220 Total Vacant Sq. Feet 1120 Total Square Footage 29340 Percentage Occupied 96% Unit Rent Per Lease Lease Reference Monthly Square Square Starting Exp. Deposits Nuinber Name Rent Feet Foot Date Date Held 160-102 Storm, Joseph 675 00 500 16.20/yr 2/04/97 6/30/00 300,00 160-103 Brooks, William 655 00 soo 15.72/yr 12/01/97 4/30/00 300.00 160-104 Young, Evelyn 650 00 500 15.60/yr 2/20/99 2/19/00 300.00 160-105 Gaylo, Ann 700 00 500 16,80/yr 10/01/99 10/31/00 300.00 (60-106 Stare. Elizabeth 700 00 500 16.80/yr 3/20/95 12/31/00 300.00 (60-107 Segein, Florence 665 00 500 15.96/yr 10/06/97 10/31/00 300.00 (60-108 Grodowsky, Elizabeth *8 640 00 500 15.36/yr 6/01/90 5/31/00 450.00 (60-109 Gilbert. Wilburn 675 00 500 16.20/yr 2/04/99 2/03/00 300.00 460-110 Ladermeier, Hary 855 00 620 16.55/yr 7/01/98 7/31/00 300.00 460-111 Camacho, George 615 00 500 14.76/yr 5/10/97 12/31/99 300.00 (60-112 Kaplan, Diane 655 00 500 15.72/yr 8/13/98 8/31/00 300.00 (60-201 Shively, Ludella •& 640 00 500 lS,36/yr 5/02/91 4/30/00 450.00 (60-202 Dui^ilney, Randall 640 00 500 15,36/yr 2/01/98 2/28/00 300.00 (60-203 HcCausland, Mary Ellen 665 00 500 l5,96/yr 5/22/96 9/09/00 300.00 460-204 Wheeler, Henry 875 00 620 16.94/yr 2/03/92 300.00 460-205 Smith, Betty 675 00 500 16,20/yr 3/22/99 3/21/00 300.00 460-206 Smith. Marlon •8 665 00 500 15,96/yr 5/01/94 10/31/00 300.00 460-207 Buth, Bette Watson 665 00 500 15,96/yr 3/01/97 10/31/00 300.00 460-208 Hoffman, Audrey *8 675 00 SOO 16,20/yr 1/01/99 12/31/00 450.00 460-209 Root, Judy 850 00 620 16.45/yr 8/01/96 3/31/00 300,00 460-210 Lucklow, William 665 00 SOO lS.96/yr 10/24/96 9/30/00 300.00 460-211 Leahy, Edith R. *8 615 00 500 14,76/yr 12/07/95 11/30/99 300,00 460-212 Wilson, Laretta •8 640 00 500 15,36/yr 2/01/96 3/31/00 300.00 460-213 Matthews, Mary •8 615 00 500 14,76/yr 9/18/95 2/28/00 300.00 460-214 Stone, Joanne 675 00 500 16.20/yr 3/20/99 3/19/00 300.00 460-215 Murphy, Dorothy 640 00 500 15.36/yr 4/04/98 3/31/00 300.00 460-216 VACANT 875 00 620 16.94/yr 0.00 460-217 Emry, Lily *8 635 00 500 15.24/yr 9/25/96 3/08/00 300.00 460-218 Elsenman, Sanford 675 00 500 16.20/yr 1/17/97 300.00 460-219 Sweet, Shirley 665 00 500 15.96/yr 7/01/93 8/31/00 300.00 460-220 LaBrada. Lucile 665 00 500 15.96/yr 8/01/90 8/31/00 450.00 460-221 Van Slyke, Beverly 875 00 620 16,94/yr 6/18/97 8/31/00 300.00 460-222 Levine. Marlon •8 655 00 500 15,72/yr 12/01/90 6/30/00 450.00 460-223 Bush, Joanne 665 00 500 15,96/yr 11/17/95 10/31/00 300.00 460-301 Stiles, David 665 00 500 15.96/yr 7/01/96 9/30/00 300.00 460-302 Bloom, Tom 665 00 500 15.96/yr 7/01/88 9/30/00 465.00 460-303 Andryslak, Helen 675 00 500 16.20/yr 6/01/92 600.00 460-304 Beckman, Kathryn 665 00 500 15,96/yr '5/01/96 10/31/00 300.00 460-305 Matlock, Dorothy 665 00 500 15.96/yr 3/01/98 9/30/00 300,00 460-306 Webb, Louis 665 00 500 15,96/yr 6/27/95 10/31/00 300.00 460-307 Hawley, Patricia *8 655 00 500 15.72/yr 9/06/97 4/30/00 300,00 460-308 Mancuso, Phyllis '8 665 00 500 15.96/yr 12/12/88 12/31/00 200.00 460-309 Myers, Clifford 875 00 620 16.94/yr 7/01/94 9/30/00 300,00 460-310 Amnerman, Paul 665 00 500 15.96/yr 3/09/97 8/31/00 600.00 460-311 McElhaney, Hazel 665 ,00 500 15.96/yr 10/24/98 4/30/00 300.00 460-312 Roth, Carol 675 .00 500 16.20/yr 6/07/99 6/06/00 300.00 460-313 Stewart, Betty 640 00 500 15,36/yr 2/01/98 2/28/00 300.00 460-314 VACANT 665 00 500 15,96/yr 0,00 460-315 Betteridge, Geraldine 700 00 500 16,80/yr 10/01/99 9/30/00 300.00 460-316 Swlnton, Daniel 875 00 620 16.94/yr 6/15/92 2/28/00 300.00 460-317 Kissinger, Francises 675 00 500 16.20/yr 3/01/99 2/28/00 300,00 460-318 Haslum, Irene *8 675 00 500 16,20/yr 3/01/92 2/28/00 300,00 460 319 Braegger, Margaret 640 00 500 15,36/yr 12/04/91 3/31/00 450.00 460-320 Patten, Elaine *B 640 00 500 15,36/yr 2/05/89 4/30/00 465.00 460-321 Carpenter, Karen **Mgr** 400 00 500 9.60/yr 4/01/98 300.00 460-322 Sprentall, Thomas 700 00 500 16.80/yr 9/18/99 8/17/00 300.00 460-323 Nann, Marion *8 655 00 500 15,72/yr 7/01/91 6/30/00 450.00 Financial InstitAonal Partners Mortgage^ompany, LP Property Address: No. of Months Rental Income Collected Laundry Income Garage Income Other Income Total Income Collected Int. & Ext. Decorating Cleaning/Turnover Supplies Elevator Pool Maintenance Parking Maintenance Gardening/Landscape Nonresident Manager Res. Manager Salary Res. Mgr. Apt. Allow. Custodian Salary Custodian Apt. Ailow. Other Salaries Security Benefits Payroll Taxes Advertising Telephone Legal and Audit Office Expenses Misc. Administrative Appliances Carpeting Roof Other: (Attach Detail) Total Expense I certify under penalty of perjury that the information herein is true and correct as of SELLER DATE Real Estate Broker, Califomia Dept. of Real Estate-Lie. No. 01237257 DRE license informalion telephone no. (916) 227-0931 FIPMC-l03-(Rev. 9/98) Carlsbad Seniors II Income Statement JANUARY THROUGH NOVEMBER 1999 CURRENT PERIOD PERCENT YEAR TO DATE PERCENT INCOME Rental Tenant Fees Laundry Vending Sec Dep Forfeitures Interest income TOTAL INCOME OPERATING EXPENSES Accounting/Legal Appraisal Fee * Association Dues Credit Verification Elevator Insurance Landscaping Lease Commissions Partnership Management Partnership Admin, Exp, Property Management Permits Licenses Property Taxes State Taxes Resident Management Resident Management Misc. Tenant Relations Office Phone/Usable Supp, Office Equipment fc Improv Apartment Electric Gas fc Electric Television Cable Trash Removal Water Sewage Maintenance fc Repair Air Conditioning/Heater Apt. Repairs Appliance Repairs Common Area Maintenance Flooring Window Coverings Total Maintenance/Repair Maintenance Replacements New A/C fc Heaters New Appliances Common Area Items New Flooring New Window Coverings Maintenance Equipment Total Maint. Replacements TOTAL OPERATING EXPENSES NET OPERATING INCOME Interest Expense OPERATING INCOME $ 37.982 ,00 97 .87 $ 402,833 .97 97 .71 20.00 0 .05 417 .25 0 .10 0 ,00 0 .00 4.553 .25 1 . 10 300 .00 0 ,77 1,352 .89 0 .33 507.97 1 ,31 3,113 .74 0 .76 38,809 .97 100 ,00 412,271 .10 100 .00 0 .00 0 .00 2,737 .76 0 .66 0 .00 0 ,00 2,500 .00 0 .61 0 .00 0 ,00 247 .95 0 ,06 0 .00 0 ,00 262 .00 0 .06 155 81 0 40 2,215 95 0 S4 0 .00 0 00 4,604 65 1 ,12 360 .00 0 ,93 3,788 ,11 0 ,92 231 .45 0 60 1,335 ,05 0 .32 335 00 0 86 3,870 57 0 .94 0 ,00 0 ,00 750 .00 0 . 18 1,695 ,00 4 ,37 19,452 ,84 4 .72 0 ,00 0 .00 215 .00 0 ,05 15,755 .26 40 ,60 29,441 .88 7 . 14 0 .00 0 ,00 800 .00 0 . 19 1,533 .84 3 ,95 17,168 .35 4 . 16 199 .99 0 ,52 1,920 65 0 .47 18 .29 0 ,05 803 42 0 . 19 72 .70 0 ,19 1,483 .74 0 .36 0 .00 0 00 100 42 0 .02 7 .52 0 .02 86 ,76 0 .02 0 .00 0 00 9,855 49 2 . 39 36 .82 0 ,09 397 06 0 . 10 199 46 0 .51 2,194 06 0 .53 650 65 1 .68 6, 177 ,09 1 .50 680 10 1 75 6,488 81 1 .57 0 .00 0 ,00 191 .46 0 .05 1.354 31 3 ,49 6.569 ,73 1 .59 0 .00 0 .00 389 ,83 0 .09 117 .27 0.30 3,496 .24 0 .85 0 .00 0 .00 431 00 0 . 10 0 ,00 0 ,00 39 .09 0 .01 $ 1,471, 58 3. 79 $ 11,117, 35 2 . 70 0. 00 0. 00 209, 49 0. 05 116. 56 0. 30 2,789, 71 0. 68 126. 03 0. 32 1,207, 50 0. 29 1,303. 40 3, 36 5,279, 14 1 28 0. 00 0. 00 354.47 0. 09 0. 00 0. 00 68. 92 0. 02 1.545. 99 3. 98 9,909. 23 2. 40 24,949, 46 64.29 139,924. 19 33 . 94 13,860.51 35. 71 272.346.91 66. 06 13.954. 25 35. 96 155,207. 26 37. 65 (93. 74) 0. 24 117,139. 65 28. 41 OTHER EXPENSES Carlsbad Sanlors II Laat Taar Caspar i ton Raport Oacaabar 31, 1998 CURR. UST YEAR CURRENT ACTUAL VARIANCE P6RCNT TTO LAST YEAR YTO ACTUAL VARIANCE PEROfT cal t Faaa ndry A Vanding laccion IncoM Oap Forfalcuraa araae Incona FAL INCOME IATIH6 EXPENSES eountlng/Lagal vartising < sociacion Ouas adic Varifieacion avacor •uranca mdacaping »aaa Coaaiissiona trtntrship NanaeMint 'oparty Managaaant rnaica 4 Lfeansas 'oparcy Taxaa caca Taxaa nidanc Managaaanc Bsidanc Managaaant Nisc. -*>pUaa mane Ralacions anagar Talaphona/Offtea parcawic Elactric aa & Elaccric al avision' Cabla raah Raanval acar ^cwaga lincananca i Rapair ir Condicioning/HaaCar pc. Rapairs pplianca Rapaira osnon Araa Maincananea rapas/CarpaCs acal Maincananca/Rapair 3TAL OPERATING EXPENSES £T OPERATING INCOME iceresc Expense DERATING INCOME HER EXPENSES tp. Exp. Building «p. Exp. HalIMay Carpac ep. Exp. Laundry Equip, aic. Exp. Loan Faa * Ist 3TAL OTHER EXPENSES 3TAL Expenses ET INCOME S 30.119 S 34,031 % 3,912 13 S 367,696 S 396.584 S 28.888 8 0 0 0 290 265 (25) (9) 0 0 0 2,942 4.514 1.572 S3 0 0 0 103 0 (103) (100) 0 0 0 •** 2,021 1.658 (363) (18) S31 428 C103) (19) 3.730 3.410 (320) (9) 30,650 34,459 3,809 12 376,782 406.431 29.649 8 0 0 0 *•« 1,725 1,686 39 2 8 0 8 100 129 264 (135) (105) 0 0 0 177 219 (42) (24) 0 0 0 262 120 142 54 152 158 (6) (4) 1.794 1,949 (155) (9) 0 0 0 **« 4,898 3.952 946 19 755 300 455 60 3.835 4.501 (666) (17) 0 83 (83) •tr* 781 1,270 (489) (63) 342 495 (153) (45) 3,768 4,064 (296) (8) 1,468 2,475 (787) (47) 18.839 20,322 (1,483) (8) 12S 110 15 12 455 440 15 3 0 0 0 **« 28.012 27,405 607 2 0 0 0 800 800 0 0 1,446 1,616 (ISO) (10) 16.124 18,819 (2,695) (17) 210 226 (16) (8) 1.993 2,190 (197) (10) 2 0 2 100 107 475 (368) (344) 0 62 (62) 112 467 (355) (317) 113 99 14 12 1.357 1.596 (239) (18) 13 10 3 23 (80) 85 (165) (206) 999 1,054 (55) (6) 10.855 9,632 L223 11 0 35 (35) 338 408 (70) (21) 199 399 (200) (101) 2.194 2,593 (399) (18) 624 524 100 16 5.887 6,995 (1,108) (19) 677 561 116 17 6.536 7.520 (984) (15) 0 5 (5) •«« 391 5 386 99 3n 173 200 54 5.999 7.849 (1,850) (31) 534 33 501 94 3.261 2.470 791 24 57 1,319 (1,262) (999) 4.684 4,985 (301) (6) 628 111 517 82 7.326 2.57Q 4.756 65 S 1,592 % 1,641 S (49) (3) % 21.661 S 17,879 % 3.782 17 8,965 9,848 (883) (10) 132.559 135,651 (3.092) (2) 21,685 24,611 2,926 13 ' 244,223 270,780 26,557 11 14,962 14,641 321 2 • 179,204 177.667 1.537 1 6.7Z3 9,970 3,247 48 65.019 93,113 28.094 43 7,463 7.463 0 0 89.556 89,556 0 0 0 275 (275) •itm 0 1.374 (1.374) 500 141 359 72 1.059 1,694 (635) (60) 92 92 0 0 1.108 1.108 0 0 8,055 7,971 84 1 91.723 93.732 (2.009) (2) 31.982 32.460 (478) (1) 403.486 407,050 (3,564) (1) C1.332) 1,999 3,331 250 (26,704) (619) 26,085 98 Financial lnstit^a||)nal Partners Mortgage ^mpany, LP Environinental Questionnaire Applicant, as identified below, has applied for a loan from FIPMC to be secured by a Deed of Trust or, Mortgage ("Security Instrument") on the real property. As a condition of Lender's consideration of the loan request, Lender requires that Appiicant complete this Questionnaire. Applicant acknowledges that Lender will rely upon the responses to this Questionnaire in connection with Lender's analysis of this loan request. Applicant represents to the Lender that the answers provided to the questions are to the best of Applicants' knowledge. Applicant agrees that Lender may provide a copy ofthe completed Qticstionnnirc lo any environmental consultant who, on behalf of Lender, performs an environmental assessment ofthe Property in connection wilh thc requested loan and lhat such consultant may rely on Applicant's responses. Applicant: /^^^ AD S^"^^-/ LT«C^ TL, Property Address The present owner of (s) of the property is: J-^ P ir^^-1 ^ o At^ ) The present occupant(s) of the property is: (Please attach rent roll if there are multiple tenants) ion^^^^ ^^^^}of lot ^2jOOQ Sq ft. Building to Lot coverage ^^^^ % Year of construction Tlie present use(s) of the adjacent properties are: ^pt^Office • Retail • Industrial Other:^-"^ P O'r»U-T < n L. • Automotive • R&D Has the property or any adjacent property been used for industrial, manufacturing, refining or processing purposes? If so, please describe: ho^-^-X 'XO ^ ^ "i ^ j k!-^ O ^ "^2. Q GC Has the property been leased to commercial tenants who may have used toxic chemicals (dry cleaner, print shop, service station, etc.)? • Yes ^KiNo Describe: -rr.. . ._.^^^....,„_,.^.^,... ... „ "T'Tp."''?^ r'lTT . y:T-'r7pr^'^jn''Tjn'JJTWpi"--;r;rr'',>• Past Owner from to '9; Use "^^'^"-^ \ ^ ' ^ ^ '('^ 3 Past Owner U CVAV^^ Use from to Past Owner Use from to Arc there or have there been electrical transformers, capacitors, or hydraulic equipnient poieniially containing PCRs on ihc properly? • Yes • No ^^^^^aCojnknown Description and Location: Is there evidence of leakage on or around this equipment? • Yes • No ^^^::eQjnknown Description: Has Percholoroethylene ("PCE") been used as a solvent in dry cleaning or for removal of grease from metals? • Yes • No '^>gCynknown Real Eslale Broker, California DepI. of Real Eslale-Llc. No. 01237257 DRE llcen.fe Information telephone no. (916) 227-0931 FlPMC'l07.(Rev. 9/98) Financial Instit^u^nal Partners Mortgage ^^mpany, LP Are any above or below ground gasoline, diesel, waste, or heating oil or olher storage lank.s located on thc property? • Yes • No ^^I^^Unknown Description and location: Have any tanks been inspected or tested for leakage? If so, please attach the results. • Yes • No .^C^Unknown • Inspection or test rcsults are attached Are any tanks known to leaked in the past? • Yes • No .^^ti^nknown Description: Are any chemicals stored on the property in drums or other containers? • Yes • No .^^^nknown Description of types and quantities stored: Are any drums or other containers known to leak now or to have leaked in the past? • Yes • No ^J^nknown Description: Is there evidence of the following conditions on the property or neighboring sites: stressed vegetation, stained soil, foul fumes or smells, oily ponds, etc.? • Yes • No ^^^^^I^nknown Description: Do any buildings of other improvements on the property contain asbestos? • Yes • No Jjd^Unknown Description: Has any asbestos survey been conducted for the property? If so, please attach a copy. • Yes • No ^]]^0^Unknown Is there any visible or documented evidence of peeling paint on the fioors, walls, or ceilings of tenant or common areas? • Yes • No ^^^^Ji^Unknown Description: any lead-based survey been conducted for the property? If so, please attach a copy. • Yes • No ^)2lt^Unknown Is water for the property provided directly from a well? • Yes *^jaC^No • Unknown Describe all sources -df waste water discharges to surface waters, septic systems, leach fields or holding ponds. (Do not include conventional wane water discharge to city or county sewer systems). Description: O^'^-'-^gv, Real Fjlale Broker, California DepI. of Real Eslale-Lic. No. 01237257 DRE license Informalion telephone no. (916) 227-0931 FIPMC-l07.(Rev. 9/98) Financial Instittjgpnal Partners Mortgage ^mpany, LP Environmental Questionnaire (continued) Describe the types of liquid wastes (other than waste water as described above) and solid waste generated at the property. Description: _ Describe how the liquid and solid wastes generated at the property are disposed. Description: A \ ) JX Have pesticides, herbicides or other agricultural chemicals been applied to the properly? • Yes • No ^Unknown Description: Have pesticides, herbicides other agricultural chemicals ever been mixed, formulated, rinsed or disposed of on the property? • Yes • No "^Unknown Description: Has any public agency ever investigated or cited the property for violation ofany environmental law or commenced an enforcement or clean up action under environmental law with respect to the properly? • Yes • No "J3^L Description: JJnknown Has any public agency ever listed the property as a site requiring or qualifying for clean up under any environmental law? • Yes • No ^Unknown Description: Has any litigation proceeding been brought or threatened by any party alleging the presence, disposal, or threatened release ofany hazardous substances or petroleum products on, from, or under the property? • Yes • No ^^ylS^nknovfn Description: Please attach any permits from public agencies and complete copies of any test, study, report, or assessment which are required or have been completed with respect to the property's soil, air, or groundwater conditions or hazardous materials storage. Applicant represents and warrants: a. That, to the best of Applicant's knowledge. Applicant, its tenants and all others with rights relating to the use of all or any portion of the Property are currently in compliance with all federal, state, and local laws, rules, regulations and ordiiwnces, regulating, without limitation, air pollution, soil and water pollution, and the use, generation, storage treatment and removal, handling or disposal of hazardous or toxic substances or other materials. b. That, except as set forth in this Questionnaire, Applicant has no knowledge of any presence, disposal, release or threatened release of any hazardous or toxic materials on, from, or under the Property that has occurred in the past, either during the period that Applicant has had an interest in the Property or prior to such period of time. By executing this Environmental Questionnaire, Applicant agrees to be bound by thc representations and warranties set forth herein, and Appiicant certifies that the information provided herein is true and correct, to the best of Applicant's knowledge. APPLICANT APPLICANT By: TITl.l DATE DATE Real Estate Broker, California Dept. of Real Eslale-Uc. No. 01237257 DRE license information lelephone no. (916) 227-0931 FIPMC'l07-(Rev. 9/98) Loan Number: 4000443 Progressive Realty Advisors APPRAISER'S ENVIRONMENTAL CHECKLIST PROPERTY IDENTIFICATION Address: 2848 Jefferson Street Thomas Guide #: 1106-E5 City, State: Carlsbad, CA Zip Code: 92008 NEIGHBORHOOD INFORIVIATION Did you ol)serve any ofthe following present or former uses within the specified distances from the subject YES Gas Station (1/8 mile): Auto repair / Tune up / Dealer facility (1/8 mile): Dry cleaner / Hardware/ Paint store (1/8 mile): Main line or spur railroad track (1/8 mile): Oil / Gas well / Pump / Tank (1/2 mile): Oil refinery (1/2 mile): Industrial / Warehouse zoning or uses (1/2 mile): Truck / Tanker / Freight terminal (1/2 mile): Military installation(s) (1 mile): Airport (1 mile): Waste disposal site / Dump / Landfill (1 mile): ottier (1 mile): in the Vista report (if avaiiabie), would any ofthe indicated sites have a negative affect on market value? NO AJ SITE INFORMATION Did you observe any ofthe following characteristics for the subject/site? YES Zoned for industrial or commercial: | | Former gas station / Dry cleaner / Paint store: | | Former landfill site: | | Drums or containers with unknown contents within 100 feet: | | Dead batteries on unpaved area: [ j Foul odors from soil or water: I | Distressed / Discolored vegetation: Paints, solvents, acids & pesticides stored above normal household amounts: Leaking electrical transformer(s) within 50 ft.: Underground or above ground storage tanks: Does the subject have a private water well: other observations which could be evidence of a potential environmental hazard: NO I I CA DISTANCE 1 block 2 blocks 2 blocks west 2 blocks west UNKNOWN STRUCTURE INFORMATION: for properties built before 1979 Ifthe subject property contains the following Hems, does their condition show evidence of damage or disturbance? YES NO N/A Sprayed-on acoustical ceiling: | | | X | { AC / Heating duct insulation: | | | | | X Ceiling tiles | | | | j X Plaster or drywall walls / ceilings: | | | X | I Suspected exterior asbestos siding: | | | X | | For improvements built prior to 1978, is there evidence of peeling, peeling, chipping, chalking or cracking paint on interior or exterior | | | X | | exterior surfaces? EXPLAIN ANY RESPONSES MARKED ''YES" The subject is close to active Amtrak rail lines 2 blocks west of the property. There is a gas station and some automotive uses on Carlsbad Village Drive. The uses are typical ofthe area. VALUE MARKETABILITY If a potential hazard is on, or a hazardous site is in proximity to, the subject property, is the property value of similarly affected properties the Same As X or Less Than other properties in the area which are not similarly affected? HEALTH RISKS Name: Date: If a potential hazard is on, or hazardous site is in proximity to, the subject property, is the effect on marketability considered Minimal X_ or Substantial based on ^number of sales in the last six months of similarly affected properties in the area: Do you recommend further inspection by qualified Environmental Hazard Specialists due to any hazard presenting a possible immediate health risk? YES: NO: James J. Hardick Signatijre: January 24, 2000 License 002533 Z PRAAptLF 6/1/98 yi m Financial Institutional Partners Mortgage Company, LP Date: // ' Jim Hardick 31379 Corte Sonora Temecula, CA 92592 Re: Jefferson House II: 2848 Jefferson St., Carlsbad, CA 92008 Loan No.: 4000443 Dear Jim: This confinnation letter authorizes you to proceed immediately with the appraisal on the above referenced property for the Financial Institutional Partners Mortgage Company ("FIPMC"). The purpose of this appraisal is to estimate the fair market value of the project collateralizing this loan asset. The appraisal is to be a complete report (FHLB 71-A 8 page format for Multifamily loans less than $5,000,000, all other loans including commercial, and mixed use require a Complete Summary) by the above stated appraiser who also must personally inspect the subject. The appraisal must comply with the Unifonn Standards of Professional Appraisal Practice applicable to Federally regulated transactions. The appraisal must state the replacement cost ofthe property. Please initial and submit a signed copy with the completed appraisal. FIPMC requires that the appraisal state the following: 1. Reasonable marketing period for the project in its current condition. 2. The "as is" value should be based on the existing legal # of units. 3. The time period needed for the project to achieve a market occupancy; and 4. The value of the project upon stabilization or "as if stabilized value, taking into consideration any necessary rehabilitation costs. 5. Replacement cost value whether or not completing the cost approach. 6. Interior photos must be included 7. Must include a reconciliation of all sale and rent comps use in the report. 8. On refinance transactions, if any historical expense item has been higher than typical and forecasted at a lower amount, a detailed analysis ofthe expenses must be included in the report. li Financial Institutional Partners Mortgage Company, LP If the appraisal requires a discounted cash flow analysis, please do not exceed a five-year holding period. As discussed, the fee for this assignment is $1600.00 with the expected completion date of on or before 2 weeks Jan. 27, 2000 barring unforeseeable circumstances. You must personally inspect, complete and sign this appraisal. Payment will be processed upon the completion of the FIPMC's review of the appraisal, provided that FIPMC approves the appraisal. If this request is terminated by FIPMC prior to completion, your fee will be paid pro rata for time and materials. The following infonnation is enclosed to help you complete the appraisal: 1. Environmental disclosure. 2. Prelim. 3. Rent Roll . . » -^x^ 4. Operating expense —^ (jO^ ^' 0/ 5. ^jEscrow Instructions'''^>^ ^ /AQA i 6. Purchase uontract u^PpHcable) 7. Leases (if applicable) 8. Tax Bill 9. Termite Reports (if available) Upon completion ofthe appraisal, please send FOUR ORIGINAL REPORTS to: Wendy L. Hicks, Associate Processing Assistant Financial Institutional Partners Mortgage Company One Venture, Suite 300 Irvine, CA 92618 Telephone: (949) 585-7500, FAX: (949) 585-0151 For further information and inspection instructions, please contact: John Drummond 858-454-8857 In the process of completing this assignment, please notify me of your value conclusion as soon as possible. Please sign, date and retum a copy of this confinnation letter indicating acceptance ofthis assignment and the aforementioned terms. Since lib^ Associate Processing Assistant Accepted and Approved: Signature Date Firm 1) APN: County: Census: Map Pg: New Pg: Phone: Owner. Mail: PROPERTY INFORMATION Property: 2848 JEFFERSONST, CARLSBAO CA 92008-1754 C012 203-202-19-00 SAN DIEQO, CA Tax Rate Area: 09-098 179.00 Prop Tax: $27,373J24 13-F4 Delinq Tax Yr: 1108-E5 Exemptions: PGP CARLSBAD SENIORS LTD 11 1120 SILVERADO ST; LA JOLLA CA 92037-4524 C028 Use: APARTMENT Total Value: $2,585,000 LandVakje: $1,405,000 Imprv Value: $1,180,000 AssdYr: 1998 % Improved: 45% SALES INFORMATION IMPROVEMENTS Transfer Date: Sale Price/Type: Document #: Document Type: IstTD/Type: Finance: Junior TD: Lender: Seller: Titie Company: Transfer Info: «Parcels/Last Sale: LAST SALE PRIOR SALE 03/21/1991 08/08/1985 $3,283,000 CONFIRMED 123872 281380 PARTNERSHIP GRANT $1,573,300 $550,000 SELLER FIN JEFFERSON HOUSE II CHICAGO TffLE CO. SITE INFORMATION Improve Type: Zoning: County Use: BIdg Class: Flood Panel: 315 D 060285^2D Lot Size: Lot Area: Parking: Park Spaces: Site Influence: 300X140 42,000 CARPORT 29 Bldg/Liv Area: # Units: #Bklgs: # Stories: $/SF: Yrblt/Eff: Total Rms: Bedrms: Baths(F/H): Fireplace: Pool: Bsmt Area: Construct: Flooring: Air Cond: Heat Type: Quality: Condition: Style: Ottier Rooms: 29,210 57 3 $112.39 1989 1989 FRAME ELECTRIC BASEBOARD AVERAGE GOOD DEN;FAMILY ROOM;DINING ROOM;ENCLOSED PORCHlBONUS Phys Chars: SLAB FOUNDATION;WOOD FRAME;COMPOSmON SHINGLE TYPE;STUCCO EXTERIOR;CORRALS;PATIO; ROOF COVER;GABLE ROOF Legal: L18TR2145/L14THRU Comments: 670# CLUBHOUSErSENIORS ONLY";"JEFFERSON HOUSE ir @1996Win2Data 2000 Page: 1 of 1 Loan Number: 4000443 Progressive Realty Advisors QUALIFICATIONS OF JAMES J. HARDICK CURRENT EMPLOYMENT APPRAISAL BACKGROUND PREVIOUS EMPLOYMENT Progressive Realty Advisors 31379 Corte Sonora, Temecula, CA 92592 Phone:909-676-8691 Fax: 909-676-7234 Active in Real Estate Appraisal since 1984. Currently operating as an independent appraiser specializing in apartment property and retail shopping centers throughout California. October, 1992 to May, 1998 Washington Mutual Bank, 3292 So. Bristol, Santa Ana, California 714-850-2007 Vice President - Income Property Appraisal Manager Responsibilities include: Supervision of 23 employees within 3 district offices and 3 satellite offices throughout California; Production volume of over 1,200 appraisal reports (primarily apartments with 10% commercial/retail); Operating budget of $2.7 million; Preparation of department business plan, policies and procedures. Preparation of appraisals for apartment buildings. March, 1987 to September, 1992 Downey Savings and Loan, 7301 Jamboree Rd, Newport Beach Commercial Real Estate Appraiser - appraised a variety of commercial, retail, industrial and subdivision property. Primary focus was in the appraisal of retail shopping centers throughout the state of California. INDUSTRY RELATED COURSES COMPLETED Appraisal Institute - Course 550 Advanced Applications '98 Appraisal Institute - Course 520 Highest & Best Use, 1994 Advanced R.E. Appraisal - Saddleback College, 1991 Uniform Standards of Professional Appraisal Practice - Irvine Valley College, 1991 Society of R.E. Appraisers-Prof. Practice Seminar, 1989 Society of R.E. Appraisers - Course 201,1989 Society of R.E. Appraisers - Course 102,1988 Society of R.E. Appraisers - Course 101,1988 R.E. Legal Aspects - R.E. Trainers, Inc., 1989 R.E. Finance - R.E. Trainers, Inc., 1988 R.E. Practice - R.E. Trainers, Inc., 1987 R.E. Principles - R.E. Trainers, Inc., 1986 R.E. Appraisal - Coastline Community College, 1983 PROFESSIONAL AFFILIATIONS California Certified General R.E. Appraiser # AG002533 Foundation of Real Estate Appraisers - #13055 APPRAISAL EXPERIENCE Residential: Single-family residence, condominiums, apartments, residential subdivisions, mobile home parks Commerciai/lndustrial: Shopping centers, office buildings, light industrial, vacant land, leasehold estates GEOGRAPHIC COVERAGE All of California - primarily Los Angeles, Orange, San Bernardino, Ventura, Riverside, San Diego, PRAAptLF 6/1/98 Loan Number: 4000443 Progressive Realty Advisors FRONT VIEW OF SUBJECT PROPERTY AT: 2848 Jefferson St-eet Carisbad REAR VIEW OF SUBJECT PROPERTY STREET SCENE VIEWING SOUTH PRAAptLF 6/1/98 Loan Number: 4000443 Progressive Realty Advisors r ? tklllllh |uut> 4 Ji ^ FRONT ENTRY NORTH SIDE OF THE BUILDING ALONG HOME STREET SOUTH SIDE OF THE BUILDING PRA AptLF 6/1/98 Loan Number: 4000443 Progressive Realty Advisors INTERIOR COURTYARD UPPER LEVEL WALKWAYS STREET SCENE VIEWING NORTH PRAAptLF 6/1/98 Progressive Realty Advisors Loan Number: 4000443 TYPICAL KITCHEN TYPICAL BATHROOM TYPICAL LIVING AREA PRAAptLF 6/1/98 Loan Number: 4000443 Progr^ive Realty Advisors RECREATION ROOM UPPER LEVEL HALLWAYS TYPICAL STAIRWELL PRA/VptLF 6/1/98 Loan Number: 4000443 Progressive Realty Advisors LAUNDRY ROOM RAYPACK BOILER ELECTRICAL ROOM PRA AptLF 6/1/98 Loan Number: 4000443 Progressive Realty Advisors Comparable Rental #1 3090 Jefferson Sti-eet Carisbad Comparable Rental #2 1003 Chinquapin Avenue Carisbad Comparable Rental #3 3363 Tyler Sti-eet Carisbad PRA AptLF 6/1/98 Loan Number: 4000443 ProgreSive Realty Advisors Comparable Rental #4 960 Vine Sti-eet Oceanside Comparable Rental #5 2585 Jefferson Street Carisbad Comparable Rental #6 2825 Hope Avenue Carisbad PRA AptLF 6/1/98 Loan Number: 4000443 ProgreSive Realty Advisors \ Comparable Sale #1 3363 Tyler Street Carisbad Comparable Sale #2 1050 Essex Sti-eet San Diego Comparable Sale #3 5330 Orange Avenue San Diego PRA AptLF 6/1/98 Loan Number: 4000443 Progressive Realty Advisors Comparable Sale #4 3604 Georgia Street San Diego Comparable Sale #5 355-395 Pine Avenue Carisbad Comparable Sale #6 1000 Chinquapin Avenue Carlsbad PRAAptLF 6/1/98