Commercial Property Appraisal
Property Summary
Intended Use: This appraisal is prepared for lending purposes in connection with a refinancing transaction.
Property Rights Appraised: Fee simple estate
Scope of Work
This appraisal was conducted in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP). The scope included:
- Physical inspection of the subject property (interior and exterior)
- Review of property tax records, zoning documentation, and title report
- Market analysis of comparable industrial properties within 5-mile radius
- Income and expense analysis based on owner-provided operating statements
- Highest and best use analysis
Approaches to value employed: Sales Comparison Approach and Income Capitalization Approach. Cost Approach was not developed given the property's age and active market.
Sales Comparison Approach
Five comparable warehouse sales were identified within the Inland Empire market, adjusted for differences in size, age, location, and condition:
| Comparable | Address | Sale Date | Size (sq ft) | Price/sq ft | Adjusted |
|---|---|---|---|---|---|
| Comp 1 | 3120 Logistics Way | Jul 2026 | 52,000 | $185 | $178 |
| Comp 2 | 1847 Distribution Dr | May 2026 | 44,800 | $192 | $181 |
| Comp 3 | 980 Commerce Blvd | Mar 2026 | 50,100 | $188 | $183 |
| Comp 4 | 4200 Industrial Cir | Jan 2026 | 46,500 | $179 | $176 |
| Comp 5 | 2150 Parkway South | Dec 2025 | 49,200 | $175 | $174 |
Indicated Value by Sales Comparison: Analysis of adjusted comparables indicates a value range of $174-$183 per square foot. Subject property quality and location support the upper end of this range.
Sales Comparison Conclusion: $180 per sq ft × 48,200 sq ft = $8,676,000
Income Capitalization Approach
Current lease: Single tenant on 5-year lease executed January 2025 at $0.82/sq ft/month NNN, with annual 3% escalations.
| Line Item | Annual Amount |
|---|---|
| Potential Gross Income | $474,768 |
| Vacancy & Collection Loss (5%) | ($23,738) |
| Effective Gross Income | $451,030 |
| Operating Expenses (NNN structure) | ($45,100) |
| Net Operating Income | $405,930 |
Capitalization Rate: Market analysis of recent industrial sales indicates cap rates ranging from 4.5%-5.2%. Subject property characteristics support a 4.7% cap rate.
Income Approach Conclusion: $405,930 ÷ 0.047 = $8,637,000
Final Opinion of Market Value
(Eight Million Six Hundred Fifty Thousand Dollars)
Reconciliation
Both the Sales Comparison Approach ($8,676,000) and Income Capitalization Approach ($8,637,000) converge within 0.5%, indicating strong market support for the concluded value.
The Sales Comparison Approach was given slightly greater weight given the robust transaction activity in the industrial sector and the quality of comparable data. The Income Approach provides strong support.
Effective Date of Appraisal: September 25, 2026
Date of Report: September 28, 2026
Certification
I certify that, to the best of my knowledge and belief:
- The statements of fact contained in this report are true and correct.
- The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions.
- I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved.
- I have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment.
- My compensation is not contingent upon the reporting of a predetermined value or direction in value.
Marcus Delgado, MAI
Certified General Real Estate Appraiser
California License #AG-029847
September 28, 2026