1-01b - Appraisal 2026.02.181.pdf

LOWERYPA.COM

APPRAISAL REPORT

VACANT LAND

2215 35th Street, Lubbock, Lubbock County, Texas

CLIENT

DALLAS ▪ FORT WORTH ▪ HOUSTON ▪ SAN ANTONIO ▪ EL PASO ▪ WEST TEXAS

February 25, 2026

Ken Jernberg – Right of Way Agent

City of Lubbock Lubbock, Texas

2215 35th Street, Lubbock, Lubbock County, Texas

In accordance with your request and authorization, we have completed an Appraisal Report of the captioned property for the purpose of developing an opinion of the market value of the subject property. It is our intent to comply with 12

CFR, Subpart C - Subsection 34.42(g), Department of the Treasury, Office of the Comptroller of the Currency, as well as the Uniform Standards of Professional Appraisal Practice (USPAP) and FIRREA.

It should be noted that the undersigned have experience in appraising properties considered similar to the subject, in the subject market area, and therefore comply with the Competency Rule as outlined in USPAP.

The following report, plus the Addenda, sets forth our findings and conclusions. Maps, plats and photographs that are considered essential to explain the reasoning followed in making the appraisal have been included and the conclusions are expressed therein. Also, no hazardous materials or waste were noted upon inspection of the subject property. Please refer to the Basic Assumptions and Limiting Conditions section of this report.

USPAP Standards Rule 1-2(h) states that an appraiser must identify the scope of work necessary to complete an assignment. The scope of work is acceptable when it is consistent with: (1) the expectations of participants in the market for the same or similar appraisal services; and (2) what the appraiser’s peers’ actions would be in performing the same or similar assignment in compliance with USPAP. In the case of the subject property, both of these USPAP criteria have been met.

NOTEWORTHY POINTS

▪ The subject is one (1) parcel of vacant land totaling 0.46 acres or 19,875 SF.

▪ The subject is not under contract of sale nor listed for sale.

▪ Developed an opinion of market value via the Sales Approach. It is noted that the Income Approach and Cost

Approach to value are not utilized for this report. The omission of the Income Approach and Cost Approach to value is not considered to, in any way, reduce the reliability of the value conclusions herein. The Cost Approach was not considered to be applicable due to the lack of significant improvements located on the subject site.

The Income Approach was not considered to be applicable due to the subject is a non-income producing piece of land.

▪ Reader is referred to the Hypothetical Condition in the Scope of Work section herein.

DALLAS ▪ FORT WORTH ▪ HOUSTON ▪ SAN ANTONIO ▪ EL PASO ▪ WEST TEXAS

The appraisal, subject to the assumptions and limiting conditions as expressed herein and conducted according to the

Uniform Standards of Professional Appraisal Practice, led us to develop the opinion of market value as follows:

Status Interest Date Value

As Is Fee Simple February 23, 2026 $28,000

VALUE CONCLUSION

Support and explanation for our value conclusion is explained in detail in the contents of the attached report. It has been a pleasure to assist you, and if we can be of service to you in the future, please let us know.

Lowery Property Advisors, LLC

JACOB ALLEN NICOLE HARRISON

Texas State Certified General Real Estate Appraiser Texas State Certified General Real Estate Appraiser

Certificate No. TX1381093-CG Certificate No. TX1381338-CG jake@lowerypa.com nharrison@lowerypa.com

OSCAR CARLOS JR.

Texas State Appraiser Trainee

Certificate No. TX1344113-T ocarlos@lowerypa.com

CONTENTS

SALIENT DATA

SUBJECT PHOTOS

INTRODUCTION

SCOPE OF WORK

REGIONAL

NEIGHBORHOOD

DEMOGRAPHICS

ECONOMIC UPDATE

SITE DESCRIPTION

PROPERTY HISTORY

REAL ESTATE TAXES

HIGHEST & BEST USE

LAND VALUATION

MARKETING / EXPOSURE TIME

ASSUMPTIONS & LIMITING CONDITIONS

CERTIFICATION

ADDENDUM

SALIENT DATA LUBBOCK ▪ TEXAS

LPA 2026.02.181 PAGE 1

SALIENT DATA

GENERAL

Date of Valuation February 23, 2026 "As Is"

Date of Inspection February 23, 2026

Property Rights Fee Simple

SITE

Location South side of 35th Street, east of Avenue W. The address associated with the subject is 2215 35th Street, Lubbock, Lubbock County, Texas.

Site Description 0.46 acres (19,875 SF) and is rectangular in shape with generally level topography and ample drainage. No flood plain is noted. Reader is referred to the Site Description section for further details.

Legal Description NE/COR Block 3, Alta Vista Addition, Lubbock, Lubbock County, Texas.

Zoning “MDR” – Medium Density Residential District

IMPROVEMENTS

General Description The subject property displays a City of Lubbock water tower, concrete paving, and perimeter fencing in average condition. For the purposes of this report, the improvements are not included in this analysis.

HIGHEST & BEST USE

As Vacant Residential development

SUBJECT PHOTOS LUBBOCK ▪ TEXAS

LPA 2026.02.181 PAGE 2

SUBJECT PHOTOS

SUBJECT PHOTOS LUBBOCK ▪ TEXAS

LPA 2026.02.181 PAGE 3

INTRODUCTION LUBBOCK ▪ TEXAS

LPA 2026.02.181 PAGE 4

INTRODUCTION

This is an Appraisal Report, which is intended to comply with the reporting requirements set forth under

Standards Rule 2-2(a) of the Uniform Standards of Professional Appraisal Practice for an Appraisal Report.

Supporting documentation concerning the data, reasoning and analyses is retained in the appraiser's file. The depth of discussion contained in this report is specific to the needs of the client and for the intended use stated below. The appraiser is not responsible for unauthorized use of this report. Furthermore, as agreed upon with the client prior to the preparation of this appraisal, this is an appraisal as set forth by USPAP.

TYPE OF VALUE

The value definition employed in this report is Market Value as defined in 12 CFR - Part 34.42 (FIRREA), Department of the Treasury, Office of the Comptroller of the Currency.

Market value means the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

▪ Buyer and seller are typically motivated;

▪ Both parties are well informed or well advised, and acting in what they consider their own best interests;

▪ A reasonable time is allowed for exposure in the open market;

▪ Payment is made in terms of cash in US dollars or in terms of financial arrangements comparable thereto;

and

▪ The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale

Intended Use Internal Valuation

Intended User City of Lubbock

Client City of Lubbock

Interest Valued Fee Simple

Dates of Valuation February 23, 2026 "As Is"

Date of Inspection February 23, 2026

Date of Report February 25, 2026

SCOPE OF WORK LUBBOCK ▪ TEXAS

LPA 2026.02.181 PAGE 5

SCOPE OF WORK

The scope of the assignment relates to the extent and manner in which research is conducted, data is gathered and analysis is applied. In preparing this appraisal, the appraisers did the following:

▪ Inspected the subject property;

▪ Searched the applicable market area for comparable market data. We utilized multiple sources including but not limited to: Costar, Loopnet, area brokers, local MLS, as well as our proprietary database.

▪ Interviewed landowners and local brokers familiar with the subject area and considered their insight of the current market and transactions;

▪ Obtained information from surrounding counties and area jurisdictions regarding zoning, taxes, property history, flood plain, utilities, etc.

▪ Developed an opinion of market value via the use of the Sales Approach. The inclusion or exclusion of approaches to value was determined by LPA and not our client. The omission of the Income Approach and Cost Approach to value is not considered to, in any way, reduce the reliability of the value conclusions herein. The Cost Approach was not considered to be applicable due to the lack of significant improvements located on the subject site. The Income Approach was not considered to be applicable due to the subject is a non-income producing piece of land.

▪ To develop the opinion of value, the appraiser performed an appraisal process, as defined by the Uniform

Standards of Professional Appraisal Practice.

Extraordinary Assumptions & Hypothetical Conditions

It is emphasized that per USPAP, “the use of extraordinary assumptions and or hypothetical conditions may have affected assignment results.” These terms are defined as follows:

Extraordinary Assumption, “an assignment-specific assumption as of the effective date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser’s opinions or conclusions.”

This report is made with the following extraordinary assumption(s):

▪ None.

Hypothetical Condition, “a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis.” This report is made with the following hypothetical condition(s):

▪ Per the client’s request, the subject property is analyzed under the hypothetical condition that the subject is vacant land and does not display a water tower or any other horizontal or vertical improvements.

REGIONAL LUBBOCK ▪ TEXAS

LPA 2026.02.181 PAGE 6

REGIONAL

The subject is located within the Lubbock, Texas Metropolitan Statistical Area (MSA). The area is made up of three contiguous counties in Northwest Texas, including Lubbock, Crosby, and Lynn Counties.

DEMOGRAPHICS

According to the Lubbock Economic Development Alliance, the 2024 population of the MSA is 367,109. Based on this estimate, Lubbock is the 11th largest city in Texas and the 2nd largest west of Interstate 35. By 2025, the population is projected to grow approximately 6.5%. According to Esri, the median household income for the area is $60,487.

LPA 2026.02.181 PAGE 7

ECONOMICS

Lubbock MSA

Lubbock’s economy is losing steam. Job growth has cooled to lag the state and nation on a year-ago basis.

Healthcare job gains are offsetting small losses in the public sector. Average hourly earnings are recovering, suggesting that even as job growth slows, the quality is improving. However, the Quarterly Census of

Employment and Wages data indicates that the monthly payroll survey is overstating job growth. The unemployment rate is inching up, but this is partly due to upward pressure from labor force gains. House prices moved sideways while the state held onto at least meager gains.

State government employment growth will continue to slow in the coming year but remain a cornerstone of the local economy. Middling performance this year is of little concern, given recent strength and elevated payroll levels. Texas Tech University is the lifeblood of Lubbock’s economy, placing it in the top 50 metro areas nationally for reliance on state government employment. Student numbers at Texas Tech have steadily increased, with total enrollment up 28% over the last decade. The majority of the university’s students come from in-state, and growth in the college-age cohort in Texas comfortably outpaces the national pace. The growing student body and a healthy budget will support job growth in the public sector and in downstream consumer services.

Healthcare growth will slow into the new year, but the industry will still be an essential provider of mid-wage jobs. Relative to the state, Lubbock has a slightly outsize share of healthcare employment because patients from neighboring rural counties come to Lubbock for healthcare. Given the industry’s current elevated level of employment, there is little room left to run in the year ahead, and already slowing growth will continue to cool. However, a favorable mix of medical services will keep the industry moving in the right direction in the long term. An above-average proportion of jobs are in either in-home or outpatient care, which have performed well nationally and outperformed the state. Healthcare jobs provide positive spillover to consumer services as they garner competitive wages. Longer term, the presence of a medical school at Texas Tech will ensure that Lubbock remains a local destination for medical care and will preserve growth prospects.

LPA 2026.02.181 PAGE 8

Deteriorating migration trends will keep Lubbock a step behind Texas’ high-flying population growth. Net domestic migration has been slowing in recent years, and high-frequency relocation data from Equifax indicates weakness persisted in 2024. This is because, beyond the university, there are few dynamic employment prospects. High wage jobs account for a scant 6% of all positions, compared with about 25% statewide and nationally. Young adults, including recent graduates, depart for greener pastures upon completing their studies. Support from immigration will fade under Trump’s restrictive immigration policies, as is the case nationally. Nonetheless, Lubbock will still outpace overall U.S. population growth, if not the state, thanks to an elevated and rising birthrate. This will not do much for labor force gains, however, as many residents depart in early adulthood.

Strengths

▪ Large university presence in Texas Tech.

▪ Below-average business costs.

▪ Diverse economy relative to metro areas that are similar in size.

▪ Below-average employment volatility.

Weaknesses

▪ Dearth of high-value-added industries.

▪ Limited private sector investment.

▪ Exposure to the volatile cotton industry.

2020 2021 2022 2023 2024 INDICATORS 2025 2026 2027 2028 2029

17.3 18.2 18.6 19.1 19.6 Gross metro product (C17$ bil) 20.0 20.4 20.9 21.4 22.0

0.3 5.4 2.0 2.6 2.6 % change 2.3 2.1 2.3 2.5 2.6

145.9 150.8 156.1 159.4 161.7 Total employment (ths) 163.6 165.1 166.3 167.6 168.9

-3.2 3.4 3.5 2.1 1.4 % change 1.2 1.0 0.7 0.7 0.8

5.8 4.6 3.4 3.4 3.4 Unemployment rate (%) 3.3 2.9 2.7 2.6 2.5

6.4 9.3 2.2 5.8 5.4 Personal income growth (%) 4.3 4.7 4.5 4.3 4.6

56.7 58.4 59.2 58.8 59.0 Median household income ($ ths) 61.1 63.6 65.9 68.0 70.0

322.3 325.9 329.9 334.8 337.8 Population (ths) 340.3 342.1 343.7 345.3 346.9

0.8 1.1 1.2 1.5 0.9 % change 0.7 0.5 0.5 0.5 0.5

1.6 3.1 3.4 3.6 1.8 Net migration (ths) 1.2 0.6 0.4 0.4 0.4

2023.0 2725.0 2325.0 1952.0 1899.9 Single-family permits (#) 1227.1 1271.4 1279.9 1272.3 1241.5

1834.0 679.0 954.0 562.0 303.4 Multifamily permits (#) 479.1 578.6 640.9 669.8 664.5

4.1 11.4 15.5 3.6 1.4 FHFA house price (1995Q1=100) 0.3 2.1 2.9 3.5 3.6

Moody's Analyt ics

LPA 2026.02.181 PAGE 9

MAJOR ATTRACTIONS

Texas Tech University is, as expected, a major source of entertainment and pride for the area. In addition to athletics, the university has a nationally recognized museum, a renowned art collection, and a theatre.

Outside of the realm of the university, Lubbock has a large arts presence. The Louise Hopkins Underwood

Center for the Arts hosts the First Friday Arts Trail, a popular attraction for locals. The area also has a rich history in country and rock and roll music. The Buddy Holly Center plays tribute to Lubbock’s most prominent resident, Buddy Holly. In addition to this, the West Texas Walk of Fame celebrates other musicians that have called the

South Plains home, including Holly, Waylon Jennings, Mac Davis, Roy Orbison, and Tanya Tucker.

TRANSPORTATION

Lubbock Preston Smith International Airport

The Lubbock Preston Smith International Airport is located five miles north of Lubbock, in

Lubbock County, Texas. Originally named Lubbock International Airport, it was renamed in

2004 to honor former Texas Governor Preston E. Smith, an alumnus of Texas Tech University.

As of 2025, the airport ranks as the 9th busiest in Texas, following major airports in Dallas, Houston, Austin, San Antonio, El Paso, and Midland. It remains the leading airport among smaller Texas cities.

The airport is one of 42 worldwide featuring the CNN Airport Network. Lubbock Preston Smith International

Airport serves as a hub for FedEx and UPS feeder planes, connecting to cities across the South Plains. Currently, the airport is served by three commercial airlines: Southwest Airlines, American Airlines, and United Airlines, offering direct flights to Dallas, Houston, Austin, Denver, Las Vegas, and Phoenix.

The Texas Department of Transportation

The city is known for its efficient roadway system. Roads in Lubbock are set up in a grid formation, with named streets and avenues running north to south, and numbered streets running east to west. Intracity expressways include Loop 289 and the Marsha Sharp Freeway, while the main highways to other regions include Interstate 27, which provides easy access to Amarillo and

Interstate 40; US Highway 84, which provides easy access to Interstate 20; and US Highway 87, which provides access to the oil-rich Permian Basin.

LPA 2026.02.181 PAGE 10

CitiBus

Citibus is the public transportation bus and paratransit system serving Lubbock, Texas. It operates bus routes throughout the city, with main routes converging at the Downtown

Transfer Plaza, which also houses the Greyhound bus terminal. Citibus has been in continual service since 1971, when the city of Lubbock took over public transit operations. The paratransit system is called CitiAccess. Citibus operates six days a week, with fixed-route service running from

5:35 a.m. to 7:45 p.m. Monday through Friday, and from 6:35 a.m. to 7:55 p.m. on Saturdays. Nighttime service is supplemented by a curb-to-curb service called Citibus On-Demand, which operates until 11:00 p.m. on weekdays and Saturdays . In addition to regular bus routes, Citibus has a partnership with Texas Tech University to run shuttle buses on school days and game-day events. There are 9 city routes and 10 Texas Tech campus routes.

CONCLUSION

Lubbock will remain an underperformer compared with Texas but will still outpace the nation. The university will offer much needed stability, including in employment, migration and incomes. Consumer industries will lead job growth, with strong population growth propelling total employment growth ahead of the national pace. However, a dearth of high-wage jobs will keep migration gains in check long term.

NEIGHBORHOOD LUBBOCK ▪ TEXAS

LPA 2026.02.181 PAGE 11

NEIGHBORHOOD

A neighborhood is typically a segment of a community, city or town which is a homogeneous grouping of individuals, buildings or business enterprises within the larger community. A neighborhood has three stages of life and possibly a fourth. They are (1) integration (the development stage), (2) equilibrium (the static stage),

(3) disintegration (the declining or decaying stage), and possibly (4) a redevelopment or rejuvenation state or period and continuance of the neighborhood life cycle.

SUBJECT

LPA 2026.02.181 PAGE 12

GENERAL

Lubbock County is located in northwest Texas. Lubbock County is considered to be at the center of the

South Plains, which is the area located between the Permian Basin to the south and the Texas Panhandle to the north. The county of Lubbock was founded in 1876. The settlement that is the present-day city of Lubbock was not formed until late 1890. Two settlements within the county, Old Lubbock and Monterey, were combined to form the settlement of Lubbock. During the following year, the settlement of Lubbock was named the county seat for Lubbock County. The city was incorporated on March 16, 1909. Shortly after incorporation, rail service was established in Lubbock. As agriculture continued to grow within the region and as the railroads continued to expand, Lubbock became the marketing center of the region and earned the name "Hub of the Plains". Lubbock continued to grow as the city's opportunities increased. In 1925, Texas

Technological College opened its doors, providing Lubbock with a major boost to its economy. While

Lubbock felt the effects of the Great Depression, the city started to bounce back with the opening of two military training bases during World War II. After the war, Lubbock experienced a tremendous growth rate.

As of 2011, the estimated population for the Lubbock Metropolitan area is estimated to be approximately

280,000. Lubbock continues to grow, relying on the vast agricultural industry of the area as well as on a variety of manufacturing facilities. SOURCE: www.ci.lubbock.tx.us

ACCESS

Access to the subject neighborhood is considered good due to the proximity of primary thoroughfares close to the subject. State Highway 87, also known as Interstate 27, is the major north-south thoroughfare, starting in Brady, just southeast of San Angelo, bisecting the city of Lubbock and continuing north to Amarillo. Loop

289 is a primary thoroughfare that circles the perimeter of Lubbock. Marsha Sharp Freeway (US Highway 82) is the primary east-west traffic carrier through the city of Lubbock. This traffic carrier provides direct access east to Texas Tech University and connects to Loop 289 to the west. Highway 114 is an additional east-west traffic carrier that changes to 19th street on the east side of the city. Other major local thoroughfares include

East 50th Street/East Farm-to-Market Road 3523 and County Road 3000.

LPA 2026.02.181 PAGE 13

UTILITIES

The subject neighborhood is adequately served by all the typical utilities, including water, sewer, electric service, natural gas, private well and septic and public telephone. No shortages of utility service in the developed portions of the neighborhood were reported and lack of utilities has not been detrimental in the development of the area. Major utility companies servicing the neighborhood include the city of Lubbock, TXU Gas Company, and TXU Electric Company.

NUISANCES & HAZARDS

Nuisances and hazards are limited in the subject neighborhood. Vibration, smoke, smog, odors and intense noise are basically related to vehicular traffic along the major thoroughfares. As in any area, traffic density poses problems ranging from congestion to noise. These problems are not severe and are a natural part of most communities.

LIFE CYCLE

Each neighborhood has a unique and dynamic quality all its own, given mans’ unique imagination, design and development of an area. This quality is described as a "life cycle," which is identified in The Appraisal of

Real Estate as evolving through the following four stages.

Growth Neighborhood gains public favor and acceptance

Stability Equilibrium without marked gains or losses

Decline Diminishing demand

Revitalization Renewal, modernization and increasing demand

The subject neighborhood appears to be in the stability period of its life cycle. The immediate area is a well-established area within Lubbock and is considered to be approximately 50% developed. Properties appear to range in age from new to over 50 years.

CONCLUSION

The subject neighborhood is located in Lubbock, Lubbock County, Texas. Demand for virtually all types of real estate in this area has been mostly stable in recent years. The future growth of the neighborhood relies heavily upon the overall strength of the real estate market within the West Texas area. The subject property displays good locational attributes in the defined neighborhood and should benefit from any positive economic conditions experienced by the immediate area.

DEMOGRAPHICS LUBBOCK ▪ TEXAS

LPA 2026.02.181 PAGE 14

DEMOGRAPHICS

The following pages summarize data generated by the STDB.

LPA 2026.02.181 PAGE 15

LPA 2026.02.181 PAGE 16

ECONOMIC UPDATE LUBBOCK ▪ TEXAS

LPA 2026.02.181 PAGE 17

ECONOMIC UPDATE

LPA is committed to monitoring the current economic environment. The following section analyzes several current economic factors such as interest rates, inflation, gas prices, unemployment, emerging technologies, etc. and their effects on commercial real estate.

CURRENT ECONOMIC CONDITIONS

As the effects of the pandemic subsided, the commercial real estate market entered a new chapter marked by renewed activity, evolving interest rates, and shifting patterns of demand. Remote work continued to reshape office usage - with vacancy rates exceeding 20% in several major metros - while development adapted to rising construction costs, which climbed more than 30% between 2021 and 2023. At the same time, tighter lending standards promoted more strategic investment. Federal Reserve policy - including 11 rate hikes that pushed the federal funds rate above 5% - along with global developments and renewed tariffs, contributed to more deliberate investor decision-making, renewed transaction momentum, and sector-wide realignment. The timeline below highlights key events over the past several years that have had a significant impact on commercial real estate across the United States:

Mar 2021 American Rescue Plan injects capital, boosting retail and industrial demand.

Mar 2022 Fed begins aggressive rate hikes, slowing CRE transactions.

Jul 2023 Job growth rebounds, lifting demand across CRE sectors.

May 2023 Consumer spending holds strong, supporting retail assets.

Apr 2024 Cities introduce incentives for office-to-residential conversions.

Oct 2024 GDP growth beats forecasts, signaling broad momentum.

Feb 2025 New steel and aluminum tariffs push construction costs higher.

Apr 2025 Manufacturing growth and reshoring spur demand for industrial space.

Jun 2025 Fed signals rate cuts, improving outlook for CRE financing.

Nov 2025 Manufacturing is slowing slightly while the services sector continues to grow.

LPA 2026.02.181 PAGE 18

INTEREST RATES

Prime Rate is individually determined by banks and often used as a reference rate (also known as the base rate) for several types of loans. Examples of the types of loans using this rate include credit card loans and small business loans. The prime rate is used by banks to lend to consumers and are fixed and typically do not change over extended periods of time.

Secured Overnight Financing Rate is a benchmark interest rate that institutions utilize for business and consumer loans. The Secured Overnight Financing Rate (SOFR) is the dominant benchmark rate after the US

LIBOR panels ended on June 30, 2023. Unlike its predecessor, SOFR incorporates actual lending transaction data amongst institutions making it a more reliable source.

Federal Funds Rate is set by the Federal Open Market Committee (FOMC). This rate is the target at which excess reserves are lent and borrowed amongst commercial banks overnight. This rate influences short-term rates on credit cards and consumer loans as well as piquing investors’ interest by impacting the stock market.

FedPrimeRate

INTEREST RATES

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SOFR Fed Fund PRIME

To combat higher than average inflation, the Federal Reserve began raising interest rates in early 2022, maintaining a tightening stance through much of 2023. In September 2024, rates were cut by 50 basis points for the first time in four years, followed by additional 25-basis-point cuts in November and December. Another

25-basis-point cut occurred in October 2025, bringing the target range to 3.75%–4.00% and lowering the U.S.

prime rate to 7.00%. Entering late 2025, interest rates remain below their 2023 peak, and their movements continue to influence capitalization rates, which often trend in the same direction. LPA remains committed to monitoring and analyzing the ongoing impact of these rate adjustments on commercial real estate markets.

LPA 2026.02.181 PAGE 19

INFLATION

Inflation has played a significant role in shaping the U.S. economy since the beginning of 2021. It measures the rate of increase in prices over time, most commonly tracked through the Consumer Price Index (CPI), which reflects changes in the cost of a basket of goods and services. After reaching historic highs in 2022, inflation began to ease in 2023 and carried into 2024, marking a period of gradual stabilization. Throughout 2024 and into 2025, inflation remained a central focus for both households and businesses, as shifts in prices continued to affect consumer spending and overall economic activity. Even as conditions moderated, the persistence of inflation in 2025 underscored its lasting influence on the post-pandemic economy. The below chart using data from the U.S. Bureau of Statistics illustrates the inflation rate from 1981 through 2025, highlighting the recent surge and subsequent moderation following the COVID-19 pandemic.

INFLATION SINCE 1984

U.S. Bureau of Statistics

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LPA 2026.02.181 PAGE 20

UNEMPLOYMENT

The COVID-19 pandemic accelerated existing trends of slow labor force growth and heightened demand for skilled workers. Unemployment initially spiked in 2020 but steadily declined in the years that followed, returning to pre-pandemic levels by 2023. In 2022, the U.S. labor market experienced one of its strongest years of job growth in decades, led by the leisure and hospitality sector along with professional and business services.

Entering 2024 and continuing into 2025, unemployment has remained low by historical standards, holding close to pre-pandemic averages. While the labor market in 2025 remains resilient, many industries continue to face staffing challenges as workers have shifted careers or sought more flexible arrangements. The chart below shows the monthly unemployment rate from December 2022 through 2025.

UNEMPLOYMENT RATE

Federal Reserve Bank of St . Louis

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GAS PRICES

Since early 2022, the national average gas price has remained above pre-pandemic levels, with periods of both sharp increases and temporary declines. Prices began to ease in 2023 but continued to fluctuate through

2024 and into 2025, showing more stability than in the immediate years following the pandemic. While volatility has moderated, gas prices in 2025 remain elevated compared to pre-pandemic levels and continue to influence transportation costs, consumer spending, and overall economic conditions. The chart below illustrates national average gas prices per gallon over the past five years, highlighting the spikes that followed the pandemic and the more recent patterns of stabilization.

GAS PRICES SINCE 2021

U.S. Energy Information Administration

2.87

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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2021 2022 2023 2024 2025 2026

The sharp increase in prices can be attributed in part to the Russia–Ukraine conflict, which disrupted global energy markets as sanctions on Russian oil reshaped supply chains. Additional pressures extended into 2025 as refinery closures during the COVID-19 pandemic and a slower recovery in production continued to affect supply and demand imbalances.

Some reasons for the sharp decreases in prices include inflationary pressures reducing demand, consumers limiting driving due to higher costs, and government measures such as the release of emergency oil reserves.

These influences carried into 2025 as prices adjusted, reinforcing the trend of ongoing fluctuations even as conditions stabilized compared to prior years.

LPA 2026.02.181 PAGE 22

EMERGING TECHNOLOGY

Technological advancements in proptech are transforming commercial real estate operations and influencing property valuations. Smart buildings, equipped with Internet of Things (IoT) and automation, enhance energy efficiency, security, and occupant comfort, increasing their market value. These attributes are highly valued, leading to higher valuations. Proptech solutions create operational efficiencies, reducing costs and errors, and streamlining property management. These efficiencies improve financial performance, making properties more attractive to investors. By automating tasks, these technologies reduce costs and errors, leading to better financial performance and, consequently, higher property valuations.

U.S. SMART BUILDING MARKET SIZE

Precedence Research

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2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033

M a rk e t Si ze

(B ill io n s)

The U.S. smart building market is poised for substantial growth, driven by technological advancements and strategic investments. Key details include:

• 2024 Market Size: Reached USD 24.66 billion.

• 2034 Projection: Expected to grow to USD 68.67 billion.

• Growth Rate: Anticipated CAGR of 10.70% from 2025 to 2034.

• Regional Share: North America captured a 35% revenue share in 2024.

LPA 2026.02.181 PAGE 23

RELOCATION TRENDS

Relocation trends between states in the US significantly impact the commercial real estate sector. Population influxes in states like Texas and Florida boost demand for office spaces, retail outlets, and residential developments, leading to higher property values and rental rates. Consequently, developers and investors capitalize on these opportunities by initiating new construction projects or refurbishing existing properties to meet rising demand. States with population outflows, like New York and California, face challenges in the commercial real estate market as dynamics in office, retail, and industrial real estate rapidly evolve.

U.S. RELOCATION TRENDS 2025

U-Haul Growth Index

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-50

-1

Growth

Office Sector As companies relocate or downsize, vacancies rise, reducing rental rates and property values.

Landlords must innovate leasing strategies or reposition assets to attract and retain tenants.

Retail Sector Retail real estate growth is slow due to declining population and consumer spending. Property owners need creative approaches to maintain occupancy and attract tenants.

Industrial Sector Demand for logistics facilities is growing as e-commerce and population increase. Areas with significant population growth are seeing more investment in industrial real estate to support logistics infrastructure.

CONCLUSION

The current economic environment is ever changing. LPA is working diligently to capture and analyze current market data to reliably quantify impacts on real property values, national and regional. As the situation evolves, LPA is committed to monitoring current events and how they impact the commercial real estate market.

SITE DESCRIPTION LUBBOCK ▪ TEXAS

LPA 2026.02.181 PAGE 24

SITE DESCRIPTION

PHYSICAL

Location

South side of 35th Street, east of Avenue W. The address associated with the subject is 2215 35th Street, Lubbock, Lubbock County, Texas.

Legal Description

NE/COR Block 3, Alta Vista Addition, Lubbock, Lubbock County, Texas.

Size / Configuration / Flood Zone

0.46 acres (19,875 SF) and is rectangular in shape with generally level topography and ample drainage. No flood plain is noted.

Frontage / Accessibility

The subject’s site displays adequate frontage. The subject site is considered to possess ample access to the subject’s traffic carrier.

Utilities

Public water and sewer service are provided by the subject’s municipality. Based on our research, these utilities are sufficient for the development in the area. In addition, the city provides fire and police protection along with garbage pick-up. Electrical and natural gas are provided by the region’s typical providers. At the present time, all utilities appear to be sufficient for area development patterns.

LPA 2026.02.181 PAGE 25

LEGAL

Zoning / Restrictions

As mentioned previously, the subject is zoned “MDR” – Medium Density Residential District by the subject’s municipality. The subject’s zoning classification is as follows:

“MDR” – Medium Density Residential District

Easements / Encroachments

The subject site is encumbered by typical utility easements. Due to the general location of these easements, they are not considered detrimental toward development and/or the site's overall marketability. No other detrimental easements and/or encroachments were noted upon physical inspection of the subject tract. It should be noted, however, that if a current survey map, or a registered surveyor determines that adverse easements exist, these factors might impact the market value and/or the marketability of the subject property.

Therefore, it is assumed that no easements and/or encroachments exist, which would adversely affect the marketability or desirability of the site.

Given the physical characteristics, the subject site is capable of being developed with many residential uses.

LPA 2026.02.181 PAGE 26

LPA 2026.02.181 PAGE 27

LPA 2026.02.181 PAGE 28

FLOOD

PROPERTY HISTORY LUBBOCK ▪ TEXAS

LPA 2026.02.181 PAGE 29

PROPERTY HISTORY

Ownership of the subject property is currently vested in City of Lubbock as evidenced by the county deed records. No real property sale transactions related to the subject have occurred in the three years prior to the date of this report. The subject is not under contract of sale nor listed.

As mentioned previously, per the client’s request, the subject property is analyzed under the hypothetical condition that the subject is vacant land and does not display a water tower or any other horizontal or vertical improvements.

The subject’s tax card is as follows:

REAL ESTATE TAXES LUBBOCK ▪ TEXAS

LPA 2026.02.181 PAGE 30

REAL ESTATE TAXES

The subject property is located in Lubbock, Lubbock County, Texas and is taxed based on values established by the county tax assessors. The tax rates are applied to the assessed value of the subject property, and the taxes for the subject property are then estimated. The taxes are estimated per $100 of assessed value. This property is subject to taxes for the city of Lubbock, Lubbock Independent School District and Lubbock County.

The subject displays an assessment of $0, which is considered very favorable, based on the value conclusions of this report. NOTE: Per Lubbock County Tax Assessor, the subject property is exempt from all property taxes, given that it is an active governmental property.

HIGHEST & BEST USE LUBBOCK ▪ TEXAS

LPA 2026.02.181 PAGE 31

HIGHEST & BEST USE

The Appraisal Institute defines highest and best use as follows: "The reasonably probable and legal use of

Vacant Land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value."

The four criteria the highest and best use must meet are:

PHYSICALLY POSSIBLE LEGALLY PERMISSIBLE

What uses of the site in question are physically possible?

What uses are permitted by zoning and deed restrictions?

FINANCIALLY FEASIBLE MAXIMALLY PRODUCTIVE

Which possible and permissible uses will produce a net return to the owner of the site?

Among the financially feasible uses that are physically possible and legally permissible, which use will produce the highest net return or the highest present worth?

There are two types of highest and best use studies. The first is the highest and best use of the land or site as though vacant. The second is the highest and best use of the property as improved. The highest and best use of land or a site as though vacant assumes that the parcel is vacant or can be made vacant by demolishing any improvements. The question to be answered in this analysis is: If the land is, or were vacant, what use should be made of it?

The highest and best use of a property as improved pertains to the use that should be made of an improved property in light of its improvements. Should it be maintained as it is, or be renovated, expanded, demolished, or partly demolished? Should it be replaced with a different type or intensity of use, or should it be held as an interim use? The improvements should be retained as long as they have some value and the return from the property exceeds the return that would be realized by a new use, after deducting the costs of demolishing the old building and constructing a new one.

HIGHEST & BEST USE LUBBOCK ▪ TEXAS

LPA 2026.02.181 PAGE 32

HIGHEST & BEST USE - AS VACANT

Physically Possible

0.46 acres (19,875 SF) of vacant land that is rectangular in shape. The address associated with the subject is

2215 35th Street, Lubbock, Lubbock County, Texas. Overall, access is considered average. The property has all necessary utilities in place. The site is primarily surrounded by residential and retail uses. Access to the subject’s neighborhood is considered average due to its location on and near primary traffic carriers.

The principle of conformity is an important consideration in determining the physically possible uses of a site.

Conformity is the appraisal principle that holds that real property value is created and sustained when the characteristics of a property conform to the demands of its market. The styles and uses of the properties in an area may conform for several reasons, including economic pressures; the shared preferences of owners for certain types of structures, amenities, services; and the enforcement of uniform standards by zoning ordinances.

Based on the subject’s physical characteristics and the principle of conformity, the site would most likely be developed with a residential use.

Legally Permissible

The site is zoned by the subject’s municipality as ”MDR” – Medium Density Residential District. According to city officials, this zoning has many uses including residential developments. This zoning provides for a uniform set of standards for development, including parking and building setbacks. Other than zoning, no private deed restrictions were uncovered during a normal investigation, which would further limit the potential uses of the subject site. Nonetheless, a title policy is strongly suggested in order to guarantee the absence of adverse restrictions. No other legal restrictions or covenants were found to be imposed on the subject property at the time of the appraisal, which would further restrict its development. The site's zoning requirements support the physical indication that the site’s most probable use, as vacant, would be for some form of residential development.

Financially Feasible & Maximally Productive

The prior consideration of physically possible uses and legally permissible does not significantly narrow the use of the subject property. Based on market data presented in this report, it appears that development of a residential building is likely feasible.

After considering legal, physical and financial alternatives, it is our opinion that the highest and best use of the site, as vacant, is for a residential development.

LAND VALUATION LUBBOCK ▪ TEXAS

LPA 2026.02.181 PAGE 33

LAND VALUATION

The principles of real estate appraisal are basic to the sales comparison approach; however, one of the most important is the principle of substitution. "As applied to the sales comparison approach, the principle of substitution holds that the value of a property tends to be set by the price that would be paid to acquire a substitute property of similar utility and desirability."

The sales comparison approach is a method of estimating market value whereby a subject property is compared with comparable properties that have sold recently. One premise of the sales comparison approach is that the market will determine a price for the property being appraised in the same manner that it determines the prices of comparable, competitive properties. Essentially, the sales comparison approach is a systematic procedure for carrying out comparative shopping. As applied to real estate, the comparison is applied to the unique characteristics of the economic good that cause real estate prices to vary.

LPA 2026.02.181 PAGE 34

COMP MAP

MAP

COMP 3

COMP 2

COMP 1

COMP 4

LPA 2026.02.181 PAGE 35

COMPARABLE 1

Date of Sale September 2, 2025

Sale Price $23,000

Price Per Acre $176,923

Price Per SF $3.93

Size (acres) 0.13

Size (SF) 5,854 Grantor Custom Life Homes LLC

Zoning MDR Grantee Cesar Mendez & Janeth Barraza

Shape Rectangular Recording 2025-35042

Topography Generally Level Confirmation Broker

Utilities Available

Property is located on the south side of Duke Street, east of North Elgin Avenue. Property was vacant at the time of sale. Property is 100% located in the 500-year floodplain. Broker: Michael Martinez (806) 319-2006

Address /

Location

2913 Duke Street, Lubbock, Texas

LOCATION

PHYSICAL DATA

COMMENTS

SALES DATA

LPA 2026.02.181 PAGE 36

COMPARABLE 2

Date of Sale November 15, 2024

Sale Price $27,000

Price Per Acre $84,375

Price Per SF $1.91

Size (acres) 0.32

Size (SF) 14,104 Grantor Maria Lousia Revilla

Zoning MDR Grantee Andrew & Susan Perez

Shape Rectangular Recording 2024-45432

Topography Generally Level Confirmation Broker

Utilities Available

Property is located on the north side of 37th Street, west of Avenue E. Property sold as vacant land. No flood plain is noted. Broker: Collen Melton (806) 999-5353

Address /

Location

604 37th Street, Lubbock, Texas

LOCATION

PHYSICAL DATA

LPA 2026.02.181 PAGE 37

COMPARABLE 3

Date of Sale February 8, 2023

Sale Price $22,000

Price Per Acre $43,011

Price Per SF $0.99

Size (acres) 0.51

Size (SF) 22,280 Grantor Sunrise Land LLC

Zoning MDR Grantee Daniel Moreno

Shape Rectangular Recording 2023-4875

Topography Generally Level Confirmation Broker

Utilities Available

Property is located on the northeast corner of East 13th Street and M.L.K. Jr. Boulevard. No flood plain is noted.

Broker: Jarrett Thornton (806) 794-7777

Address /

Location

1701-1705 East 13th Street, Lubbock, Texas

LOCATION

PHYSICAL DATA

LPA 2026.02.181 PAGE 38

COMPARABLE 4

Date of Sale January 27, 2023

Sale Price $30,000

Price Per Acre $100,000

Price Per SF $2.30

Size (acres) 0.30

Size (SF) 13,068 Grantor Dennis Carrizales

Zoning MDR Grantee Scales & Co LLC & Shawn A Johnson

Shape Rectangular Recording 2023-3409

Topography Generally Level Confirmation Broker

Utilities Available

Property is located at the southwest corner of Trinidad Street and North Elm Street. Property is 100% located in the

500-year floodplain. Broker: Dennis Carrizales (806) 543-3939

Address /

Location

3117 Duke Street, Lubbock, Texas

LOCATION

PHYSICAL DATA

LPA 2026.02.181 PAGE 39

LAND SALES SUMMARY

The market data utilized for the basis of this analysis is considered the best available and indicative of current market trends for undeveloped land in the subject market area. Components that affect the sale price of vacant land are numerous, but the most prominent are property rights conveyed, terms, conditions of sale, market conditions, size, location, physical features, zoning and public utility availability.

Property Rights

The adjustment for property rights conveyed recognizes that differences in legal interest or estate between the subject and the comparable properties may occur. In this analysis, all the sales occurred in fee simple title and therefore, no adjustments were made.

Financing Terms

The adjustment for cash equivalency takes into account the fact that the transaction price of the comparable property may not be equal to its cash equivalent price. All the sales utilized in this analysis were cash to seller transactions or transactions involving market financing, and no adjustment for cash equivalency was necessary.

Conditions of Sale

Adjustments for conditions of sale are intended to recognize motivations of the buyer and the seller that are unique to ordinary market conditions. All of the comparable market data utilized herein were arm's length transactions. With respect to this factor, no adjustment was indicated.

Market Conditions

Each of the previous sales have been given consideration for the lapse of time between the date of sale and the effective date of this appraisal (market condition). The available market data was analyzed in an attempt to extract an adjustment for this factor. With respect to this factor, no adjustment was indicated.

Location

Differences in value occur due to varying degrees of accessibility, exposure and surrounding development to a site. Access is often determined by corner locations, natural barriers, ease of entrance on and off of major thoroughfares, etc. Surrounding development also plays an important part of locational influences for a property. With respect to this factor, Comparables 1, 3, and 4 indicated upward adjustments to account for their inferior locations within the market area, however, Comparables 3 and 4 are located on hard corners and indicate downward adjustments. Therefore, Comparable 3 displays a minimal upward location adjustment and Comparable 4’s location adjustments are offset.

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Size

Size is a factor that must be considered when comparing vacant land sales. Typically, but not always, larger tracts sell for a lower unit value. Therefore, when making comparisons on a per unit basis, such as price per unit, the larger tracts tend to be adjusted upward and the smaller tracts tend to be adjusted downward to accurately reflect the differences. With respect to this factor, materially larger tracts of land were adjusted upward accordingly, and materially smaller tracts of land were adjusted downward accordingly.

Physical Features

The overall site characteristics of each sale have been compared to the subject site. These include traits such as drainage, site preparation expense, topography, and configuration. Configuration, if irregular, may limit development. With respect to this factor, Comparables 1 and 4 indicated upward adjustments as they are located in the flood plain.

Utilities

The availability of public utilities such as water, electric power and sanitary sewer service have an impact on property values since the non-availability of such utilities could restrict the overall development and/or potential use of an individual site. Therefore, when analyzing vacant land, it is important to determine whether or not public utilities are available. If they are not available, the appraiser must examine to what extreme a potential developer would have to go in gaining access to such services.