Appraisal Report Julie Ott_Keystone_264.pdf

APPRAISAL REPORT

OF

PROPERTY

LOCATED AT

264 KEYSTONE AVENUE

RENO, NEVADA

WASHOE COUNTY ASSESSOR’S PARCEL NUMBER

APN 011-350-30

Effective Valuation Date:

April 16, 2026

Date of Report:

April 30, 2026

Prepared For:

City of Reno c/o: Brynna Nichols, MBA Senior Management Analyst

Prepared By:

Carter-Ott Appraisal Ltd.

6142 Torrington Drive

Reno, NV 89511

CARTER-OTT APPRAISAL

TABLE OF CONTENTS

Transmittal Letter Preface Aerial Photograph Preface Subject Photographs Preface

Executive Summary 1 Introduction and Definitions 2-3 Scope of Work 3 Five Year Sales History 4 Limiting Conditions, Extraordinary Assumptions, Hypothetical Conditions 4-5 Real Estate Market Overview 6-13 Employment/ Population Statistics 13-15 Location Summary 16-20 Site Data 21-29 Improvement Summary 30-35 Highest and Best Use 36-38 Valuation 39 Sales Comparison Approach 39-54 Reconciliation and Final Conclusion 55-56 Reasonable Exposure and Marketing Times 56 Certification 57

ADDENDA 58

Limiting Conditions Appraiser Qualifications Preliminary Title Report (Pages 1 through 9) Revised/ New Legal Description of Subject Property Legal Description of Permanent Easement for Storm Drain Legal Description of Permanent Easement for Union Pacific Railroad ReTRAC Wall Legal Description of Permanent Easement for Keystone Retaining Wall Building Sales Photographs Rental Photographs

26-007

Aerial Map

CARTER - OTT APPRAISAL

SUBJECT PHOTOGRAPHS

Front View of Subject – Looking Easterly

View, Looking Northwesterly

Rear View, Looking Westerly

Rear View, Looking Northwesterly

Close-Up Rear View Within Fenced Parking Area

Rear View Within Fenced Parking Area, Looking Southwesterly

North Side View, Looking Westerly

South Side View, Looking Northwesterly

Rear Warehouse Area / South Side

Rear Warehouse Area / North Side, Ceiling Finishes

Room Off Warehouse Area

One of Several Stairwells Leading to Mezzanine Area

Restroom Off Warehouse Area

Small Office Near Rear Warehouse Area

Electrical Room Near Rear Warehouse Area

Room Near Center Warehouse

Restroom Near Center Warehouse

Sink in Restroom

Center Open Storage/Warehouse Area

Offices in Center Open Storage/Warehouse

Varying Ceiling Finishes and Lighting in Office Near Center WArehouse

Varying Finishes in Storage/Warehouse

Open Mezzanine Area Overlooking Warehouse Area

Unfinished Storage/ Mezzanine Area (Near Center)

Finished Office in Mezz Area

Front Entrance and Stairwell to Mezz

Miscellaneous Finishes in Mezz Area

Break Room in Mezz Area

Men’s Restroom in Finished Mezz Area

Sink Area in Men’s Restroom

Women’s Restroom with Two Stalls

Sink in Women’s Restroom

Basement Room Where Water Main Feeds Building

Front Main Office/ Entry

Restroom in Front Office

Stairwell Leading to Second Floor Office Area

Typical Finishes in Front, Second Floor Finished Offices

Restroom on Second Level Front Office Area with Toilet and Stall Shower

Sink Area in Same Restroom

Additional Restroom in Front Office

Roof Leak Near Front Office Area – North Side of Space

Partially Finished Room Near Front Office, Leading to Storage Mezz

Center Warehouse Area Finishes

Northeast Corner of Enclosed Parking Area, Near ReTRAC and Parcel Boundary

Street View, Looking Southerly Along Vine Street

Street View, Looking Northerly Along Vine Street

Street View, Looking Northerly Along Keystone Avenue

Street View, Looking Southerly Along Keystone Avenue

EXECUTIVE SUMMARY

Identification: Industrial property situated on the south side of the Union Pacific Railroad line with frontage along both Keystone Avenue to the west and Vine Street to the east in Reno, Nevada.

Address: 264 Keystone Avenue, Reno, Nevada

Parcel No.: Washoe County Assessor’s Parcel Number (APN) 011-350-30

Land Area: 53,632 sq.ft. or 1.23 acres

Improvements: Concrete block industrial building with a footprint area of 26,640 sq.ft. plus upstairs office area for total gross building area of approximately 28,015 sq.ft.

Built: 1967

Owner of Record: City of Reno, a municipal corporation and/or Redevelopment Agency of the City of Reno, a public body corporate and politic

Zoning/Land Use: Zoning: Mixed-Use Downtown Northwest Quadrant or MD-NWQ Land Use: Downtown Mixed-Use or DMU

Opportunity Zone: Subject is located within a Designated Opportunity Zone

Highest & Best Use:

As If Vacant As Improved

Mixed Use with Commercial or Light Industrial Emphasis

Utilization of existing improvements for light industrial or similar use

Interest Appraised: Fee Simple

Intended Use: For a Potential Sale

Date of Report: April 30, 2026

Market Value Date: April 16, 2026

Market Value -As Is: $3,000,000

Exposure Time: Approximately 6 to 9 months

1 26-007

INTRODUCTION AND DEFINITIONS

Purpose, Intended Use and Intended User of the Appraisal

The purpose and intended use of the appraisal is to provide the estimated market value of the property for potentially selling the property. The client in the appraisal assignment is the City of Reno. The intended user of the appraisal is also the City of Reno.

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:

1) Buyer and seller are typically motivated;

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

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

4) Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and

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

(Source: Office of the Comptroller of the Currency under 12 CFR, Part 34, Subpart C - Appraisals, 34.545 Definitions [f].)

Property Rights Appraised

Real property consists of the interest, benefits, or rights in real estate. Because the property is vacant with no leases in place, the fee simple interest is valued, subject to any utility, roadway or other easements.

Fee Simple Estate is defined as: Absolute ownership unencumbered by any other interest or estate;

subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power and escheat.

(Source: Appraisal Institute, The Dictionary of Real Estate Appraisal, Seventh Edition, 2022, p. 73.

2 26-007

THE SCOPE OF WORK or type and extent of research and analyses for this assignment has included the following:

1) A viewing of property initially on March 30, 2026, accompanied by Brynna Nichols with the

City of Reno -Public Works; Frank Avera and Kevin Geronimi both with the City of Reno’s

Maintenance and Operations; and Reese Perkins, who is also appraising the property. A more recent interior site visit with both appraisers and Dan Tresley, Project Manager for

Maintenance and Operations (City of Reno), on April 16, 2026, which is the effective date of valuation;

2) Review of preliminary title report, recorded maps, and other easement documentation provided by the City of Reno;

3) Review of subject’s existing zoning, allowable uses, and area characteristics;

4) Research and investigation of market conditions relative to the subject property and discussions with brokers and owners who have sold other properties in the area;

5) Collection, verification, and analysis of comparable sales as available through Washoe County

Assessor's records, Costar and various commercial property listing services;

6) Analysis of the highest and best use with the building improvements contributing to value; thus, the sales comparison approach was used, considering sales of other improved properties; the cost approach was not used given the age of improvements and difficulty with estimating depreciation;

however, the income approach was used as a secondary check on value. Consideration was given to the overall current condition of subject improvements with deductions made to both approaches for the “as is” value indicators;

7) Presentation of findings in this summarized appraisal format.

3 26-007

FIVE-YEAR SALES HISTORY, PROPERTY STATUS AND BACKGROUND

The property was originally built in 1967 as a beer/beverage distribution facility. In June of 1997, the property was purchased by local builder Frank Lepori et.al. with the buiding under a related entity ownership. A hockey rink was later added to the warehouse portion of the building but has since been removed. In October of 2002, the property was sold to the City of Reno as a part of the ReTRAC project.

During the ReTRAC project time frame, the building housed offices for Granite Construction, which was the company overseeing ReTRAC. At the completion of ReTRAC, the property was used as the City of

Reno’s Police Evidence Facility. With the completion of the new Police Facility on Sutro Street, the property has been vacated.

The City of Reno is contemplating selling this property, which is the purpose of this appraisal. It is understood that over the years, the City of Reno has received various unsolicited inquiries. Engagement has been from developers and commercial real estate professionals; however, no pricing has ever been discussed, and the City of Reno’s response has been that they are awaiting Council direction.

LIMITING CONDITIONS, EXTRAORDINARY ASSUMPTIONS,

AND HYPOTHETICAL CONDITIONS

Except for the conditions noted below, the standard Limiting Conditions and Assumptions may be found in the Addenda of the report.

1) Per prior agreement with the client, this is a summary 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 (USPAP). As such, information is presented in a summarized format. The appraisal is for use by those individuals named within the introduction to this report with no other use or users than those noted intended by the appraiser.

2) The preliminary title report prepared for the subject parcel is included in the addenda. It is noted that some of the easements are blanket easements impacting other ReTRAC parcels, however, do not impact the subject parcel. In particular, exception 21 is a perpetual pipeline easement;

exception 22 is for a concrete drain pipe; and exception 24 is a pipeline easement; per confirmation with Ms. Nichols, these exceptions were created during ReTRAC as a corridor-wide net and do not exist on the subject parcel.

4 26-007

LIMITING CONDITIONS, EXTRAORDINARY ASSUMPTIONS,

AND HYPOTHETICAL CONDITIONS (Cont’d)

However, a new legal description for the subject parcel and three additional easements, not identified within the title report are/ will be applicable to the subject parcel. Included in the addenda are the following: (1) a new legal description for the subject parcel; (2) a legal description and depiction of a permanent easement for a storm drain containing about 5,895 sq.ft.

on the subject’s northeast corner; (3) the legal description and easement for the Union Pacific

Railroad ReTRAC wall, which is 15 feet wide and runs along the northerly border of the subject parcel (4,462 sq.ft.); and (4) the legal description and permanent easement for the Keystone

Avenue retaining wall (835 sq.ft.). It is, thus, an extraordinary assumption that the subject’s new legal description and three easements will be recorded in association with any transfer of the property. The easements will be reserved by the City of Reno for ingress/egress to the respective areas and/or along the rail line trench wall, Keystone wall, and storm drain for periodic maintenance.

3) Given the age of the building and varying uses over the years, it is an extraordinary assumption in this report that there are no major negative environmental conditions nor major structural issues impacting the property. However, if a current environmental assessment and/or analysis of the building improvements by licensed contractors and/or engineers reveal substantial issues, then the value estimated and marketability of the property could be impacted.

Report Format

The first section of the report provides a general overview of the residential and commercial markets along with an employment and population summary, as of the valuation time frame. The next section following provides a brief location, property synopsis, and valuation summary.

5 26-007

Area Map

REAL ESTATE MARKET SUMMARY - RENO/SPARKS

Single Family Residential Market

In terms of the single family market, according to the Sierra Nevada Realtors, at the end of March

2026, the median home price for an existing home in the Reno/Sparks and surrounding Washoe County market was $590,000. This reflect an approximate 3.5% increase over the median home price in

February 2026, which was about $570,000. The median home price one year prior for Reno/Sparks

Washoe County was $543,950 or about 8.5% less than the current median home value for the region.

The median home price reported in May 2022 at $615,000 for Reno/Sparks set an all time high for the area with this likely setting a peak for this time frame and reflecting a 23% increase over the prior year or May 2021. It is judged that the median home price will remain steady going forward given the recent slight increase in interest rates upon which to finance and other inflationary factors.

Multi-Family Residential Market

Like the single family market, trends for the multi-family market have shifted over the last few years.

According to the Johnson-Perkins-Griffin report, which surveyed approximately 31,939 units within

122 complexes in the Reno/Sparks market having a minimum of 80 units*, the overall vacancy rate as of the end of the 1st quarter 2026 was about 2.1%. This reflects a decrease over the vacancy rate at the end of the 4th quarter 2025 at 2.8% and also 3rd quarter 2025 at 2.4%. This quarter’s vacancy rate is also a decrease over that for one year prior or the end of the 1st quarter 2025 at about 2.7%.

The subject’s Downtown Urban apartment sub-market had an estimated 1st quarter 2026 vacancy rate of about 3.3%, which is a slight decrease over the 4th quarter 2025 vacancy rate of about 3.6%. The current vacancy rate for the downtown market is also significantly less than the same time last year at about 4.5% (1st quarter 2025). The market having the highest vacancy rate for the 1st quarter 2026 was the West Reno sub-market at 5.3%, while the sub-market having the lowest vacancy rate was the

Brinkby/Grove sub-market with a vacancy of just under 1% as of the 1st quarter 2026.

*The survey excludes affordable housing, student and senior housing projects, and covers projects that have reached a stabilized occupancy rate of at least 90%.

Over the last few years, there has been a steady upward increase in residential rents, market-wide, with historically low apartment vacancy rates. However, with the number of market rate apartments still being leased up, under construction and planned, it is judged that the market will see continued fluctuations and potentially flattening or some downward pressure on rents and absorption levels. If one were to include smaller complexes under the 80-unit size, we are seeing slightly higher vacancy rates for these complex sizes – some of which are the older product types. Offsetting this is an overall slow down in the new apartment construction pipeline, which could also lead to increasing rents and tighter

7 26-007 vacancy rates over the longer term. A significant issue in the Reno/Sparks region is the need for continued affordable rental properties.

As of the end of the 1st quarter 2026, the average rent was $1,798 per month for all apartment sub-markets. This reflects a slight increase over rents for the 4th quarter 2025 at $1,759 per month. The current average rent is greater than one year prior or the end of the 1st quarter 2025 when average rents were at $1,681 per month.

The subject’s downtown sub-market had an average rent of $1,756 per month, which is an increase over the rent at the end of 2025 at $1,740/month. The current average rent for the downtown sub-market is also an increase over the average for the same time last year at $1,664 (end of 1st quarter

2025).

The sub-market having the lowest average rent as of the 1st quarter 2026 was the Brinkby/Grove sub-market at $1,280 per month. The sub-market having the highest average rent as of the end of the 1st quarter 2026 was the East Sparks sub-market at $2,008 per month.

As a result of rent growth and tightened vacancy rates before, during and after COVID-19, the demand for multi-family land and “for sale” complexes had also been strong. Developers moved into the area with a large volume of multi-family complexes under construction in the area in the early

2020's through 2024. With high construction costs, development has tapered off with now 3 projects totaling about 904 units under construction. None of these are in the downtown sub-market. There are an additional 7 complexes totaling about 2,139 unit in the planning stages, as of the end of the 1st quarter 2026. Two of these projects are planned for the downtown area: the Revival with 300 units on the north side of East 2nd Street and University Way and the Riverside Drive Apartments with 123 units planned near the west end of Riverside Drive, being west of Keystone Avenue. However, with the increase in interest rates and high construction costs, some of the projects planned may not necessarily be built in the near term.

With increases in housing prices and rents over the last several years, the number of affordable rentals is diminishing. Given high construction costs, the majority of new complexes have been priced at market rates, being at the upper end of the rental range. Notwithstanding, there have also been land purchases and developments catered to low income households. Assuming capital is available in terms of regional assistance and bond type financing, we should see continued strong demand for parcels and/or projects geared toward developers of low income housing.

Notwithstanding, given the number of market-rate inventory that has and continues to come on line, rental concessions have now come into the market. According to Johnson-Perkins- Griffin, during the

8 26-007

1st quarter 2026, about 30.3% of apartment complexes in their survey offered concessions. This is a decrease over concessions offered as of the 4th quarter 2025 at about 38% of apartment complexes in their survey. It is noted that the 4th quarter 2025 was the highest level of concessions offered since since Johnson-Perkins-Griffin began tracking concessions at the beginning of 2019. Concessions offered during the 1st quarter 2025 at 37%, were the second highest level reported.

Concessions typically range from discounted move-in costs to reduced rents on a new lease. The most commonly found concessions are: one-time, up front discounts ranging from $200 to $3,500 with a new lease; between 1 and 2 months free with a new lease; and gift cards offered such as $500 + with a new lease. In addition to the market rate apartments surveyed, a number of privately owned student housing developments exist; however, these generally do not compete with the majority of apartment sub-markets.

In summary, over the last few years, there has been a steady upward increase in residential rents, market-wide, with historically low apartment vacancy rates. However, with the number of market rate apartments under construction and planned, at much higher rents, it is judged that the market will see continued fluctuations and potentially flattening or downward pressure on rents and absorption levels.

With these high price and rental levels, the market should see continued interest by developers of low income product.

Commercial Real Estate Markets. Other commercial real estate markets are experiencing tightening vacancy rates and increasing rents. With the on-set of COVID-19 in March 2020, the retail and office markets had been impacted early on with improvements since made in the retail market but now some instability in the office and industrial markets. The industrial market had been strengthening prior to

COVID-19 and was not negatively impacted by COVID-19 with a very low inventory of industrial product available for sale or lease over the last few years. However, with a great amount of industrial supply having been built and come on line in response to the low former supply during COVID, stabilizing industrial rents and higher industrial vacancy rates are now being evidenced. With inventory and demand for products potentially changing with tariffs placed by this administration, we may see more instability among all real estate markets and the economy.

Retail Market

With the onset of COVID-19, and particularly during the height of the pandemic in 2020, retail businesses and the retail vacancy rate had been negatively impacted with some vacancy rate increases and business closures. However, the Reno/Sparks retail market has made a resurgence and is now relatively stable with improvements in the market evident. Based on data researched by Kidder

Matthews Reno, the retail market showed a 1st quarter 2026 direct retail vacancy rate of 3.5%. This is down slightly from their reported 4th quarter 2025 direct retail vacancy rate of 3.9% and also down

9 26-007 from their reported 3rd quarter 2025 vacancy rate of 4.2%. The current 1st quarter 2026 vacancy rate is also lower compared to one year prior or the 1st quarter 2025 vacancy rate at 4.3%.

Colliers Reno, which also provides data on the retail market indicated a 4th quarter 2025 market vacancy rate of 5.2%. This reflects a decrease over the 3rd quarter 2025 vacancy rate of 5.7%. Colliers Reno additionally delineates the retail vacancy rates among the various sub-markets. The retail market having the lowest retail vacancy as of the 4th quarter 2025 was the Northeast sub-market with virtually no vacancies, but with a very small inventory of product. The retail sub-market with the highest vacancy rate was the Central/Airport sub-market with a 4th quarter 2025 vacancy rate of about 8.2%. The subject’s Downtown retail sub-market had a reported 4th quarter 2025 retail vacancy rate of about 6.2%, which reflects a decrease in the 3rd quarter 2025 vacancy rate for this sub-market at 6.6%.

The average asking rental rate for retail space reported by Kidder Matthews as of the 1st quarter 2026 was about $1.51 per sq.ft. per month on a triple net basis. This is the same as both the 4th quarter 2026 and 3rd quarter 2025, at $1.51 psf/month and also one year prior or the 1st quarter 2025 at $1.51 psf/month. However, the rent for the 4th quarter 2024 at $1.41 psf/month was less than current asking rents. Average asking rents reported by Colliers Reno as of the 4th quarter 2025 were $1.75 per sq.ft.

per month on a triple net basis. This compares to the prior quarter (3rd quarter 2025) average rents at

$1.67 per sq.ft./month and an average asking rental as of the 4th quarter 2024 at $1.62 per sq.ft./month.

Office Market

In spite of changing trends in the office real estate market, especially with more of a hybrid work schedule as a result of COVID-19, the Reno/Sparks office market is faring well. According to Colliers

Reno, the Reno/Sparks office market posted a 1st quarter 2026 vacancy rate of 8.8%. This compares to a slightly higher 4th quarter 2025 vacancy rate of 9.0% with the current vacancy rate being similar to the 3rd quarter 2025 vacancy rate of 8.7%. The current vacancy rate is significantly less than the overall vacancy rate one year prior or that for the 1st quarter 2025 at 9.4%.

If one includes forecasted vacancies in terms of lease turnovers and sublease space available, the 1st quarter 2026 availability rate is at 9.2%. This availability rate is lower than the 4th quarter availability rate at 9.5%. This availability rate is higher than the prior quarter’s availability rate at about 9.1% (3rd quarter 2025). The current vacancy rate is slightly lower than last year’s vacancy rate and availability rate as of the 4th quarter 2024 at 9.1% and 9.7%, respectively.

Colliers Reno, which also delineates the various office sub-markets, indicates the lowest 1st quarter 2026 direct vacancy rate for the Sparks sub-market at 3.8%. The market having the highest sub-market vacancy rate at the end of the 1st quarter 2026 was the West Reno sub-market at about 18.6%. The subject’s Downtown office sub-market vacancy rate as of the 1st quarter 2026 was at about 13.2%. This is similar to the 4th quarter 2025 vacancy rate, also at 13.2%.

10 26-007

According to Colliers, average asking full service rents for all sub-markets as of 1st quarter 2026 were at $1.88 psf/month. This is slightly higher than the average rents as of the 4th quarter 2025 at $1.83 psf/month. The market having the highest asking rents was the Downtown office sub-market at about

$2.22 per sq.ft./month, up from the 4th quarter 2025 at $2.08 per sq.ft/month. Other than small owner-user offices and the Renown Medical Office building in South Reno that was completed towards the end of last year, there has been no speculative new construction for office over the last year, which will continue to create a stable market.

Industrial

Per survey conducted by Colliers, the overall vacancy rate for industrial space in the Reno/Sparks market as of the end of the 1st quarter 2026 was about 12.5%. Factoring sub-lease space, the total availability rate as of the same time frame was about 13.5%. The first quarter 2026 vacancy rate was a slight increase over the 4th quarter 2025 vacancy rate at about 12.4%. However, the current (1st quarter 2026) availability rate is lower than one quarter prior at about 14.1% (4th quarter 2025). The

4th quarter 2025 vacancy rate was an increase over that for the 3rd quarter 2025 direct vacancy and availability rate of 12.0% and 13.7%, respectively.

The last several quarters’ vacancy rates reflect major increases over that for the 4th quarter 2022, when the industrial vacancy was at 1.4% along with increases over historically low industrial vacancy rates as of the 3rd, 2nd and 1st quarter 2022 vacancy rates in the 1% range.

From a historical perspective, the 3rd quarter 2020 industrial vacancy rate was the first time that the direct vacancy rate had fallen below 5.0%, since early 2019. As vacancy levels continued to decline in 2019 and into 2022, developers brought inventory to the market with about 4.25 million sq.ft. of new construction added in 2022 and over double that or about 8,996,000 sq.ft. of space added in 2023. New construction in 2023 was about 2.5 times greater than the 5 year average of approximately 3.5 million sq.ft. Total new construction for 2024 tapered off at about 2,565,616 sq.ft. with new construction as of the 3rd quarter 2025 at about 334,800 sq.ft., being significantly less than new construction during the prior quarter or 2nd quarter 2025 at about 2.4 million sq.ft. There was no new construction reported for the 4th quarter 2025 with total construction for 2025 at about 6,219,775 sq.ft.

Notwithstanding the decline in new construction, the cumulative new construction levels over the last several years have lead to increased vacancy levels, In general, more of the newly constructed space has been for large, bulk distribution developments as compared to smaller flex industrial properties.

Colliers, which also delineates various product type vacancy levels indicated a 1st quarter 2026 direct vacancy and availability rate for manufacturing properties at 4.8% and 6.5%, respectively, which is a decline over the 4th quarter 2025 direct vacancy and availability rate for manufacturing properties at a 6.2% and 7.6%, respectively. Colliers estimated vacancy rate and availability rate for flex product

11 26-007 type in the Reno/Sparks market for the 1st quarter 2026 was at 7.5% and 7.8%, respectively, which is slightly higher than that for the 4th quarter 2025 at 5.9% and 6.2%, considering the direct vacancy rate and availability rate, respectively. The delineated vacancy rate and availability rate for the warehouse/distribution market as of the 1st quarter 2026 was at 12.8% and 14.9% with the 4th quarter

2025 figures at about 14.1% and 16.1% for the direct vacancy and availability rate, respectively.

Upon delineating the various sub-markets, the market having the highest direct vacancy rate as 1st quarter 2026 was the North Valleys sub-market with a direct vacancy rate of 16.7% and an availability rate of 17.7%. The sub-market having the lowest vacancy rate for 1st quarter 2026 was the subject’s central and west sub-market with a direct vacancy rate of 4.8% and an availability rate of about 5.4%.

Asking rental rates for industrial spaces had correspondingly experienced significant increases over the last several years with average asking rents and effective rents having increased by approximately 55% from the 4th quarter 2021 at about $.59 psf/month to about $.91 psf/month for 4th quarter 2022.

However, average asking rents for bulk space in the market as of the end of the 1st quarter 2026 have decreased to $.78 per sq.ft. per month, which is just lower than that for the 4th quarter 2025 at $.79 psf/month, but similar to that for the 3rd quarter 2025 average rents of $.78 psf/month. According to

Colliers, average asking rates as of 1st quarter 2026 for manufacturing space were approximately $.85 psf/month, which is slightly lower than 4th quarter 2025 manufacturing space average rents at approximately $.89 psf/month triple net. The average asking rent for light industrial/flex space as of

1st quarter 2026 was $1.22 psf month, which is up from asking rents reported as of the 4th quarter 2025 at $1.20 psf/month.

It is likely that with this latest increase in new construction, higher vacancy rates and stabilizing rents that industrial development will slow. However, even with still good demand for the small industrial sector (i.e. non-bulk space), the continuing challenge in bringing newer and smaller flex/service industrial inventory to the market is the higher cost of new construction. That is, it becomes very difficult to “pencil” new construction at supporting rental rates. It is judged that the majority of planned construction will continue to be for large bulk distribution properties with more economies of scale achievable. Like other market, one of the other major factors which is also impacting new construction and purchases of industrial properties in the area is the availability of capital and also the level of interest rates.

Furthermore, it is noted by industrial brokers that upon coming off COVID, there was some “right-sizing” among industrial tenants/users with some sub-lease space that has remained on the market.

Brokers with whom I spoke have indicated that sub-lease space is typically leased or offered at 50% of the original contract rent. This sub-lease space availability, although diminishing, is also impacting the current industrial market. With inventory and demand for products potentially changing with tariffs, 12 26-007 we may see more sub-lease space in the market along with more instability. However, these factors could likely contribute to a diminished industrial construction pipeline, as currently being evidenced, which should stabilize the market. Notwithstanding, continued uncertainties in the economy and tariffs will impact the stability of the industrial market.

Unemployment

According to Nevada State Department of Employment, Training, and Rehabilitation (DETR), the unemployment rate in the Reno/Sparks Metropolitan Statistical Area (MSA) at the end of February

2026 was 4.6%. This is a slight decrease over that for January 2026 at 4.7%. The February 2026 unemployment rate is also a decrease over that one year prior or February 2025 at 4.9%.

As of the end of February 2026, DETR reported an unadjusted unemployment rate for the State of

Nevada at 5.5%. This is a slight decrease over that for January 2026, reported at 5.6%. The February

2026 Nevada unemployment rate is slightly higher than that for one year prior or February 2025 at

5.4%. The fluctuating unemployment rate for the State of Nevada, as a whole, over the last few years had been impacted by the casino closures, re-opening and decreased tourist activity in both Las Vegas and Reno early on in the pandemic. However, now with tariffs and other world events, especially for travelers from out of the country, demand may change significantly for tourism. Las Vegas had been harder hit by COVID but is recovering somewhat with the February 2026 unemployment rate of about

5.8%, which is the same as that for January 2026. The February 2026 unemployment rate is slightly less than one year prior or February 2025 of 5.9%.

The unemployment rate, unadjusted, for the United States reported at the end of February 2026 was at 4.7%, which is the same for January 2026. However, the February 2026 unemployment rate for the

U.S. is slightly higher than that for a year prior or February 2025 at 4.5%. With impacts from tariffs, not fully known, we may see further instability in the unemployment rate as companies may need to change workforce needs. As noted, this could be particularly uncertain for the tourism industry, relying on foreign travel.

13 26-007

Area Population Summary

The chart below highlights the historical population growth in Washoe County, Reno, and Sparks for the past 10 years, as reported by the Nevada Department of Taxation.

Area/Date* 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Washoe Co.

Change Prev. Yr.

448,316 1.4%

451,923 0.8%

460,237 1.8%

469,801 2.1%

473,606 0.8%

485,113 2.4%

501,635 3.4%

508,759 1.4%

513,854 1.0%

519,471 1.1%

Reno Change Prev. Yr.

242,158 1.5%

244,612 1.0%

248,806 1.7%

255,170 2.6%

258,230 1.2%

264,318 2.4%

274,129 3.7%

277,517 1.2%

281,015 1.3%

283,378 0.8%

Sparks Change Prev. Yr.

95,726 2.3%

96,928 1.3%

100,140 3.3%

102,543 2.4%

103,230 0.7%

107,489 4.1%

111,735 4.0%

113,816 1.9%

115,240 1.3%

117,116 1.6%

*All figures are estimated for July 1 of each year.

From an historical perspective and although not on the chart above, both Reno and Sparks showed positive increases in population from the early 2000's through 2008. This was a result of a variety of factors including: employment opportunities, the attractive climate, and central location of the area.

From 2008 to 2009, the population declined for Washoe County and Reno; however, since 2009, the population has generally increased, albeit slowly early on due to the overall weakness in the economy and down turn in the real estate market that had occurred. With the improved economy and market from

2014 and on, the population growth has gradually improved. Particularly higher rates of population increases have occurred from 2020 through 2022 for all regions with a modest increase over the last year or from 2023 to 2024.

Population figures available (July 2025) show Washoe County’s population at 519,471, which is a

1.1% increase from the previous July 2024 figure, with the half million threshold broken for the first time in 2022. The 2025 population allocated to the City of Reno at 283,378, showed a .8% increase over that for 2024 and with the percentage gain slowing down, compared to prior years. The City of

Sparks broke the century barrier in 2018 with a population of 100,140. Although a slow down in growth occurred from 2019 to 2020, significant increases during 2021 and 2022 at 4.1% and 4.0%, respectively occurred for Sparks with the current population having increased by 1.6% and estimated at 117,116 for 2025. The recent population growth in Sparks indicates a strong economy and market, with this growth reflecting more new housing developments constructed in the City of Sparks. Overall, given positive economic impacts expected for the area, population is projected to continue to increase at a steady rate.

14 26-007

Summary

The real estate market and economy have historically been cyclical with steady upward growth in new jobs, population and price increases in all real estate market sectors experienced over the last several years. With new construction for primarily the industrial sector, prices have leveled off. Notwithstand-ing, with continued increases in costs to build coupled with the inability of region-wide wages to keep up with housing prices, we may be approaching somewhat of a leveling off in the market. Further potentially adding to this market instability are interest rate levels and tariff impacts.

However, given the positive attributes of the area, especially related to the area’s tax structure and location, the overall market should continue to see improvement over the long term.

15 26-007

Location Map

LOCATION SUMMARY

The subject is located in the western portion of the City of Reno, with the parcel situated on the east side of Keystone Avenue, the west side of Vine Street and immediately south of the ReTRAC railroad line. The subject’s general market area is bound by Interstate 80 to the north, Arlington Avenue to the east, and McCarran Avenue to the west. The Truckee River forms the subject’s general southerly market boundary.

The subject is situated approximately .7 mile west from Reno’s downtown casino core and about 1 mile northwest from the financial district. Downtown Sparks is located about 5 miles east of the subject with the Reno Tahoe Airport situated about 5 miles southeast from the subject. The entrance to the

University of Nevada - Reno campus is located about 1.4 miles northeast. Access to Interstate 80 is via the Keystone Interchange, located about ½ mile to the northwest. Heading further west along W.

4th Street about 2 miles is the McCarran Boulevard interchange to Interstate 80. Stoker Avenue, which is situated about 1.2 miles west from the subject and perpendicular to West 4th Street, provides access to the older northwest Reno residential area.

The traffic count along Keystone Avenue, per station #0310537, which is just north of the railroad line and 300 feet south of W. 4th Street showed a Annual Average Daily Traffic (AADT) for 2024 of

22,400. This is a slight increase over that for 2023 at 22,200 but less than that for 2022 at 24,100

AADT. However, it is estimated that the counts for 2025 (not yet available) will be higher than the current amounts due to the construction closure of the Arlington Avenue B ridge that crosses over the

Truckee River with Keystone Avenue being the next route over the river to the west.

Uses along West 4th Street near the subject and west of Keystone Avenue are interspersed with industrial along the south side of West 4th Street with a mix of residential, commercial and light industrial on the north side of West 4th Street. Uses along West 4th Street and east of Keystone Avenue are more commercial in nature, interspersed with multi-family and casino uses. Uses immediately surrounding the subject parcel consist of the following:

West: Across Keystone Avenue from the subject is a 3.26 acre parcel, which is now under development with a 90,000 sq.ft., two-story data center, developed by Centra and to be known as RNO2. This parcel had formerly been owned by the City of Reno and originally included an approximate 5,304 sq.ft. building connected to a 6,940 sq.ft. building plus an additional 6,940 sq.ft. of mezzanine space. The property had been purchased prior in

June 2022 for $4,000,000 with the former owner, having put about $330,000 into the building and site for clean-up and maintenance. The property was put on the market for sale about two years prior to its March 2025 closing and had been marketed with existing building improvements, however, with the majority of value allocated to the land. The

17 26-007 front, roughly 55% of the parcel along Keystone Avenue is zoned General Commercial with the westerly portion of the parcel zoned Industrial. The master land use for the site is Suburban Mixed Use.

The property sold all cash to the Boston-based owner in March 2025 at a price of

$6,627,000 with all value allocated to the land for a price of $46.67 per sq.ft. of underlying land area (before demolition costs).

In the due diligence process, with the escrow time lasting about 9 months, many meetings were held with the City of Reno regarding the proposed use. One of the main positives, which contributed to the approval of the site for a data center, was the fact that the building will be partially air cooled (versus all water cooled). Based on permit data from the City of Reno, a permit value of approximately $18.8 million was submitted for the shell building (about $209 psf of building area); and about $38.4 million was the reported value for the data center build-out. The data center is scheduled to be completed sometime this year.

Following this data center parcel is storage/ warehouse building on 1.4 acres having

Industrial zoning with a land use of Mixed Employment. Heading further west, uses become less intensive, due to the termination of Dickerson Road, the railroad right-of-ways, and the meandering Truckee River.

South: Immediately south of the subject parcel is a 20 foot wide alley, that extends from Keystone

Avenue to Vine Street and separates the subject parcels from parcels to the south. The alley also extends southerly to W. 2nd Street. South of this alley and fronting Keystone

Avenue, is a 7,000 sq.ft. parcel having the same zoning as the subject and owned by an entity of the billboard company, which has owned the parcel since 2007. The parcel has a billboard on site. Just south of this parcel is a 7,000 sq.ft. parcel that has an older residence fronting Keystone Avenue and two, new duplexes in the rear. Heading south along Keystone Avenue are several older homes.

To the immediate south of the subject along Vine Street is a .32 acre parcel, developed with a 10,880 sq.ft. industrial building that is owned and partially occupied by the Guidara

Family who own Pure Water Systems of Nevada. There are also a few spaces leased.

Although the building was constructed in 1973, the interior and exterior facade was significantly remodeled with additional fencing added.

18 26-007

East: Across Vine Street to the east is a 2 + acre parcel that was formerly owned by the City of Reno and purchased by a low income housing developer. The property runs along the entire length of ReTRAC and has since been developed with a 205 unit, 5 story apartment complex, known as Vintage at Washington Station. Following this parcel are various parcel owned by entities of Jacob Entertainment.

North: ReTRAC runs along the subject’s northern property line. On the north side of the rail line is a 1.15 +/- vacant parcel that is owned by Reno Real Estate Development, LLC, an entity of Jacob’s Entertainment. This parcel has the same zoning as the subject, is fully fenced and is used as a staging area for construction activities. This parcel joins another parcel to the northeast that this same group purchased in 2021 with improvements since demolished.

Immediately north of the above vacant lot and on the southeast corner of W. 4th Street and

Keystone is a .77 +/- acre parcel that is improved with a Chevron Station and conve-nience market. This parcel as also purchased by Reno Real Estate Development, LLC in

2023.

Situated on the north side of ReTRAC and southwest corner of Keystone Avenue and W.

4th Street is a Maverik convenience store and fueling station. Maverik has zoning of

Mixed-Use Urban, with a land use of Urban Mixed Use (UMU)

Trend of Area

Situated a few blocks northeast of the subject and on the southeast corner of the I-80 Interchange and

Keystone Avenue is the newly re-developed West End Commons development (formerly named

Keystone Commons). The original 10.56 +/- acres, which had several old and out-dated commercial buildings has been developed by S-3 Development with new restaurants and fast/ casual food establishments, including Chipotle, Starbucks, Firehouse Subs, In-N-Out Burger, and a Cracker Barrel

Restaurant. On the east side of the development and encompassing about 4 acres is a planned 296-unit apartment complex, which had been pre-sold, but with construction not yet underway.

Activity along blocks east of the subject and east of Keystone Avenue has been positive with the multi-million dollar re-development of the former Sands Regency Hotel and Casino by Jacobs Entertainment.

The entity of Jacobs Entertainment has acquired over 50 additional parcels in the vicinity of W. 4th

Street, W. 5th Street, Arlington Avenue, 3rd Street, and Ralston Street. The former Sands Regency, now re-branded as the “J” Resort with 750+/- hotel rooms, is the focal point of the Reno Neon Line

Development, which expands several blocks along West 4th Street and with several blighted motels having been demolished along with renovation of apartments and some affordable housing units added.

19 26-007

Adjoining the hotel is the newly completed Glow Plaza and planned Festival Grounds. The Gold Dust

West Casino, also owned by Jacobs Entertainment and located on the northwest corner of W. 4th Street and Vine Street, anchors the general west side of the Reno Neon Line District. Recently announced and now underway is the construction of several new youth sports field that are located on the at the site of the old Bonanza Inn site, which is on the 200 block of West 4th Street. The addition of these fields will bring more tourism and activity to this area of Reno.

Both University of Nevada officials and City of Reno officials have been working together to link the

City closer to the University by creation of the “Gateway District” which is the area south of the

University campus to Eighth Street. In addition, there are several large multi-family projects both new, under construction and planned near the University to address the growing student population. Market rate apartment complexes are also under construction and planned for blocks east of Virginia Street and south of Interstate 80.

Notwithstanding all of these ameliorations and planned projects for the downtown and surrounding areas of Reno, the subject location is still a transitional area, and other than the new data center, has not seen major new development within the immediate blocks of the subject. Some of this has been due to the natural barriers (Truckee River and foothills) and transportation barriers (railroad line and I-80), which has limited expansion. Unfortunately, there are also homeless encampments interspersed along the railroad tracks. However, overall, the subject property is well located with good access to downtown

Reno, northwest residential areas, the University of Nevada District and nearby Interstate 80.

In summary the subject parcel is well positioned in west Reno and within close proximity to areas in downtown Reno undergoing major re-development. These developments will create continued demand for supporting light industrial and commercial uses in surrounding areas such as the subject area, assuming the market and economy continue to grow.

20 26-007

SITE DATA

Address: 264 Keystone Avenue, Reno, Nevada

Parcel No.: Washoe County Assessor’s Parcel Number (APN) 011-350-30.

The APN map was shown on the prior page for informational purposes; the revised map with updated site area was also shown prior.

Legal Description: A copy of the legal description for the subject property is included in the addenda within the Preliminary Title Report, prepared by Ticor Title, dated

October 17, 2025. However, a new legal description, which will be recorded with a transfer of the property is also included in the addenda and will be referenced for the site area and updated dimensions.

Parcel Shape/ Size: The subject is rectangular in shape with 179.63 feet of frontage along

Keystone Avenue and 179.67 feet of frontage on Vine Street with a east-west dimension of 297.4 feet along ReTRAC and 299.7 feet along the southern boundary line. According to the new parcel boundaries, the gross site area is about 53,632 sq.ft. or 1.23 acres.

Topography/

Drainage: The parcel has a gentle slope downward from Keystone Avenue to the east.

This slope was apparently dictated with the construction of Keystone Avenue.

The topography for the balance of the parcel is generally flat.

Accessibility/

Visibility: Per the dimensions above, the subject parcel has very good frontage and visibility along Keystone Avenue and Vine Street. The parcel is accessed by one curb cut for ingress/egress along Keystone Avenue and several curb cuts along Vine Street, providing through access to Keystone Avenue and ingress/egress to the two fenced areas, accessing the rear warehouse doors.

Keystone Avenue is a two-way, four-lane street with a center turn lane and sidewalks on both sides of the street. Vine Street is a two-way, four lane street with sidewalks on each side of the street. An alley is situated on the subject’s south border, providing through access between Keystone Avenue and Vine

Street. The alley also tees off near the middle of the subject parcel to West 2nd

Street.

Utilities: Utility providers to the parcel are as follows:

Electricity and Natural Gas - NV Energy

Water - Truckee Meadows Water Authority

Sewer - City of Reno

23 26-007

Flood Zone: Per FEMA Flood Map #32031C3039G, dated 3/16/2009, the parcel is within a flood designation of Zone X-unshaded, which is not in a flood prone area.

Easements: Per the assumptions at the beginning of the report, if the underlying land is transferred to any third party, the City of Reno will reserve three easements, as follows, with legal descriptions and depictions of said easements included in the addenda.

Storm Drain Easement: The storm drain easement is located on the northeast corner of the subject parcel and contains 5,895 +/- sq.ft.

ReTRAC Wall Easement: This easement is 15 feet wide and runs along the northerly border of the subject parcel and trench wall, containing a total area of 4,462 +/- sq.ft.

Keystone Retaining Wall Easement: This is an oblong easement running along

132.51 feet…