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VI. CONCLUSIONS AND LIMITING CONDITIONS A. Opinion of Value/Conclusion The previous section of this report discussed the approach to determining the value of the interests • being conveyed to the Developer. Based on this analysis, it is our opinion that as of July 2000, the fair reuse value for the interest w be conveyed to the Developer, free and clear, is 52,500,000, subject to the terms and conditions of the DDA, specifically the actual development costs and rents. 13. Statement of Limiting Conditions and Assumptions The conduct of any valuation is necessarily guided, and its results influenced, by the terms of the assignment and the assumptions that together form the basis of the valuation. The following conditions and assumptions, together with lesser assumptions embodied in this report, constitute the framework of our analysis and conclusions. The estimate of reuse value for the interests being conveyed to the Developer assumes compliance with the following: 1. The Agreement requires the construction of a first -class office project with approximately 203,000 sq.ft. of Gross Building Area (GSA) of office space in three 3- and 4 -story buildings and a parking deck of approximately 39,000 sq.ft., in accordance with the Scope of Development in the DDA and within the time frame specified in the Agreement. The DDA requires that the Developer construct a specific Project in a single phase. The Project incorporates architectural and site upgrades and building materials of higher quality and cost than would typically be found in a standard office complex at this location in San Leandro. The Developer is also required to construct a parking deck and to fund the cost of high quality site amenities, including a prominent landscape feature at the corner of San Leandro Boulevard and Davis Street, a secondary plaza between buildings A and C, and extensive parking lot landscaping on the Site. 2. The Project will include a ground -floor restaurant of 2,700 sq.ft. of net rentable area (NRA). Should the Developer fail to lease the 2,700 sq.ft. restaurant space within the time frame specified, then the reuse value will increase by 5250,000. 3. The Developer is obligated to pay all governmental fees and assessments, including the underground utility conversion fee and the City of San Leandro Fee for Street Improvements (DFSI). a9s Keyser Marston Associates, Inc. 19096.0261002- 001.doc Page 17