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4 <br /> SECTION I <br />PROJECT INFORMATION <br /> <br /> <br /> <br />Related Bristol at 3600 South Bristol Street September 27, 2023 <br />Land Residual Value Study Report <br /> <br />www.FinanceDTA.com <br />From the CoStar site, DTA obtained information about the market for both County and <br />multifamily products within a 2-mile radius of the Project site. In this Report, we will refer <br />to the area within 2 miles of the site as the “2-Mile Zone.” <br />The model assumes multifamily rental units <br />will be delivered to the market beginning in <br />March 2027 and ending in May 2035. There <br />have been few apartment projects opened in <br />the 2-Mile Zone in recent years, and rental <br />vacancies in an area within the 2-Mile Zone <br />are below 2.0%. We concluded that the rental <br />units will be absorbed as they are delivered to <br />the marketplace. <br />It is also important to note that the 2-Mile <br />Zone's market area cap rate for completed <br />multifamily project sales is about 4.0%, as <br />provided by CoStar, a data information company that provided the market information DTA <br />evaluated for the NAV study. Please note that forecasted multifamily cap rates are not <br />projected to increase above 4.0% in the foreseeable future. That said, while cap rates for <br />multifamily projects in California and across the United States have been increasing as a <br />result of generally higher 10-year Federal government or agency bond (“Government <br />Bond”) interest rates, the impact has not been experienced in the City’s 2-Mile Zone. <br />The model assumptions do not include price appreciation or cost inflation to comply with <br />existing underwriting standards. <br /> <br />Figure 2: Multifamily Market Cap Rate <br />Exhibit 10 <br />  <br />  <br />City Council 22 – 489 9/17/2024