Agda Pkt 2025.12.22 Joint SA PFA

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Appraisal: APN 053-182-030, S.E. Corner of Maple & Lathrop Streets, Redwood City, Calif.Page 13 2025CNA112 Locally, the most visible impacts have been layoffs in the tech sector and a large decline in real estate investment sales activity. Downtown San Francisco suffered the most, with the exodus of tech workers part of a broader narrative that involves a fall in residents and visitors amid an increase in crime, homelessness, and drug abuse. Low economic activity and social problems impacted the viability of retailers, restaurants, and hotels. Recent actions by the City of San Francisco appear to have an impact, increasing activity levels and translating to some signs of growth in demand for office and multifamily rentals. Total employment remains slightly below its prepandemic level. Flexible working practices make it unclear how many San Francisco businesses employees live in the metro area. After falling to a 10-year low of 2.3% in 2022, the unemployment rate has increased to 3.7% currently. Over the past year, growing investment in the AI technology sector has seeded what may be San Francisco s next period of growth. The city is the leading location for startups and expanding AI companies. This already positively impacts office leasing and should raise demand across other real estate sectors in the quarters ahead. C. Retail Market Conditions U.S. Retail Marketbeat for the first quarter of 2025, notes that The U.S. consumer economic backdrop was solid heading into 2025 and there remain many positive forces such as healthy household balance sheets, continued job growth and positive wage gains. But trade policy has shifted abruptly, presenting near-term headwinds to consumer spending and the retail sector more broadly. Tariffs placed on imported goods have been implemented at a dizzying pace, and while there is little clarity on the stable-state size and scope of the tariffs, the policy shift is already impacting the economy. Tariffs impact the retail sector in several ways: 1) Retailers pay higher costs for imported goods and materials, reducing profit margins; 2) Consumers face higher costs for retail goods, impacting the mix and amount that they spend; 3) The uncertainty surrounding trade policies complicates operational planning, potentially reducing conviction about strategic investments. While some retailers may be able to mitigate cost increases through negotiations with suppliers, higher 8.K. - Page 60 of 105 310