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PO Box 2710 | Victorville, CA 92393Ph 760.951.5111 | Fax 760.951.5113

www.TheBradcoCompanies.com

Presented by:

Joseph W. Brady, CCIM, SIORPresident

The Bradco Companies

Harnessing Information

Presented to:

“Bringing the High Desert into the 21st Century”

California Inland Empire Chapter 57 of the International Right of Way (I.R.W.A) Fall Conference

October 17, 2008 at 12:45 p.m.



Bringing the High Desert into the 21st Century

• What’s Driving the Economy?• Affordable Housing (New, Re-sales)

• 2008 annual total single family re-sales (DQNews.com)

• Rental Housing Overview ~ Bluestar Properties

• Measure I (the importance to the High Desert and San Bernardino County)

• Land, Labor and Population Growth

• Rail (SCLA)

• Southern California Logistics Airport (SCLA)

• Assessing the Commercial Real Estate Market• Inventory Base

• Availability of Inventory Base

• Planned & Under Construction



What’s Driving the Economy?

Affordable Housing

• Currently 64% of High Desert residents can afford a median priced resale home of $180,571*

• Statewide affordability is 44% (June 2008)*

• Median Resale Home Price Comparison:

High Desert - $180,571 (June 2008)*

Statewide - $368,250 (June 2008)*

Inland Empire - $261,981 (June 2008)*

United States - $196,300 (First Quarter 2008)**

*Victor Valley Association of Realtors | California Associates of Realtors “Trends” Report (July 2008)

**National Association of Realtors (First Quarter 2008)

Where are we Today?



San Bernardino County

New HousingTo put things in their true perspective, the average weighted price for a new subdivision home in the San Bernardino County market represents the comparison difference of the High Desert is as follows:

The $64,000 QuestionThe $64,000 Question:Will the High Desert continue to average over $270,000 for the rWill the High Desert continue to average over $270,000 for the remainder of 2008?emainder of 2008?

$271,125$271,125$433,737

$687,266

$417,969

$500,086

July 2008

$116.02$116.02$168.77

$186.19

$143.21

$184.74

Per sq. ft.

$322,817$322,817$449,579

$768,580

$512,920

$617,973

May 2007

$136.84 $136.84 $184.11

$208.91

$174.62

$218.84

Per sq. ft.City

Victor Valley Victor Valley San Bernardino/Colton

Rancho Cucamonga/Upland

Fontana/Rialto

Chino/Ontario

New Housing (July 2008)



Single-Family Total Residential SalesVictor Valley / San Bernardino County 2005 - 2007



Rental Housing Overview“THE CHANGING DYNAMICS OF REAL ESTATE IN THE VICTOR VALLEY”

(Trends and statistics in Residential & Apartment Rentals)

Summary of Product Inventory:

CITY BUILDING SIZE # OF TOTAL UNITS

Adelanto 5-14 Units 8515-50 Units 74751-100 Units 0101- 425 Units 0 832 Units

Apple Valley 5-14 Units 97715-50 Units 16551-100 Units 0101- 425 Units 0 1,142 Units

Hesperia 5-14 Units 39815-50 Units 64551-100 Units 58101- 425 Units 439 3,261 Units* 175 units under construction

Victorville 5-14 Units 34515-50 Units 39451-100 Units 482101- 425 Units 2,040 1,540 Units* 800 units under construction

6,775 Units* Not included in totals. All data provide by Data Quick Information / Blue Star Properties



Measure I

Cal Trans and SANBAG involvement with the economy: (a) Measure I. Voters approved a 1/2 cent sales tax in 1989 (20-year bond). Tax expires 2010.

Since 1989, 3,000 local road projects, 332 freeway lane miles within San Bernardino County including the Metro Link train system, expanded bus service, new Route 210, new Route 71, Interstate 10 carpool lanes, Route 60 carpool lanes, etc.

Out of the $1 billion dollars that has been raised from the ½ cent measure, nearly $137.7 million has been allocated for the High Desert Region (Victor Valley $107.8 million and Barstow/Newberry Springs $29.9 million).

Out of the $6 billion ½ cent sales tax (2010) will ensure nearly $1 billion in improvements over the next 30-years within the High Desert Region.

Under the new program 70% would be for local streets and roads, 25% would be used for major local highways and freeways, 5% for senior/disabled transit and $250 million to fix the Cajon Pass.

A Major Impact to the County and the High Desert



Measure I

Widening of I-15 with additional interchanges

Additional lanes and safety improvements to Highway 395

Safety and traffic flow improvements to Routes 18, 138 and 330

New east-west roadways to relieve traffic congestion on Bear Valley Road

Development of the San Bernardino County portion of the new High Desert Corridor

Improvements to the Cajon Pass

Additional lanes and improvements to Route 58

Local street and road improvements

Expanded special transit services and continued low bus fares for seniors and riders with disabilities

What it Means for the High Desert



Current Challenges with Regional Transportation

Development Along Interstates 15 and 215• Over the next few years, more than ±13,300

new homes, condominiums and apartments will be built along the northern portion of Fontana between the 15 and 215 Freeways.

• Now under construction is “Rosena Ranch.”• Developed by Lennar Homes (±387.0 acres

for ±2,081 homes).• Future portion of the development include:

– ±43.4 acres commercial;– ±21.0 acres community park/swim

center;– ±8.0 acres community park;– ±10.0 acres elementary school;– ±49.5 acres (319 dwelling units).– ±75.0 acres open space.

• The Arboretum Specific Plan (Fontana) will include ±3,526 units on ±458.0 acres.

The Problem:• In 2005, ±132,000 vehicles traveled on Interstate

15 near Sierra Avenue.• During rush hour, ±9,900 vehicles an hour pass

this intersection.• By 2008 Cal Trans estimates the daily traffic

will reach nearly ±137,000 vehicles per day.• By 2020 traffic will increase to nearly ±172,400

vehicles per day and ±13,100 vehicles will pass the Sierra Avenue off ramps per hour.

The Solution:• Contact your City Councilman, Board of

Supervisors, Congressmen and encourage them to come up with a faster solution to this growing traffic problem.

I-15 / 215 Interchange



• Northwest Pipe Company / Construction: 390• Cabo Yachts: 350• Adelanto School District: 233• Fiber Care Baths: 172• Speedy-Cut: 165• National/Arnold: 145• Apex Trucking: 130• Molded Fiber Glass Company West: 130• Commercial Products: 130• Safe Way Sign: 70• LAWP: 70• H. Olsen Distribution (nearing completion): 50

The City of Adelanto

• Incorporated: December 22, 1970• Elevation: ranges from 2,880 ft. to 3,100 ft. of

influence extending to 77 square miles• Adelanto means “to go forward” or “to

progress” in Spanish• Minor League Baseball Team The Mavericks

in 18th Season in 2008

Major EmployersGeneral Information

Overview



General Characteristics• Total Population (2008 YTD): 28,121**

– 55% Increase Since 2000• Total Population (2000): 18,130**• Male Population: 9,698 (53.5%)*• Female Population: 8,432 (46.5%)*• Median Age: 26.9*• Average Household Size: 3.53*• Housing Units 2005: 5,547 • Owner / Occupied: 3,008 (63.8%)*• Renter Occupied: 1,706 (36.2%)*• Vacant Housing Units: 833 (15%)*• Labor Force: 6,500• Unemployment Rate: 14.6%

The City of Adelanto

Social Characteristics• High School Graduate or Higher: 67.1%*• Bachelor’s Degree or Higher: 5.9%*

Economic Characteristics• Median Household Income: $31,594**• Median Home Price (July ‘08): $115,000***

↓ Down 50.1% from Aug ’07***

Fast Facts

* U.S. Census Bureau, 2005 American Community Survey** State of California Dept of Finance (Population Estimates for Cities, Counties and State 2001-2008)*** Source: Data Quick / DQNews.com (Aug 2008)



The City of AdelantoEconomic Development

• Adelanto Detention Center (ADC)o In early May 2007 the San Bernardino County Board of

Supervisors approved an additional $25 million to add multi-level pods to the ADC expansion in order to create 500 more beds in the detention center.

o The total Phase 1 expansion will cost approximately $11 million and will add 912 extra inmate beds.

o After both phases are completed there will be approximately 2,074 beds.

• Adelanto Gateway Logistics Centero AMB Property Corp, recently acquired 400 acres across

from Southern California Logistics Airport, the south side of Air Base Road. Plans to break ground in 2008 on 1.5 million sq. ft. of industrial space. The project will feature nearly 7 million sq. ft. of warehouse distribution space. Larry Cochrun is the director of development for AMB in Los Angeles.

• Target Center (anticipated opening no later than 2010)• Hanson Structural Precast Pacific

o Texas firm purchased ±80-acre site at Koala & Holly Road.

o Largest manufacturer of structural precast concrete products in California.

o Will create approximately 100 jobs.o Estimated Cost: $35,000,000.o Expected Completion: First Quarter 2008.

• Adelanto Business Parko 12 buildings of industrial condos located at Adelanto

Road & Cassia Road.o Recently expanded facility to accommodate 300

employees. • AMB Corp

o AMB Property Corp, one of the world’s largest developers of industrial properties has recently requested the City of Adelanto fund $55.7 million of infrastructure to build an industrial center that could employ up to 4,000 people. That is designated for “Adelanto Gateway Logistics Center on 400 acres across the street from Southern California Logistics Airport. Total improvements would run $79.9 million.



The City of AdelantoAnnexations



• Apple Valley Unified School District: 1,787• Wal-Mart Distribution Center: 1,512• St. Mary’s Medical Center: 1,254• Wal-Mart: 362• Target Stores, Inc.: 210• Stater Bros. Markets: 175• Apple Valley Christian Centers: 171• Albertson’s: 131• McDonald’s: 114• Century 21-Fairway Realty: 102• Town of Apple Valley: 90

The Town of Apple Valley

• Incorporated on November 14, 1988.• Total Size: 190.7 km (73.6 square miles)• Elevation: 2,900 feet above sea level.• The Town of Apple Valley’s destiny was shaped in 1945 by Newton T. Bass and J.W Westland, two old wild catters, whose efforts developed Apple Valley into the high desert’s premiere residential community.

• Apple Valley was home to Roy Rogers and Dale Evans whose museum was first established in 1967 before the museum was relocated to Victorville in 1976. Since 2003 the museum has been in Branson, Missouri. Apple Valley is the final resting place for both Roy Rogers and Dale Evans.

• As of December 15, 2007, over 4685 single family and 330 multi-family units are in the planning stages with an additional 2,132 units proposed.

Overview

General Information Major Employers




– 29% Increase Since 2000• Total Population (2000): 54,239**• Male Population: 36,796 (49.01%)*• Female Population: 38,279 (50.9%)*• Median Age: 35.7*• Average Household Size: 3.09*• Labor Force: 32,441*• Housing Units 2006: 25,099*• Owner / Occupied: 17,464 (69.58%)*• Renter Occupied: 6,664 (26.50%)*• Vacant Housing Units: 971 (3.86%)*


Social Characteristics• High School Graduate or Higher: 84.9%*• Bachelor’s Degree or Higher: 15.4%

Economic Characteristics• Median Household Income: $55,429*• Average Household Income: $50,909*• Median Home Price (July ’08):

Zip Code 92307: $157,000**↓ Down 38.4% from Aug ’07

Zip Code 92308: $135,000 ↓ Down 51.5% from Aug ’07

Fast Facts





• Northwest Corner of Bear Valley & Apple Valley Roads Mojave River Crossings (±163,000 sq. ft.): Home Depot – Now Open, Quizno’s and Starbuck’s Apple Valley Towne Center (±258,000 sq. ft.) – Now Open!

• Southwest Corner of Bear Valley Road & Apple Valley Roads:Jess Ranch Marketplace is being expanding from ±134,000 to ±667,000 sq. ft., which covers ±23.0 acres.

- Phase 1 (±85,000 sq. ft.): Target, 99 cents only, Staples, Applebee’s, PFF Bank & Trust, Panda Express, Nubi’s Yogurt, Game Stop, Oggie’s, Automobile Club of California – Now Open!

- Phase 2 (±367,000 sq. ft.): WinCo Foods (±94,00 sq. ft.), Mervyn’s (±80,000 sq. ft.), PetSmart, Rite Aid, Western Dental, Golden Chopsticks, Verizon, Big 5, Famous Footwear, Fashion Bug, Lane Bryant, Payless, Kirklands, Carvel, Chipotle Mexican Food and Dress Barn– Now Open!

- Phase 3).(±383,000 sq. ft.): 12-Screen Cinemark Theatre, Best Buy, Bed, Bath & Beyond, Red Robin, Jack in the box and a 24-hour Fitness – Under Construction (Completion Mid Year 2009)

• Hwy 18 & Dale Evans Parkway:Apple Valley Commons: ±750,000 sq. ft. of retail space including: Wal-Mart Super Center (±250,000 sq. ft.), Super Target, Lowe’s, Union Bank of California and Civic Center Park.Super Target - Apple Valley scored the first one in California – Now Open!

The Commercial Boom



• Bear Valley & Central Roads:The Ultra Star Cinemas: Located at 22311 Bear Valley Road in Apple Valley finally opened on Thursday, December 20, 2007. The 14 screen cinema has approximately 2,600 seats and movies will be shown using digital technology, as apposed the 35-millimeter film shown at most theatres – Now Open!

• Apple Valley Road / North of Hwy 18:Spirit River Center, a ±35,000 square foot retail and office project located on Apple Valley Road just north of Hwy 18 recently opened. The property features a pedestrian walkway. The Apple Valley Chamber of Commerce in located in the new building. Rents start at $2.25 per square foot per month NNN.

• The MansionApple Valley approved this project in mid-November. It consists of 240 independent-residential units, 56 villas, 37 assisted-living units and 16 skilled nursing beds, as well as a two story main building with more than 500 parking places and surrounding gardens on a 40 acre site of the southwest corner of Deep Creek and Del Oro Roads.

• C&C Property Administration, Inc Project of Upland is planning an entrepreneurial business park on 15 acres on Waalew Road. The development will include 100 furnished offices of various sizes.

The Town of Apple ValleyThe Commercial Boom (continued)




Source: Town of Apple Valley

Yucca Loma Bridge



• Fort Irwin / National Training Center:o U.S. Army: 14,025o Private Contractors / Civilians: 3,622

*200 new civilian jobs in the next 2 years.• Marine Corp. Logistics Base-Barstow:

o Civil Service: 1,389o U.S. Marines: 340o U.S. Navy: 119

• Burlington Northern Santa Fe (Railroad): 765• Barstow Unified School District: 760• Wal-Mart Distribution Center: 550-750• Barstow Community Hospital: 300• Home Depot: 80• Goldstone: 190• Tanger Outlet Center: 185• Barstow Outlets Center: 159• Barstow Produce Market: 115 (projected)

The City of BarstowOverview


• Size: City limits encompass 40 square miles• Elevation:

o Median (city hall): 2,300o Low (near MCLB): 2,000o High (near Outlet Center Drive): 2,600

• Founded in 1886 and incorporated as a city in 1947• Taxable Sales (2007): $603 million• City Revenues (FY2007/2008)

o General Fund: $17.7 million o Sales Tax Revenue: $6.6 million o Transient Occupancy Tax (bed tax): $2.3 million

(2007) o Gas Tax Revenue (not part of General Fund):

$700,200

Source: City of Barstow (www.barstowca.org)




– 13.4% Increase Since 2000• Total Population (2000): 21,119**• Male Population: 10,536 (49.9%)*• Female Population: 10,583 (50.1%)*• Median Age: 32.1*• Average Household Size: 2.71*• Labor Force: 12,260*• Housing Units 2005: 9,153*• Owner / Occupied: 4,139 (54.1%)*• Renter Occupied: 3,508 (45.9%)*• Vacant Housing Units: 1,506 (16.5%)*

The City of Barstow


Economic Characteristics• Median Household Income: $44,832• Median Home Price (July ‘08): $120,000**

↓ Down 33.3% from Aug ’07

Fast Facts




• New Barstow Community Hospitalo $53 million investment.o 60-bed acute care facility.o Scheduled to open 2012.

• The Army’s National Training Center at Fort Irwino Expected to complete its long proposed expansion plan, adding ±130,000 acres to the existing ±642,000 acre military post

North of Barstow. o Nearly 60,000 soldiers from around the country train annually at the post.

• Barstow Industrial Parko ±900,000 sq. ft. logistics facility.o 500 – 750 new jobs (over 7,500 new jobs over next decade)o Opening late 2008 / early 2009.o Owners have completed EIR / entitlements on all 1,200 acres.o Will soon be railed served.o When fully developed the industrial park will have approximately 15,000,000 square feet of warehouse space.

• What’s New:o Rite Aid Pharmacy (±17,272 sq. ft.).o New Commercial / Office Space (±6,400 sq. ft.).o Desert Ambulance (±5,760 sq. ft. and ±3,500 sq. ft.).o Barstow Produce Market to open in Summer 2007. Phase 1 – Cold Storage (±85,000 sq. ft.)o H & E closed its original facility in Barstow after 55 years. The facility with over 32,000 Square feet, its space will be occupied

by True Value Hardware.

The City of BarstowEconomic Development



The City of Barstow

• The Walmart Center Distribution Facility, a $16 million dollar facility will create 700 jobs, will be located on 140 acres in the Industrial Park on Lenwood Rd. The ±880,000 s.f. distribution facility has been planned since December, 2005.

• Hotels (New, Planned or Under Construction):– Hampton Inn: 4-story, 90 rooms – Now Open.– Country Inn & Suites: 4-story, 92 rooms (includes Chili’s Restaurant)– Comfort Inn: 3-story, 83 rooms – La Quinta Inn & Suites: 103-room, 4-story.

• New Truck Services– “Loves Truck Stop,” adjacent to “Today’s Truck Wash,” a ±12.0 acre site was approved

in early March 2007.– Blue Beacon Truck Wash (2540 Highpoint Parkway).– Gassaway Diesel Repair (±28,330 sq. ft.).– LNG/CNG Fueling Station – Looking at other alternatives fuels, including hydrogen.

The Commercial Boom



• Hesperia Unified School District: 2,165• Stater Bros. Markets: 316• County of San Bernardino Business and Social

Services: 276• Robar Enterprises: 250• City of Hesperia: 217• Arizona Pipeline Company: 177• Day Tech Center: 167• Double Eagle Transportation: 150• C&M Woods: 127• Ram-Mar Painting, Inc.: 125• In-and-Out: 117• K Mart: 90• Pilot Travel Center: 75• Standard Abrasives: 61• Little Sister’s Truck Wash: 60

The City of Hesperia

• Incorporated: July 1, 1988• Square Miles: 74.77 (47,852 Acres)• Hesperia was named “The Star of the West”more

than 100 years ago.• According to the Southern California Association of Governments (SCAG) Hesperia is estimated to reach a population of 228,439 residents by the

year 2030!

• Developer M. Penn Phillips revitalized what is now

the City of Hesperia in 1954 when he bought 23,000 acres.

Overview





– 40.3% Increase Since 2000• Total Population (2000): 62,590**• Male Population: 40,162 (50.4%)*• Female Population: 39,552 (49.6%)*• Median Age: 31.7*• Average Household Size: 3.53*• Labor Force: 39,717*• Housing Units 2006: 26,733*• Owner / Occupied: 19,992 (50.3%)*• Renter Occupied: 5,670 (21.20%)*• Vacant Housing Units: 1,071 (4.0%)*

Budget• The City of Hesperia recently adopted a

$220 million budget for the fiscal year 2008-2009



Economic Characteristics• Median Household Income: $51,471*• Median Home Price (July ‘08):



Fast Facts





Main Street Marketplace: Wal-Mart plans to open up a ±204,617 sq. ft. Super Center on a ±43.84 acre site at the SEC of Main Street & Escondido, as part of the 450,000 sq. ft. commercial complex. A ±102,629 sq. ft. Home Depot will also anchor the center.

High Desert Gateway Plaza: Located at SWC of Main Street & I-15. It is currently under construction and scheduled to open in the 1st Quarter of 2009. Some confirmed tenants include: Super Target, Happy Nails & Spa, Maui Hawaiian BBQ, Pacific Dental, UPS Store, Verizon Wireless, Subway and Juice it Up! This $16 million project will be completed in October 2008 and will bring an estimated $1 million a year in sales tax revenue to the City of Hesperia. –Under Construction!

Hesperia Gateway Marketplace: Located on the SWC of Escondido & Main Street, Bear Creek Capital is working with national retailers on a ±101 acre site, which will ultimately contain about ±914,000 sq. ft. of retail space. The investment group is currently working with three (3) unidentified anchor stores to occupy approximately ±343,000 sq. ft. of space. It is scheduled to break ground in late 2008.

Hesperia Gateway Plaza: At the NEC of Main Street & Mariposa, Malcolm Riley plans to build a ±592,000 sq. ft. commercial center on ±29.01 acres. Approximately ±222,000 sq. ft. of retail space will be open, including a proposed 104 room hotel, a 3-story office building and a variety of restaurants and retail shops.

Hesperia Commons: A ±32-acre site north of the aqueduct on the east side of Interstate 15 has proposed a ±424,890 sq. ft. development. Proposed anchor tenants include Ice Castle (the High Desert’s first Olympic ice skating rink) and Colton Pianos. It also includes space for shops, restaurants, an entertainment complex and residential condos.

Shops at Topaz “Fresh & Easy Neighborhood Market” located at the SEC of Main and Topaz officially opened on August 6, 2008. Approximately 10,000 square feet. It is expected to employ 20 – 30 people. – Now Open!

The Commercial Boom




• Hotels Completed Within the Last 3 months Include: Holiday Inn Express (100 Rooms), Spring Hills Suites By Marriott (63 Rooms), Courtyard By Marriot (135 Rooms) a 4-story 88,000 square foot hotel which will house a 5,000 square foot conference room with the ability to accommodate 400 people, 2 heated swimming pools and will create 35 full-time jobs and the Hampton Inn & Suites is currently under construction and is scheduled to be completed in early 2007 (68 Rooms).

• The Civic Plaza: At a cost of $26 million, the ±58,500 sq. ft. city hall project is nearly complete with a new ±20,000 sq. ft. library as a part of the City’s ±32.0 acre master plan located between Juniper and Smoke Tree, just west of 7th Street. The remaining ±22.0 acres will be developed with a park, retail stores, professional buildings, restaurants and apartments.

• Live Oak Holdings LLC: will develop a 23.3 acre parcel, adjacent to Mariposa near Live Oak Street. The mixed use project will include medical office complex, retail stores, a bowling center and Colton Piano & Organ. There will also be a skating rink and a training facility for ice skaters.

• SB County Victor Valley Government Building: The 60,000 square foot building is being build near the new Hesperia Civic Center off of 7th Street. The 3-story building will accommodate 300 employees in the new downtown center that will feature new retail, restaurant, office space and mixed-used residential units when completed.

• New Police Station: A new 39,000 sq.ft. police station will be built at the corner of 9th and Smoketreebeginning in 2009 and construction will take 18 months.

The Commercial Boom (continued)



• Summit Valley is a largely undeveloped area south of the city. The area has almost no infrastructure and only 2 paved roads (Highway 138 and Summit Valley Road).

• The City’s general plan for this area requires comprehensively planned development. Since the City’s incorporation, 3 specific plans have been approved in Summit Valley. The largest of these, Rancho Las Flores and Summit Valley Ranch combine for nearly 19,000 dwelling units.

• A new specific plan, “Majestic Hills” (by SunCal) has been submitted and proposed as an additional 4,000 dwelling units.

• Should these specific plans go forward, they could add about 66,000 of additional population to the city and the sphere of influence.

The City of HesperiaSummit Valley



• Southern California Logistics Airport: 1,986• Victor Valley College: 1,100• Victor Valley Union High School District: 1,000• Victor Valley College: 1,000• Victor Elementary School District: 930• Prime Care Medical Group / Desert Valley Hospital: 900• Verizon: 900• Wal-Mart: 600• City of Victorville: 593• Victor Valley Community Hospital: 544• AFG Glass: 385• Federal Corrections Complex Victor Valley: 328• TXI Cement: 220• Desert Community Bank: 175• Daily Press: 160• Home Depot: 150• Southwest Gas Corporation: 138• Southern California Edison: 125• Hilton Hotel: 100

The City of Victorville

• Incorporated: September 21, 1962.• Elevation: 2,875 feet above sea level.• Square Miles: 74.09 with sphere of influence covering 98.05 square miles.

• Location: Victorville is situated approximately 97 miles northeast of Los Angeles and 35

miles northeast of San Bernardino at the edge of

the Mojave Desert. The City is 180 miles

south of Las Vegas, Nevada.

Overview




General Characteristics• Total Population (2008): 107,408**

– 67.7% Increase Since 2000• Total Population (2000): 64,029**• Male Population (2007): 58,482*• Female Population (2007): 58,246*• Population Growth: 8%• Median Age: 32.8• Labor Force: 31,500• Unemployment Rate: 6.9%• New Single-Family Home Permits Issued

(2005): 2,263• U.S. Census Bureau named Victorville the

2nd fastest growing city in the nation (7/10/08)

• Households: 35,993*• Owner / Occupied: 64.9%*• Renter Occupied: 28.5%*• Average Household Income:

$53,724*• Dwelling Units: 29,580• Assessed Valuation: $7,043,256,916

(as of December 2004)• Median Home Price (July ‘08):

– Zip Code 92392: $159,000**↓ Down 46.8% from Aug ’07**

– Zip Code 92394: $160,000**↓ Down 41.3% from Aug ’07**

– Zip Code 92395: $159,000**↓ Down 36.5% from July ’07**


* Real Estate SOUTHERN CALIFORNIA’S 2008 California Economic Development Guide

Fast Facts

** State of California Dept of Finance (Population Estimates for Cities, Counties and State 2001-2008)*** Source: Data Quick / DQNews.com (Aug 2008)




• In 2005 the Planning Commission processed 600 cases, the highest number since 1989.

• A $450 million-dollar hybrid power plant is planned by the City of Victorville and has recently cleared a major permit hurdle with the California Energy Commission. Newport Beach Inland Energy developed by Newport Beach-based Inland Energy is the master developer. The $450 million-dollar construction project, will provide electricity to a half million (500,000) homes. It is scheduled to be built on +/- 388 acres just north of Southern California Logistics Airport. The plan is scheduled to have a capacity of 563 mega watts with 513 mega watts fueled by natural gas and 50 mega watts fueled by 250 acres of solar-thermal collectors.

• In early September, the city of Victorville City Council pledged up to $200 Million dollars for the first phase of the High Desert Corridor (the E220), a 4-lane freeway that will link Southern California Logistics Airport with Interstate 15.

• In December of 2007, agreed to lend Rancho Cucamonga based National Community Renaissance of California, $21 Million dollars to build moderate-income apartments. The project called Centre Point Apartments will house 128 units. The project is to be built at a cost of $33 Million dollars. Construction is expected to start in August of 2008.

• The city of Victorville in mid-November 2007 approved a 1 million square foot distribution center plan, just north of the Nutro Pet Products factory. The building, slated for the cities Foxborough Industrial Park, located at Ottawa and Hesperia Roads will be the largest building in the city of Victorville. The building to be developed by Space Center Mira Loma will have 357 parking places.

• The city of Victorville has recently approved $173 Million dollars to buy natural gas-fire turbans from General Electric for a massive power plant project, north of the former George Air Force Base. It is anticipated that the 550 megawatt project will be approved by April of 2008, by the California Energy Commission. The project will be known as the Victorville 2 Hybrid Power Plant. It willcombine 500 megawatts of natural gas-fire turbans and 50 megawatts of solar panels on over 250 acres to be the first hybrid natural gas-solar plant in the country. The city of Victorville hopes to finish the project by 2010. The project will cost $800 Million dollars to build.

Development



• Budget: The City Council anticipated a $23 million budget for 2005-06 and expect to end fiscal year with $26 million in sales tax revenue (an 8% increase).

• City Hall: On July 20, 2005, the City of Victorville awarded a construction contract to Rogers-Quinn Construction, Inc. in the amount of $27 million, which will enlarge City Hall to 107,000 sq. ft. The current expansion includes 66,000 sq. ft., the existing 41,000 sq. ft. will be renovated and the project will take approximately 18 months.

• New Power Plant: The City is attempting to complete the final approval process with the California Energy Commission for an additional $450 million power plant. The developer is Inland Energy based in Newport Beach. This plant, Victorville 2 will provide electricity to approximately 500,000 homes. It is scheduled to be built on approximately ±388 acres just north of Southern California Logistics Airport. The plant will consist of 563 mega watts with 513 mega watts fueled by natural gas and 50 mega watts fueled by 250 acres of solar-thermo collectors. Approved by February 2008, construction is scheduled to begin in Summer 2008 and the plant would be operational by Summer 2010.

• Desert Community Bank: The High Desert’s largest bank has been recently purchased by East/West Bancorp for $142.6 million. The transaction will close in July 2007. DCB operates branches in Victorville as well as Apple Valley, Adelanto, Barstow, Hesperia, Phelan and Wrightwood. First established in 1980 it has 280 employees.

• Cambria Suites: Hansot Hospitality Group has announced the development of a 98-room hotel. Amenities include ergonomic furniture, indoor swimming pool, fitness center, Barista Bar and high speed wireless internet access. The developer expects to break ground by the third quarter of 2007. The ±70,000 square foot hotel is expected to be completed by September 2008.

The City of VictorvilleEconomic Development




• BNSF:o A third rail line is under construction through the Cajon Pass, which will increase the maximum capacity of the

BNSF main line from 100 to 150 trains per day. The track is expected to accommodate increases in cargo coming from ports of Los Angeles and Long Beach, which will triple by 2030, according to the San Bernardino Associated Governments (SANBAG). Currently, the BNSF main line through the Cajon Pass handles between 90-100 trains per day on average, although 110 trains occasionally travel the line. BNSF’s first track through the Cajon Pass was built in 1885 and the second in 1913. Union Pacific built one track in the late 1960’s. The construction of the 16 mile third track is estimated at $80 Million dollars and will be completed by the end of 2008. The entire project will require moving about 1 million cubic yards of dirt.

o Plans for Desert Xpress: High-speed train from Las Vegas to Victorville continues to move forward. The train will cover roughly 200 miles over newly built tracks with a top speed of 125 miles per hour. It is anticipated that it will take one (1) hour to Las Vegas and will cost $110 round trip. Mr. Tom Stone is President of Desert Xpress. The project is estimated to create two to three thousand jobs in customer service and at the adjacent train maintenance and repair facility. The project will primarily use existing rail or freeway rights of way along I-15. Environmental impact report is due to be completed at the end of 2008 or early 2009.

• TXI Riverside Cement : o Will complete their new facility by the end of October. The new state-of-the-art plant will increase the annual

production from 1.2 million tons to 2.3 million tons of cement. It will be one of the most efficient plants in the world. The plant is built at a cost of nearly $400 Million dollars.

Development (continued)



• Treadwell-Robertson Inc:o Treadwell-Robertson Inc will break ground in October on a 50,000 square foot retail center, located just

west of Bear Valley Road and Amethyst Road. The Lifestyle Neighborhood Center will feature affluent designs.

• Wal-Mart:o At “Dunia Plaza” there will be a ±220,000 sq. ft. Super Wal-Mart and ±110,000 sq. ft. Sam’s Club (plans

approved as of 2005).o At the northwest corner of Spring Valley Lake Parkway & Bear Valley Road there is another proposed

±220,000 sq. ft. Super Wal-Mart.o At the northeast corner of Hwy 395 & Palmdale Road there is a third proposed ±220,000 sq. ft. Super

Wal-Mart.• Desert Sky Plaza:

o Located at the corner of Civic Drive & Roy Rogers there is a 51-acre site where nearly ±300,000 sq. ft. will ultimately be developed. Phase 1 is Home Depot and 22 to 30 retail shops totaling ±160,000 sq. ft.

o World Premier Investments continues its expansion of “Desert Sky Plaza” with an additional 350,000 square feet of retail space. It’s predicted that Winco Foods will be the anchor tenant. The newest phase, located at the southwest corner of Amargosa and Roy Rogers Drive. Construction of the retail space is expected to be completed by the end of 2008.

The City of VictorvilleThe Commercial Boom



• Civic Towers: The largest office building ever proposed in North San Bernardino County is an 8-story, 160,000 sq. ft. Class A office tower located at the northwest corner of Seneca Road & Civic Drive. The site is compromised of 9 acres and when completed will offer 320,000 sq. feet of office space.

• Stone Crest: Big Sky Development, a Las Vegas group is planning a 13-acre mixed use business park at the southeast corner of Nisqualli Road and Hesperia Road. It will include a 40,000 sq. ft., 2-story office building with retail, restaurants and office condos surrounding the project for a total of 115,000 sq. ft. of space.

• New Hotels Opening Within the Last 3 Years: o Hilton Garden Inn: 139 Roomso Comfort Suites: 77 Roomso Hawthorne Suites: 80 Rooms

• Caltrans: Caltrans began work on the Mojave Drive Interchange Widening Project which will take two years, a cost of $8 million dollars.

• Hansot Hospitality Group: Hansot Hospitality Group, developing Cambria Suites, will develop 98 rooms along Mariposa Road, just north of Nisqualli. The rooms will include ergonomic furniture, indoor swimming pool, fitness center, barista bar and high speed wireless internet access for guests.

The City of VictorvilleThe Commercial Boom (continued)




• Victor Valley Community College District was created in 1960 and held it’s first classes in 1961 on the campus of Victor Valley High School.

• The present campus, which encompasses 253 acres, started construction in 1963 and opened it’s doors to students in 1965.

• The college is located in Victorville, CA. Just 90 miles north of Los Angeles and 195 miles southeast of Las Vegas along I-15 and serves 2,200 square miles, one of the largest geographical regions in the state.

• Since opening in 1965 the campus has gone through several expansions including: a technical complex, performing arts center, allied health building, student services building, gymnasium, science building, library, tennis courts, activities center, child development center, new soccer fields, and most recently an advanced technology center and a speech and drama addition to the performing arts center.

• A campus that in 1961 served 500 students with 15 total faculty and staff members now has an enrollment of nearly 11,000 credit students each term and staff that includes 460 faculty members and 181 support personnel. The college projects that by 2010 they will have an enrollment of over 18,000 credit students each term.

• This campus serves a diverse population with a student body comprised of 61.7% females, 38.3% males, 59.7% white, 24.4% Hispanic, 3.9% Asian/Pacific Islander, 9.7% African American and 1.5% unknown.

• In late July 2007, Victor Valley College named Dr. Robert Silverman, Victor Valley College President.

Victor Valley College




• BNSF is in negotiations with the City of Victorville to construct a major rail yard at SCLA.• The facility will cover ±350 acres of land with ±6.4 million sq. ft. of industrial space.• Projected to create ±13,500 direct and ancillary jobs.

Intermodal



Southern California Logistics Airport (SCLA)

• Formerly George Air Force Base, where 6,000 jobs were lost when the base closed in 1992, causing a devastating blow to the young cities of the Victor Valley. Experts believe that between 7,500-10,000 jobs were actually lost. The current job count at Southern California Logistics Airport is 2,188 as of December 15, 2007. 40 business or agencies have offices at the base. The original base, built at a cost of nearly $10 Million dollars, would house 4,100 officers, cruising cadets but facilities would be large enough to house 6,000 men, total. Construction of the first runway began September 29, 1941. The runway would be 6,500 feet long and 150 feet wide. In September of 1950, the base was renamed in the memory of Brigadier General Harold H. George, a World War 1 ace, who had been killed in a plane crash in Australia in 1942.

• Stirling Capital Investments, a joint venture between Sterling Enterprises, a Foothill Ranch based development company and Denver based DCT Industrial Trust have commenced construction on two speculative multi-tenant industrial buildings, totaling 223,773 square feet at Southern California Logistics Centre. The two buildings will offer suites from 3,500 to 20,000 square feet and are expected to generate 100 to 200 new jobs in the region.

• In mid-November 2007, Southern California Logistics Airport through Sterling Enterprises received approval for a 1,000,000 square foot warehouse, containing 360 trailer parking, which will be built within the next 12 months, according to the developer.

• Southern California Rail Complex - A planned 3,500-acre intermodal rail and rail-served industrial complex

General Information



Southern California Logistics Airport (SCLA)Airport Features

• 24/7 air traffic tower – no curfew• Two intercontinental runways:

o 15,050-foot x 150-foot runwayo 9,100-foot x 150-foot runway

• 24/7 U.S. Customs Port of Entry• 2,600-acre Foreign Trade Zone (FTZ #243)• Unrestricted airspace• Perfect flying weather–VFR 360 days per year (annual rainfall 7 ½ inches)

• 145 acres of concrete aprons• Full-service fixed-based operator• Fuel pipeline onsite with more than 2 million gallons storage• Secure, dry high desert parking for 500 aircraft• Index E ARFF capability• Security certified per TSA 1542• Hangars and warehouses• Bonded cargo and refrigerated storage facilities• 4-minute taxi to terminal • 2-hour air cargo turnaround

Southern California Logistics Airport (SCLA) is a 2,500-acre world-class aviation and air cargo facility serving international and domestic needs. The airport can accommodate all current-flying commercial and military aircraft with a 24-hour per day tower operation and emergency response capabilitiescomparable to the world’s largest airports.

Source: www.logisticsairport.com



Southern California Logistics Airport (SCLA)Site Plan




Southern California Logistics Airport (SCLA)Existing Businesses


• Blackhawks• CB Richard Ellis• Embry Riddle • Enterprise Rent a Car• Excel Scientific• Exel Logistics• Federal Express• General Electric• Goodyear Tire Company• GTE (Verizon)• High Desert Power Project• Leading Edge Aviation Services• Mercy Air Services• Million Air• Newell Rubbermaid (Occupies ±406,712 SF with option to extend to 1.000,000 SF)

• Pratt & Whitney • Prego • Product Systems • PTL Electric • Sequoia Lighting • Southern California Aviation • Stoody Industrial • The Boeing Company • U.S. Customs • Victorville Aerospace • Wal-Mart • World of Leisure

More than 100 companies have chosen to conduct business at Global Access including:



San Bernardino CountyGeneral Information

• San Bernardino County is the largest county in the United States by area at 20,105 square miles, and is larger than each of the nine smallest states. However, if other county equivalents are included, it is only the fifth largest, as four of Alaska's boroughs are larger.

• As of the 2000 census, the population was 1,709,434. As of 2007, the population was estimated by the California Department of Financeto have grown to 2,028,013.

• Located in the southeast of the state of California, the deserts and mountains of this vast county stretch from the outskirts of the densely populated Riverside-San Bernardino Area to the Nevadaborder and the Colorado River.

• The county seat is San Bernardino. The more urbanized southwestern portions of the county are considered to be part of the Inland Empire region.

• San Bernardino County is the only California County bordered by both Nevada and Arizona.

Did you know?




Social Characteristics• 25+ Population Attainment Total: 983,273 *• 9th Grade: 10.4%*• 9th – 12th (No Diploma): 15.4%*• High School Graduate: 25%*• Some College (No Degree): 25.7%*• Associate’s Degree: 7.6%*• Bachelor’s Degree: 10.4%*• Master’s / Prof / Doctorate Degree: 5.5%*

Economic Characteristics• Median Household Income: $52,779**• Median Home Price (July ‘08): $205,000**

↓ Down 41.4% from Aug 2007**

General Characteristics• Year of Incorporation: 1853• Total Population (2008): 2,350,766**

– 20.2% Increase Since 2000• Total Population (2000): 1,710,139**• Male Population: 50%*• Female Population: 50%*• Median Age: 31*• Median Household Income: $52,779*• Per Capita Income: $67,526*• Average Household Size: 3.53*• Housing Units 2007: 692,696* • Owner / Occupied: 58.3%*• Renter Occupied: 30.6%*• Vacant Housing Units:11.1%*

Fast Facts





• The first Supervisory District has recently gained 102,000 residents since the 2000 census. 105,148 residents are included in Phelan, Pinon Hills, Lucerne Valley.

• The largest solar plant in the world has been proposed for the Mojave Desert in San Bernardino County. Pacific Gas & Electric has reached a deal to by power from Israel-based Solel Solar Systems. The 3 final locations are just north of the Marine Corps Air Ground Combat Center in 29 Palms, a project northwest of Needles or a project near the Nevada border, between the Highway 15 and Highway 40.

• Pinon Hills (unincorporated portion of San Bernardino County) has received $400,000 from First District Supervisor Brad Mitzelfelt, and $500,000 through the San Bernardino County Special District through Proposition 40 (State Park Ram money) for a total of $900,000 that will be used for an upscale park near Smoke Tree and Beekley Road.

• San Bernardino County (SBC) supported 45,000 jobs.

• SBC handled $14.9 billion in imports and $917 million in exports.

• The SBC Region handled nearly 2.4 million tons of trade merchandise from the port of Los Angeles and more than 1.7 million tons from the port of Long Beach.

• The Port of San Diego shipped 617,000 tons to SBC.

• SBC represented slightly more than 50% of the total trade activity in the Inland Empire Region (Riverside and San Bernardino Counties) or nearly $7.1 billion total.

• SBC’s gross domestic product is $96 billion, ranking it 50th, just below Chile among the top 50 economies in the world according to information release by SBC.

Source: Claremont Graduate University (Report on International Trade)

International Trade 2005 What’s New?

Overview



In roughly 2000, the migration of Southern California’s edge of high speed economic growthbegan to dramatically change the High Desert/Victor Valley market:

Population soared by 120,133 people (48.7%) from 2000-January 2007 reaching 366,989 with the expectation that it will hit 425,392 by mid-2012. The population was 333,585 in 2006. It went up 10.0% from 2006-2007.

Total taxable sales doubled from $1.65 billion to $3.32 billion between 2000 and 2006 (100.3% increase) or a compound growth rate of 12.3%. Inflation was just 22.7% indicating a huge increase in the physical volume of retail trade. Note: retail sales data for 2007 is not yet available.

Payroll grew from $1.56 billion to $2.69 billion from 2000-2007, up $1.13 billion or 72.3%.

The total income of families in the High Desert grew significantly to $5.79 billion in 2006.

It is estimated that $2.09 billion (36.1%) of this income will be spent on categories that drive demand for retail space. This spending level is a conservative figure as population grew 10% from 2006-2007.

High Desert Retail Economy Executive Summary

Source: John E. Husing, PhD., High Desert Retail Economy (pg. 1). Commissioned by San Bernardino County




The potential demand for retail space is estimated at 8.26 million square feet in 2006. It would be higher in 2007 due to the 10% increase in population and spending.

In 2007, the existing occupied retail square footage is 5.69 million square feet. The potential additional space that could be occupied is 2.57 million square feet or an extra 45.1% using 2006 spending levels. Again, it would be more in 2007 given the 10% gain in population and related spending from 2006-2007.

Much of the spending that could support this space is currently leaking out of the High Desert market.

According to San Bernardino Registrar of voters, as of July 28, 2008 there were 301,765 registered republicans and 300,435 registered democrats in the County.

A study of the High Desert portion of San Bernardino County prepared by Dr. John Husing, Inland Empire Economist and Vice President of Economics & Politics, Inc., determined that with $2.09 billion worth of annual income available that drives the High Desert Retail economy, with the current lack of sufficient development, $288 million are leaked out of the High Desert Region. Husing’s report identifies nearly 2.5 million additional Sq. Ft. needed for our current population.

High Desert Retail Economy Executive Summary (continued)




Commercial Base by Square Feet

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

Adelan

toApp

le Vall

ey

Barstow

Hespe

riaUnin

corpo

rated

Victorv

ille

Composition of Property Type by CitySource: Colliers International - Bradco

April 2008

Industrial Retail Office

Source: The Bradco Companies - April 2008

35,311,890 4,549,536 15,848,233 14,914,121 Totals

14,331,712 2,453,491 6,780,942 5,097,279 Victorville

748,136 71,986 574,694 101,456 Unincorporated

7,645,814 825,159 2,894,966 3,925,689 Hesperia

4,137,252 411,531 2,591,306 1,134,415 Barstow

5,275,491 750,362 2,584,565 1,940,564 Apple Valley

3,173,485 37,007 421,760 2,714,718 Adelanto

City TotalsOffice SFRetail SFIndustrial SFCity

Total Inventory by Square Footage



Commercial Base Breakdown

Percentage of Commercial Real Estate Inventoryby City by Square Feet

Source: Colliers International - BradcoApril 2008

Adelanto9%

Apple Valley15%

Barstow12%

Hesperia22%

Victorville40%

Unincorporated2%



Commercial Base by No. of Properties

Total Inventory by No. of PropertiesCity Industrial Retail Office City TotalsAdelanto 116 51 3 170 Apple Valley 79 189 92 360 Barstow 57 346 101 504 Hesperia 259 358 105 722 Unincorporated 19 136 23 178 Victorville 175 579 240 994 Totals 705 1,659 564 2,928 Source: The Bradco Companies February 2007

Percentage of Number of Commercial Properties by CitySource: The Bradco Companies

February 2007

Hesperia25%

Barstow17%

Apple Valley12%

Adelanto6%

Victorville34%

Unincorporated6%



Inventory Breakdown by No. of Properties

High Desert Availability Ratesby Product Type


Retail35%

Industrial24%

Office41%



Industrial Base

11.6%7.1%

29.6%

4.4%

32.3%

17.6%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%Ad

elan

to

Appl

e Va

lley

Bars

tow

Hes

peria

Uni

ncor

pora

ted

Vict

orvi

lle

Industrial Availability Rates by Square Feet by CitySource: Colliers International - Bradco

April 2008



7.63%6.46%

9.86%

5.43%

4.19%

7.92%

0.00%1.00%2.00%3.00%

4.00%5.00%6.00%7.00%8.00%9.00%

10.00%

Adel

anto

Appl

e Va

lley

Bars

tow

Hes

peria

Uni

ncor

pora

ted

Vict

orvi

lle

Retail Availability Rates by Square Feet by CitySource: Colliers International - Bradco

April 2008

Retail Base



Office Base

16.29%

11.52%

17.51%

9.88%

6.72%

12.52%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%Ad

elan

to

Appl

e Va

lley

Bars

tow

Hes

peria

Uni

ncor

pora

ted

Vict

orvi

lle

Office Availability Rates by Square Feet by CitySource: Colliers International - Bradco

April 2008



-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

Adel

anto

Appl

e Va

lley

Bars

tow

Hes

peria

Uni

ncor

pora

ted

Vict

orvi

lle

Available Space by Square Feet by CitySource: Colliers International - Bradco

April 2008

Industrial Retail Office

Availability by Square Feet



Availability Rates - Industrial

Availability vs. Average Asking Lease RatesIndustrial Properties


0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

Adelanto Apple Valley Barstow Hesperia Victorville$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

Available Square Feet Average Asking Lease Rate

Average Asking Lease Rate

Available Sq. Ft.City

$7.62895,107Victorville

$11.69173,656Hesperia

$6.60335,488Barstow

$7.20138,486Apple Valley

$5.69313,858Adelanto



Availability Rates - Retail

Availability vs. Average Asking Lease RatesRetail Properties


0

100,000

200,000

300,000

400,000

500,000

600,000


$5.00

$10.00

$15.00

$20.00

$25.00





$22.97157,084Hesperia

$13.02255,440Barstow


$21.2932,164Adelanto



Availability Rates - Office

Availability vs. Average Asking Lease RatesOffice Properties


0

50,000

100,000

150,000

200,000

250,000

300,000

350,000


$5.00

$10.00

$15.00

$20.00

$25.00

$30.00





$25.0081,549Hesperia

$15.8072,044Barstow


$10.806,030Adelanto

Source: Colliers International - Bradco (April 2008), LoopNet & Costar



0

20000

40000

60000

80000

100000

120000

Adelanto Barstow Hesperia Unicorporated

Population

Apple Valley UnincorporatedNorth Desert

28,181

70,092

23,952

87,820

107,408

70,179

Total PopulationThe Victor Valley

Source: Department of Transportation

35,923

VictorvilleHesperia Unincorporated



Agents

JOSEPH W. BRADY, CCIM, SIORPresidentBSN: (760) 951-5111 x 101CELL: (760) [email protected]

MARY JO OBBEMACommercial AssociateBSN: (760) 951-5111 x103CELL: (760) [email protected]

The Bradco Companies

Documents

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