B Lease Appendix - CA Tax

EXHIBIT B REAL ESTATE TAX ADJUSTMENT - CALIFORNIA

CR 1.01 REAL ESTATE TAX ADJUSTMENT - CALIFORNIA (MAR 2026)

A.

Purpose. This paragraph provides for adjustment in the rent (tax adjustment) to account for increases or decreases in Real Estate Taxes for the Property after the establishment of the Real Estate Tax Base, as those terms are defined herein. Tax adjustments must be calculated in accordance with this paragraph. This only applies to the state of California.

B.

Definitions. The following definitions apply to the use of the terms within this paragraph: 1.

The term “Base Year” must mean the first Tax Year for which a Full Assessment of the completed project is in effect for the entire Tax Year.

2.

The term “Real Estate Tax Base” means the Real Estate Taxes paid for the Base Year. If an Improvement (other than an Improvement which results in a change of Base Year) or a Change in Ownership occurring during the Base Year is not fully reflected in Real Estate Taxes for the entire Base Year, the Real Estate Tax Base must be adjusted as follows: Real Estate Tax Base must be increased by the amount of additional Real Estate Taxes which would have been paid for the Base Year if the Improvement or Change in Ownership had been fully reflected in the Real Estate Taxes for the entire Base Year.

3.

The term "Change in Ownership" has the same definition as in California Revenue and Taxation Code, Part 0.5, Chapter 2, as amended or replaced from time to time.

4.

The term “Current Year Taxes” means Real Estate Taxes paid for each Tax Year following the Base Year, excluding increases in Real Estate Taxes (whether the increases result from increased rate and/or valuation) attributable to any Improvement or Change in Ownership which occurs or is completed after the Base Year.

5.

The term “Full Assessment” means that the taxing jurisdiction has considered all contemplated Improvements to the assessed property in the valuation of the same. Partial assessments for New Construction will not be used for establishing the Base Year.

6.

The term "Improvement" means any addition, alteration or improvement to real property, excluding however construction which: a.

is performed by or at the request of the Government,

b.

is for the sole benefit of the Government, and

c.

is not required to make the property ready for occupancy by the Government in accordance with the terms of the lease or otherwise required by the lease.

7.

The term "New Construction" has the same definition as in California Revenue and Taxation Code Section 70, as amended or replaced