ACQUIRED! Gates at South Bend - Tuscaloosa, AL

THE GATES AT SOUTHBEND

CONFIDENTIALITY & DISCLAIMER

This presentation is the property Gates at South Bend (“ARC and The Property”) and is strictly confidential. It contains information intended only for the person to whom it is transmitted. With receipt of this information, recipient acknowledges and agrees that: (i) this document which is not intended to be distributed, and if distributed inadvertently, will be returned to ARC upon request as soon as possible; (ii) the recipient will not copy, fax, reproduce, divulge, or distribute this confidential information, in whole or in part, without the express written consent of ARC; (iii) all of the information herein will be treated as confidential material with no less care than that afforded to its own confidential material. This presentation is for informational purposes only and is not intended for any other use. This presentation is not an offering memorandum or prospectus and should not be treated as offering material of any sort. The information contained in this presentation shall not constitute an offer to sell or the solicitation of an offer to buy securities. This presentation is intended to be of general interest only, and does not constitute or set forth professional opinions or advice. The information in this document is speculative and may or may not be accurate. Actual information and results may differ materially from those stated in this document. ARC makes no representations or warranties with respect to the accuracy of the whole or any part of this ARC presentation and disclaims all such representations and warranties. Neither ARC nor its principals, employees, or agents shall be liable to any user of this document or to any other person or entity for the truthfulness or accuracy of information contained in this presentation or for any errors or omissions in its content, regardless of the cause of such inaccuracy, error, or omission. Furthermore, ARC, its principals, employees, or agents accept no liability and disclaim all responsibility for the consequences of any user of this document or anyone else acting, or refraining to act, in reliance on the information contained in this document or for any decision based on it, or for any actual, consequential, special, incidental, or punitive damages to any person or entity for any matter relating to this document even if advised of the possibility of such damages. Any and all projections that may be contained in this document have been estimated based on unknown variables which may or may not occur in the future. This presentation contains forwardlooking statements within the meaning of the federal securities laws. Forward-looking statements express ARC’s expectations or predictions of future events or results. They are not guarantees and are subject to many risks and uncertainties. There are a number of factors beyond ARC’s control that could cause actual events or results to be significantly different from those described in the forward-looking

statements. Any or all of the forward-looking statements in this document or in any other statements ARC makes may turn out to be wrong. Except as required by applicable law, ARC does not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise. In light of the significant uncertainties inherent in the forwardlooking statements made in this document, the inclusion of this information should not be regarded as a representation by ARC or any other person that its objectives, future results, levels of activity, performance or plans will be achieved. The financial information contained herein has not been audited or reviewed by ARC’s independent certified public accountants and accordingly ARC expresses no opinion or other form of assurance as to this financial information. No representation or warranty of any kind is or can be made with respect to the accuracy or completeness of, and no representation or warranty should be inferred from, ARC’s financial information (the “Financials”) or the assumptions underlying them. No representation or warranty can be made as to ARC’s future operations or the amount of any future income or loss. Some assumptions on which the Financials are based may inevitably not materialize, unanticipated events and circumstances will occur. Further, the Financials are not prepared nor are they presented in accordance with generally accepted accounting principles. Therefore, the actual results achieved during the period presented may vary from the Financials, and the variations may be material. Prospective investors are cautioned not to rely on the Financials contained in the presentation. ARC does not intend to update or otherwise revise the Financials to reflect circumstances existing after the date hereof or to reflect the occurrence of unanticipated events even if some or all of the underlying assumptions do not come to fruition. ARC is not an investment adviser or a broker-dealer and is not registered with the U.S. Securities and Exchange Commission. The information in the presentation should not be used as the sole basis of any investment decisions, nor is it intended to be used as advice with respect to the advisability of investing in, purchasing or selling securities, nor should it be construed as advice designed to meet the investment needs of any particular person or entity or any specific investment situation. Nothing in this presentation constitutes legal, accounting or tax advice or individually tailored investment advice. The recipient of this presentation assumes responsibility for conducting its own due diligence and assumes full responsibility of any investment decisions.

TABLE OF CONTENTS

INVESTMENT OFFERING SUMMARY

ARC Multifamily is excited to offer the exclusive opportunity to acquire Gates at South Bend, a 147-unit property situated in Tuscaloosa, Alabama, which has experienced significant growth over the last decade supported by two key economic drivers, the University of Alabama with a $2.8 billion impact, and the Mercedes-Benz plant with a $5.8 billion investment. Gates at South Bend boasts a strategic location in Tuscaloosa with easy access to I-20, making it just a 20-minute drive to the Mercedes Benz manufacturing plant and a 10-minute drive to UA's main campus. Originally built in 1980 and recently renovated between 2017-2021, this asset is well-maintained and priced below replacement cost, offering investors a performing and well-capitalized property.

PROPERTY SUMMARY

$17,250,000 $117,347

$825,000

$19,367,500

INVESTMENT SUMMARY

$9.3M+ RENOVATION COMPLETED

Gates at South Bend has undergone extensive renovations, with over $9.3M+ spent on restoring the interior/exterior, adding modern features, and landscaping the grounds, making it a desirable investment opportunity. The property also boasts a state-of-the-art remote surveillance system, making it a high-performing asset.

EMBEDDED ORGANIC RENT UPSIDE

Gates at South Bend has experienced 16%+ organic rent growth trend over the past 18 months, with a 97%+ occupancy rate and 10% collection growth over the T12. Located in close proximity to I-20 and benefiting from suburban growth trends, the property is poised for sustained occupancy and further organic rent growth, providing an excellent opportunity for the next investor to increase rents and realize upside potential.

EXTREMELY ATTRACTIVE BASIS

Gates at South Bend, with its top-of-market physical plant, is being offered below current replacement costs and similar conventional product types across the Sunbelt, making it an attractive investment opportunity. The property's excellent location in Tuscaloosa offers substantial ROI potential through strategic capital improvements, and with construction costs soaring, the demand for in-place multifamily assets is increasing, as the cost estimates for new garden-style product surpass $200k/unit.

HEAVY SUPPLY CONSTRAINTS

Tuscaloosa County has heavy multifamily restrictions, resulting in almost all new supply over the past 10 years being designated for purpose-built student living, hindering competitive conventional supply and leading to 10%+ YoY market rent growth and market vacancy remaining above 95%.

TUSCALOOSA’S GROWTH TREND

Tuscaloosa is experiencing exceptional investment and job creation, driven by the University of Alabama ($2.8B impact) and the auto industry, particularly the Mercedes-Benz plant with its $5.8B+ investment into the state, making it one of Alabama's high-growth locales.

FASTEST GROWING COLLEGE IN THE NATION

The University of Alabama, the top economic engine in the Tuscaloosa metro area, continues to show unprecedented growth with record enrollment in Fall 2021, outpacing apartment supply by 20% over the last 10 years, and providing 14,000 jobs.

MERCEDES-BENZ

Mercedes-Benz is investing $1 billion in the expansion of its Tuscaloosa manufacturing plant, creating an additional 600 direct jobs and producing its first allelectric SUV there as part of the company's investment of over $6 billion in Alabama.

(Renovated 2017-2021)

Address 3831 3rd Avenue E, Tuscaloosa, AL 35405

County Tuscaloosa

Size/Density 12.61 Acres / 11.66 Units per Acre

▪ West side of McFarland, about 0.4 mile North of Interstate 59 and I20.

Location

▪ The property is just south of The University of Alabama Campus.

▪ Overall radius is 2 miles south of Downtown Tuscaloosa Traffic Counts

▪ McFarland Blvd./37 St. E N: 51,645 VPD

▪ 37th St. E/Albright Rd E : 10,489 VPD

▪ McFarland Blvd./I-20 N: 39,234 VPD

COMMUNITY AMENITIES

▪ State-of-the-Art Remote Surveillance System

▪ Ready Made Laundry Room

▪ Bluetooth Key Fob Gate System

▪ Gated

UNIT FEATURES

▪ Washer and Dryer Connections

▪ Patio/Balcony

▪ New-Construction Feel

▪ Black Appliances

▪ Wood-Style Flooring

EXTERIOR PHOTOS

EXTERIOR PROPERTY PHOTOS

INTERIOR PHOTOS

INTERIOR PHOTOS

AERIAL VIEW

TUSCALOOSA, ALABAMA

Tuscaloosa, a city in Alabama, is positioned advantageously in the western part of the state, less than one hour's drive from Birmingham and approximately three hours from Atlanta, Georgia. It serves as the county seat of Tuscaloosa County and ranks as the fifth largest city in Alabama. Being close to Interstate 20 makes it an ideal hub for distribution in the Southeastern region, thereby increasing its appeal for future economic investments. The convenient location and thriving economic factors in Tuscaloosa County, along with its main cities, have been and will continue to be drivers for long-term economic expansion.

BY THE NUMBERS:

253,627

Tuscaloosa's economy is expected to experience significant growth in the foreseeable future. Since the start of 2017, the Tuscaloosa Metropolitan Statistical Area (MSA) has attracted substantial economic investments, particularly due to a large expansion project by MercedesBenz U.S. International Inc. This expansion will continue to fuel local economic growth for an extended period. Additionally, the presence of stable economic drivers such as the University of Alabama, local hospitals, and the coal industry also provide favorable conditions for substantial expansion in the region until at least 2020.

Mercedes-Benz’s production plant, which has a value in the billions of dollars, has created over 22,000 jobs both directly and indirectly in the surrounding area. Its economic impact is estimated to be over $1.5 billion per year. At present, Mercedes-Benz is investing $1 billion in expanding its Tuscaloosa manufacturing plant, where it plans to manufacture its initial all-electric SUV. This expansion project is generating 600 new jobs directly.

MSA Population (2021) 3.4% Unemployment Rate (2022)

The BF Goodrich Tire Manufacturing Plant, which marked its 70th anniversary in 2016, is situated to the west of Tuscaloosa's central district. It currently provides employment to almost 1,400 individuals, and the payroll of the plant exceeds $120 million.

TUSCALOOSA, ALABAMA

The University of Alabama (UA), Alabama's biggest university, is a public research university situated in Tuscaloosa and is the flagship institution of the University of Alabama System. It is one of the oldest and largest universities in Alabama, offering academic programs in 13 divisions leading to bachelors, masters, education specialist, and doctoral degrees. UA is the only publicly-supported law school in the state, and it offers doctoral programs in several areas that are not accessible elsewhere in Alabama. The current enrollment at UA is 38,390, with a staff of nearly 14,000 individuals, including 1,957 instructional staff. UA is recognized for its achievements in sports, particularly football, having won 29 SEC titles and 18 national championships.

As one of the first public universities established in the southwestern frontier of the United States, the University of Alabama has played an important role in the state, region, and country over the past two centuries. The university has a rich cultural legacy, having been a center of activity during the Civil War and the Civil Rights Movement.

The university has received numerous accolades:

▪ #1 public university for the lowest average graduate debt-load among top 25 public institutions by U.S. News

▪ Ranked No. 9 for public universities by the same publication's School of Law ranking

▪ Forbes' list of Best Employers for New Graduates 2021

▪ UA's economic impact extends beyond the campus, with a total statewide economic impact of $2.777 billion, supporting 13,606 jobs and generating $137.1 million in income and sales taxes, according to the UA Center for Business and Economic Research

TUSCALOOSA, ALABAMA | EDUCATION

The University of Alabama acquired the Bryce Hospital campus in 2010 for $70 million, providing ample opportunity for growth. The campus addition has been utilized for new housing, administrative, academic, and auxiliary functions. In 2014, the university approved a $74 million construction budget that included a new dining hall, sorority house, and parking deck. The baseball stadium underwent a $42 million renovation in 2016, while the Sports Science Complex was renovated in 2020 with a $20 million budget. Other recent projects include the Moody Music Building, North Lawn Hall, and central University Boulevard renovation. UA strives to improve and modernize its facilities constantly, and also plans to expand and enhance graduate education in the future.

Over the past decade, the University of Alabama has experienced significant growth in enrollment, with the goal of reaching 44,000 students. This growth has created a high demand for student housing. In fall 2021, UA enrolled the largest freshman class in history, with over 38,000 students, and experienced a 7% increase in graduate school enrollment. Despite the economic and fiscal impacts of the COVID-19 pandemic, UA had a $2.777 billion impact on the state of Alabama for academic year 2019-2020, with a significant portion of that impact coming from the seven home football games played in the fall semester, which had a statewide impact of $185.9 million per game. The university's economic impact is estimated to result in an 11.9% annual rate of return on investment for the state of Alabama, and its economic impacts on the Tuscaloosa metro area were $2.072 billion, 12,846 jobs, and $42.7 million in local sales tax.

Shelton State Community College is a large twoyear college in Alabama that specializes in fine arts education. With around 7,350 students, including 3,000 full-time students, Shelton State serves a diverse student population. Most students are first-time college students seeking associate degrees for transfer to four-year universities or UA students taking entry-level courses. The college has a total of 168 administrative personnel and 95 full-time instructional staff to support its educational mission.

TUSCALOOSA, ALABAMA | HEALTHCARE & RETAIL

Tuscaloosa benefits from its location near Interstate 20 and the University of Alabama, which attracts high-quality retail options to the region.

Midtown Village was built with the aim of attracting retail stores, restaurants, and office tenants that wanted a prime location in Tuscaloosa, close to the University of Alabama. With 344,000 square feet of retail and restaurant space, as well as 36,000 square feet of office space, the development was completed in 2007. Midtown Village has Best Buy, Barnes & Noble, and Planet Fitness as its anchor stores. It also features popular restaurants such as Kobe Steakhouse, Iguana Grill, Panera Bread, and Chipotle Mexican Grill.

For a considerable period, healthcare has been a significant contributor to the economy of the Tuscaloosa area, with multiple hospitals providing employment to more than 1,000 individuals.

At the heart of the DCH Health System is DCH, which features specialized departments for cardiology, cancer, pediatrics, and orthopedics. Additionally, the facility boasts the most advanced trauma center and intensive care units in the area, and even offers a unique Bloodless Medicine and Surgery program. With 583 licensed beds, DCH accommodates around 24,000 patients each year while supporting 4,496 jobs.

The University Mall, situated at the junction of McFarland Boulevard and 15th Street, is the biggest indoor shopping complex in Western Alabama and occupies an area of 733,254 square feet. The mall houses a range of 74 stores and services, including popular anchors like JCPenney, Sears, Belk Women, Belk Men, along with well-known brands like Hibbett Sports and Kay Jewelers. Additionally, the intersection where the mall is situated is the second busiest in the entire state of Alabama, owing to its proximity to the University of Alabama and Interstate 20, which has helped make it a thriving retail hub in the Tuscaloosa area.

BUSINESS PLAN

The Gates at South Bend’s unit mix is made up of 48% 2-bedrooms and 52% 3-bedrooms. The average in-place rents are currently $936. Meanwhile, nearby competing apartment communities within a few mile radius of The Gates at South Bend are capturing $1,200+ on similar interior product. The addition of strategic amenities, capturing the interests of renters, will help achieve the value of this community. A dog park, jogging trail, exterior fitness area, cornhole, beer garden and playground are among the amenity value-add program. With rents well-below market, addition of amenities, and interior improvements, such as a learning thermostat, wood-style plank on first floor homes and adding a washer and dryer, The Gates will be able to capture the value of a 25% rental increase.

Acquire the property in its current condition.

PHASE ONE

PHASE TWO

Restructure the rents with additional ancillary income streams to continue to build value.

Make strategic capital improvements and raise rents.

PHASE THREE

PHASE 4

With a combination of increased rents, world-class operations and also a premium product with amenities, we open our pool of buyers and can command a higher overall asset value. At year 3, a refinance with a cash buy-out or marketing the asset to the pool of buyers will occur.

RENT COMPARABLES MAP

RENT COMPARABLES

5050 E Cypress Creek Ave

5501 Old Montgomery Highway Tuscaloosa, AL 35405

CASH FLOW PROJECTIONS

CASH FLOW PROJECTIONS

PRO FORMA FINANCIAL ANALYSIS | SOURCES & USES

CASH FLOW PROJECTIONS

The focus of this investment is on capital preservation and risk management, while still having taxadvantaged and inflation-protected upside potential.

The fund has two groups of partners:

1. The General Partners (GP) who are not only investors but also the key managers of the fund.

2. The Limited Partners (LP) who are the majority of the investors in the fund.

The fund provides a two-tier return structure for the limited partners as outlined on this page.

Each Class varies based on the following components:

• Coupon (adjusted interest) rate

• Priority of principal repayment

• Equity participation

Additionally, most of our investors are interested in the tax advantages related to the accounting of depreciation on each asset acquired.

All classes receive depreciation allocation based on the principal amount invested and the cost segregation analysis performed upon acquisition by our tax advisors.

Please note that this is a high-level illustration of the investment opportunity.

Class A - Limited Partner (A):

• Coupon of 7% - 8% per annum (based on investment amount)

• Investors first receive preferred return (coupon)

• GP then has catch-up to 35% of amounts distributed

• Investors receive profit participation via Equity Waterfall

Equity Waterfall Illustration:

• to a 12% IRR 65% (LP) and 35% (GP)

• to a 15% IRR 50% (LP) and 50% (GP)

• thereafter, 35% (LP) and 65% (GP)

THE LEADERSHIP TEAM

Robert founded ARC Multifamily Group and is a real estate industry veteran with over 2 decades of investing and operating experience. In addition to managing capital and structuring deals, Robert has personally managed over $120+ million of construction and value add projects.

Sharran brings diverse real estate experience from investing to owning and operating large real estate companies including brokerage, mortgage, escrow and property management. He is former Goldman Sachs and Credit Suisse Banker.

Monique brings 20+ years of asset management experience to ARC. She has deep experience in value-add multifamily repositioning projects, including construction project management and financial asset management. Monique has her degree Business Administration from Lake Michigan College and leads the operations team out of Atlanta.

Key Highlights:

▪ Acquired and developed over 250+ projects

▪ Raised and managed over $170m of capital

▪ Recently acquired over 800 units in GA and AL

▪ BSc Engineering, University of Waterloo

▪ MBA, UC Irvine

▪ Resides in Orange County CA with his family

Key Highlights:

▪ 10+ years investing and operating real estate

▪ Sold Teles Properties $3.4B to Douglas Elliman

▪ Goldman Sachs, Credit Suisse, VC & PE

▪ 4x Inc. 500 Entrepreneur

▪ BA Computer Science & Math, Luther College

▪ MBA Honors, Vanderbilt University

Tim brings 15+ years of acquisitions and property management experience to ARC. He has deep experience with underwriting and market analysis, combined with value-add asset management experience. Tim received his BA in real estate from Austin Peay State and leads the acquisitions team based out of Atlanta.

ARC MULTIFAMILY GROUP TRACK RECORD

THE GATES AT SOUTHBEND