Quarters Iowa City

Q uarters Io wa C ity Investo r Up d ate | Q uarter 4 2020 Michael Sather, C FO Tailwind Group

Good News

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Current occupancy at 96%

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Pre-lease at 55%, just 2% behind last year.

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Beating all comps with exception of Latitude which is at 57% pre-lease

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Hired leasing specialist. Focused on sales and reporting to existing leasing manager.

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Resident satisfaction is good with a 4.2/5 google rating.

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Clubhouse now open 24/7 and seeing significant resident activity.

Challenges

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COVID-19 impacting collections; running between 4 and 5% delinquency.

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Slight delay in market leasing momentum due to uncertainty with fall classes

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Spring enrollment is down 7% from the fall semester

Prop erty Upd ates

96 Percent Current Occupancy Market Off Campus Occupancy: 91.4%

Pre- Lease 2020- 2021 55% Pre-Leased February 13th

Pre-leasing is off to an early start Tours: All tours have transitioned to virtual tours due to COVID-19

Chart includes prior year pre-leasing data

University of Iowa Enro llment Trend s

After seeing a decline in 2018 and forecasting a small decline in 2019 the University is projecting future growth.

Future pipeline shows 400 beds to be delivered in 2022 term and 2,500 beds for the 2023 term.

*F is Forecasted Information from AxioMetrics *September 2020

Metrics and KPIs

Executive Summary Q uarters at Io wa C ity

Current Occupancy 12/31/2020: 95% 09/30/2020: 97%

Operating Cash Flow Q4 2020: $284,000 Q3 2020: $15,000

NOI Growth Q4 2020: $950,000 Q3 2020: $797,000

Dollars in thousands Q4 2020 Q3 2020 Q2 2020 Q1 2020 YTD Avg 2019** OOP*** NOI

$ 950 $ 797 $ 863 $ 736 $ 836 $ 873 $ 964

Operating Cash Flow $ 284 $ Profit Margin

15 $

(7) $ (155) $

34 $

(87) $ 326

60%

53%

59%

51%

56%

56%

59%

6.22%

5.22%

5.65%

4.82%

5.47%

5.72%

6.31%

Occupancy

95%

97%

86%

85%

n/a

85%

95%

Pre-Leasing

56%

40%

93%

73%

n/a

n/a

n/a

YOC*

*Yield Over Cost Annualized **Quarterly Average ***Original Operating Plan for the 2020 Academic Year

Metrics and KPIs Recap Q4 Net Operating Income (NOI) 19% growth compared to 2020 YTD average Positives: 

Vacancy, losses, and concessions reduced to 8% of market rent from prior 19%

Full Year 2020 NOI (13%) decline compared to Original Operating Plan Positives: 

Expenses in line with plan

Negatives:  

Market rent increases planned for have not been realized Vacancy has historically trended below the planned 4%

Metrics and KPIs Recap cont..

Operating Cash Flow is significantly higher than 2020 YTD average    

Vacancy, losses and concessions fell to 8% of gross rents from 19% Minimal capital expenditures in Q4 2020 Reduced bus rental costs ($64K in Q1) Cash flow expected to continue to strengthen

Yield Over Cost (YOC)  Increase from 2019 due to stronger NOI mainly due to occupancy  Lower than the plan mainly due to lack of market rate adjustments and lower occupancy than planned (95% vs. 96%)

NOTE: Cost can be calculated in various ways. For the purpose of this calculation, Tailwind inputted 'Total Project Cost'

Balance Sheet Recap

1.27X Current Ratio

Current Assets: $1.4M • • • •

$441K cash $463K escrow $388K prepaids $74K AR

Current Liabilities: $1.1M • • • •

$143K accounts payable $213K accrued interest $229K accrued property tax $415K security deposits & prepaid rent

Current Ratio is comparable to 2019, no significant changes Current Ratio is calculated by dividing Current Assets over Current Liabilities. Our goal is to create a liquidity position of 1X.

Investment performance

D istrib ution O utlo o k Distributions have commenced for Quarters Iowa City effective December 10, 2020.

Effective payout rate is 2%, and will be maintained until further notice.

Significant factors that may impact future distributions • • • •

Property Tax - unknown exact timing in expense reduction Final Occupancy for 2021 COVID-19 Effects Mortgage converting to amortizing in December of 2021 (increasing payment by ~$60K per month)

Current Debt

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$50,849,000

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Fannie Mae Loan

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10 Year Term

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3 Years interest only payments

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30 Year Amortization

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4.88% Interest Rate

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Collect on Past Receivables

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Internet provider change; future cost savings

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Grow revenues / control promotions for long-term stability

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Monitor ability to maintain distributions

Whats Next

Michael Sather, CFO Tailwind Group msather@thetailwindgroup.com investors@thetailwindgroup.com