Quarters Vermillion

The Q uarters at Verm illio n Investo r Up d ate | Q 4 2020 Michael Sather, CFO - Tailwind Group

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Debt refinance completed in October.

Achieving a 1.5% interest rate savings, resulting in a loan payment reduction of $19K monthly

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Although pre-lease is behind last year, new Leasing Manager is gaining traction. Has signed 96 leases since Jan. 1 with prime leasing weeks still in front of him. Momentum is building.

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Delinquency has been running around 4%, which is good considering the current environment.

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Google rating remains strong at 4.7/5. Resident engagement and satisfaction remains high.

Good News

Challenges

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Pre-lease is 21% behind last year

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Covid has significantly impacted leasing decisions as students wait to hear school plans for the fall.

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Transition to new Regional Mgr., Property Mgr., and Leasing Mgr. this past fall. It has taken some time for them to hit their stride but are now gaining ground.

Property Up d ates

93 Percent Current Occupancy

Pre-Lease Percentag e For the 2021-2022 AY

39% Pre-Leased February 2021

Pre-leasing is off to a slow start compared to last year's pace

Metrics and KPIs

Executive Summary The Quarters at Vermillion

Operating Cash Flow* Q4 2020: $213K Q3 2020: $116

* One time costs are removed from operating cash flows Dollars in thousands (000s)

NOI

Occupancy

Q4 2020: $473

Q4 2020: 96%

Q3 2020: $507

Q3 2020: 97%

OOP: $455

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

$ 473 $ 507 $ 419 $ 382 $ 445 $ 141 $ 455

Operating Cash Flow $ 213 $ 116 $ 105 $ Profit Margin

73 $ 127 $

(63) $

79

73%

79%

72%

66%

73%

-200%

69%

6.52%

6.99%

5.77%

5.27%

6.14%

1.94%

6.27%

Occupancy

96%

97%

93%

93%

95%

93%

95%

Pre-Leasing

21%

0%

72%

42%

n/a

n/a

n/a

YOC*

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

Metrics and KPIs Recap Q4 Net Operating Income (NOI) 8% growth compared to 2020 YTD average Positives: 

Lower vacancy starting with new academic year

Full Year 2020 NOI (2%) decline compared to Original Operating Plan Positives: 

Expenses are being managed very well, $143K below the original plan

Negatives:  

6% of market rent increases have not been realized Vacancy is higher than planned

Metrics and KPIs Recap Operating Cash Flow

 Q4 operating cash flow benefited from the refinance of the mortgage ($19K less in payments monthly)  $378K excluded from operating cash flow calculation, this was used to refinance the loan and will reduce future cash flow burden

Yield Over Cost (YOC)  Cost control has resulted in an increased YOC

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

Investment Performance

Capital Balance: $6,545,000 Total Monthly Distribution: $49,500 Total Investment Distributions: $742,500 Distributions will be evaluated on a month-to-month basis due to the effects of COVID-19

Bank Financing

nada

Bank

Loan Amount

Interest Rate

Monthly P&I Pmt

Current

Pactola Lending

23,000,000

3.8%

107,000

Previous

American National

22,560,000

5.3%

126,000

Variance

440,000

1.5%

19,000

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Corporate Leasing Specialist will be on-site assisting staff to gain pre-lease momentum

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Maintain and grow occupancy

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Steadily increase rents annually

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Monitor Real Estate tax amount as property stabilizes

What's Next

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