LETTER FROM THE PRESIDENT
BRANDON SMITH President & CEO
Greetings to all and I hope that you and your families have been enjoying the summer. We are excited to bring you an update as to the student housing industry, the Tailwind Group portfolio, and exciting changes happening internally.
First and foremost, I am excited to announce that Krystal Pierce has been promoted to Chief Relationship Officer and will continue to serve in her role as General Counsel. Over the past couple of years, Krystal has continued to shift more attention and focus to our capital raising efforts and has a passion and talent for relationship-building with our current and prospective investors. This promotion cements her as our leader for all things investor relations and fundraising, and we could not be more excited about the future. She cares deeply about Tailwind Group, its team members, and our investors and we could not think of a better role for her.
With that, we are also excited to formally introduce Jon Fahning as our new Vice President of Investor Relations. Jon has worked with Tailwind Group for the past two years. He has 30+ years’ experience in the real estate industry and has built countless connections and relationships over that period. Jon brings tremendous passion and energy to work every day, and we are excited to bring his relationship-building and networking tools into the department on a full-time basis.
Industry & Portfolio Update
As we wind down the summer, the industry and our portfolio sit in a unique position. Across the country, leasing velocity and rent growth have leveled off or slightly decreased in certain markets compared to the past couple of record-breaking years. As we have conversations with other operators across the country, they are all feeling similar stress and challenges of approaching move-in day with occupancy and/or revenue goals yet to be achieved. This creates an interesting, “Why is this happening?” question, one that we believe is not a black and white answer but is a confluence of many factors. It is important, however, to recognize that student housing remains an incredibly steady and consistent performer in terms of year-over-year NOI growth. Unlike other classes of real estate, where you see big upswings followed by big downswings, student housing remains a consistent performer. What we believe we’re experiencing in 2025 is, in the simplest of terms, a reversion to prior year averages in terms of occupancy and rental rate growth. With all that being said, there are a few drivers of that reversion, in our view.
First, in the past two leasing cycles, the portfolio occupancy outcome was largely driven by leasing velocity from September to the middle of May, which coincidentally represents the time that most students are on-campus. Leasing activity over the summer months was comparatively much slower. This cycle, the industry is seeing higher leasing activity in June and July than we saw in April and May, which represents a marked shift in our renter behavior. The data would suggest that renters know that housing is available even up to weeks prior to move-in day and are making much more patient decisions versus rushing into a lease 8-10 months before move-in day.
Second, international student leasing velocity has also slowed from pre-pandemic levels due to an uncertain geopolitical climate and tension regarding renewal and issuance of student visas. We have spoken to representatives at universities who are advising their international students not to sign leases for the 25-26 academic year until there is more clarity around their student visa status. Our discussions with international student brokerages would also support this.
Lastly, affordability is continuing to become a larger talking point. With the success of the last two leasing cycles, rent growth in our industry was outsized. Organic rate growth and continued (albeit slowed) high-rent new construction deliveries have, in many markets, driven average market rental rates to unsustainable levels. In some markets, we have observed students look to non-traditional housing options that are more affordable such as commuting from nearby conventional multifamily properties or renting single-family homes with multiple roommates to control costs.
These three “headwinds” are how we summarize the current state of the industry as it relates to leasing. We continue to have very strong convictions about the industry, and especially in our portfolio. We feel that our portfolio and our investment thesis is uniquely positioned to combat these issues due to our broad price appeal and market selection.
During the period of May 15th – July 15th during last year’s leasing season, our portfolio had an increase in preleasing of 7.79%. During that same period in 2025, we increased preleasing by 14.48%. We believe this supports the idea that we are moving more into a true, 12-month preleasing cycle versus the 9–10-month cycle that we experienced in the past several years. This also makes us optimistic about what leasing results we will continue to see all the way up to and even after move-in day.
We believe our entire investment thesis and strategy is built to withstand and capitalize on the growing concern over affordability. In looking exclusively at acquiring value-add properties with an attractive cost basis, we typically enter the market on the low-end to the lower-middle end of the rent spectrum. Our renovation and management value-add strategy allow us to inject strategic capital into the project and generate sizable rent growth, while still being positioned in the middle to higher-middle end of the rent spectrum. With current construction costs, interest rates, and cost of capital – we see this gap only continuing to widen. This positions us to deliver an excellent product and living experience at an affordable price point relative to new developments. According to a recent report from Berkadia, rent growth in properties that are 1.5 miles or further from campus has outpaced rent growth from properties less than .5 miles from campus by 1.2%.
It’s important to note that even as leasing velocity and rent growth have tapered, the overall fundamentals of the student housing industry are strong relative to other real estate classes. Preleasing occupancy is just under 88% near the middle of July with 4.5% rent growth year-over-year, according to College House. Again, we think of this year’s leasing dynamic as more of a “regression to the mean” than a problem.
In summary, we remain strong believers in the strong fundamentals and outlook of the off-campus student housing industry. We especially believe in our ongoing investment strategy to target value-add opportunities at tier one universities with a great cost basis. 21 out of 23 universities that we serve saw 1.5% or better enrollment growth from Fall 2023 to Fall 2024. That, combined with dwindling supply (overall bed delivery expected to decrease every year for the next four years, according to Yardi Matrix), and a broad affordability appeal give us confidence in our ability to continue to provide a great product at an attractive price point to our residents across the portfolio.
Warm regards,
BRANDON SMITH President & Chief Executive Officer
OPENING REMARKS
KRYSTAL PIERCE Chief Relationship Officer & General Counsel
Happy Summer! We hope you’re enjoying the warmth, sunshine, and everything this season has to offer. Over the past few months, our Investor Relations team has had the pleasure of connecting with many of you—through individual meetings, small group gatherings, and larger events. These moments of connection are the highlight of our work, and we’re grateful for the opportunity to engage directly with our valued investors.
Looking ahead to the Fall, we’re planning visits to Mankato, Sioux Falls, and Des Moines. If one of these upcoming events fits your schedule, we’d love to see you there!
Celebrating Growth
As we reflect on the first half of 2025, one word stands out: growth
• Growth in our relationships, thanks to your continued engagement and trust
• Growth in the assets Tailwind owns and manages
• Growth in the team that supports our investors and operations
Our friends-and-family investor base grew by more than 20 brand-new investors this year— relationships garnered largely through referrals from you. We deeply value these introductions and are honored by the confidence you’ve placed in us.
Expanding Our Portfolio
The first half of the year has seen exciting additions to our investment platform and property portfolio. We launched the Tailwind Income Fund, a new investment vehicle designed for preferred class investment. It’s already playing a pivotal role in our strategic expansion.
Here’s a quick look at the properties acquired:
• Altitude Columbus – Ohio State University, Ohio (Income Fund)
• Quarters Auburn – Auburn University, Alabama (Income Fund)
• Quarters Huntsville – Sam Houston State, Texas (Income Fund & Common - Limited Partner)
• Quarters Gainesville – University of Florida (Preferred Partner & Common - Limited Partner)
**Please be sure to check the newsletter for upcoming investment opportunities!
Our team remains focused on deliberate, well-researched growth, with a continued emphasis on opportunities in the SEC and Big Ten conferences.
Expanding Our Team
We’re thrilled to welcome Jon Fahning, Vice President of Investor Relations, to the Tailwind team. Jon brings a strong background in development and a wealth of relationships built over years in the industry. His passion for people and alignment with our relationship-first culture make him an invaluable addition to our department. As our investor base and portfolio continue to grow, we’re excited to scale our professional team to ensure every investor receives exceptional service. Our expansion plan not only creates pathways for new talent but also empowers our existing team to grow and thrive.
Looking Ahead
Student housing continues to be a resilient and high-performing sector. As noted in Student Housing Business Magazine, the Southeast and Big Ten regions are “home to public universities with record-setting enrollment and strong pre-leasing demand.” (Built for the Long Game, Willy Walker, May/June 2025 page 93) “In 2024, student housing transaction volume hit $8.5 billion – a 4 3 percent increase year-over-year.” (Walker 93) This volume is only set to continue. “Investors who understand this space and act decisively stand to benefit.” (Walker 93)
Even though the Tailwind portfolio has seen rent growth at numbers slightly under last year, the student housing sector continues to outperform conventional multifamily, and “operational resilience during downturns has made it a core strategy, not a speculative play” (Walker 93). And with Tailwind’s “value-add” strategy, we can benefit from producing what the modern student wants and needs – without the cost burden of new developments.
As also noted in the article, with a strong start to the year, “investors who align with experienced advisors, act decisively, and focus on high-demand university markets are well-positioned to outperform.” (Walker 93) Let’s continue building on our shared momentum and exploring new opportunities—together.
We look forward to connecting with many of you this next quarter. Thank you for your continued support and trust in Tailwind.
KRYSTAL PIERCE Chief Relationship Officer & General Counsel
MARKET RECAP
The information below is from the Yardi Matrix Student Housing Report as of June 2025.
TOP 25 STUDENT HOUSING MARKET FUNDAMENTALS
UNIVERSITY
#1 University of Missouri
#2 University of Alabama
#3 Virginia Tech
#4 University of Kentucky
#5 University of Wisconsin
#6 Penn State
#7 Auburn University
#8 University of Texas
#9 University of Tennessee
#10 University of Central Florida
#11 Louisiana State University
#12 University of Arkansas
#13 Purdue University
#14 University of Georgia
#15 Michigan State
#16 North Carolina State
#17 University of Illinois
#18 University of Oklahoma
#19 Arizona State University
#20 University of South Carolina
#21 Iowa State
#22 Indiana University
#23 University of Florida
#24 Clemson University
#25 University of Washington
STUDENT HOUSING INVESTING
WHY IS STUDENT HOUSING A STRONG INVESTMENT?
Strong Supply & Demand Fundamentals
• Across the country, Tier 1 (25,000+ students) and Tier 2 (10,000-25,000 students) have shown consistent and steady enrollment growth. Tailwind Group targets Tier 1 and Tier 2 schools.
• In the current economic environment, new development is becoming more and more challenging. For three consecutive academic cycles, total new purpose-built student housing bed deliveries has decreased. For the new two academic cycles, new development is projected to decrease in consecutive years. This marks five straight potential years of decrease in new supply combined with steady enrollment growth, marking positive fundamentals for the student housing space.
• Fall of 2023 = 44,746 new beds delivered
• Fall of 2024 = 36,306 new beds delivered (23% decrease YoY)
• Fall of 2025 = 28,454 new beds on schedule to deliver (27% decrease YoY)
• Fall of 2026 = 27,751 new beds under construction (2.5% decrease YoY projected)
• Fall of 2027 = 25,230 new beds planned for construction (9% decreased YoY projected)
• On-campus housing is becoming less and less attractive and Universities are turning to off-campus partnerships versus construction new dormitories or renovating existing, largely due to cost factors.
• The average age of on-campus facilities in the United States is 49 years old.
Resiliency & Consistency In Uncertain Times
• Student housing does not see the same robust growth and “boom” that multifamily, industrial, and other real estate sectors experience, but it also has not seen the major drops. Consistent and steady growth has been a staple of our industry.
• Economic recessions historically boost college enrollment. The financial crisis of 2008 caused a significant spike in enrollment, with an increase in nearly 3 million students from 2008-2011.
• The COVID-19 pandemic that began in 2020 caused nearly every University in the country to completely shut-down their in-person operations, including on-campus housing. The Tailwind Group portfolio, and our industry, saw increased occupancy during this period and delinquency remained very stable. This is a testament to our conviction that students want to be a part of their college community, even if they can take classes online. It also speaks to the stability of requiring parental guarantors on over 90% of our leases.
Strong Returns & Yields
• Student housing investments often deliver lower cap rates and higher cash-on-cash returns than traditional multifamily investments, especially those that are well located, well maintained, and in a strong market.
• Multifamily properties offer more stable year-round occupancy and may have less volatility, but their per unit versus per bed leasing style drives lower rental income and potentially lower yields. There is also significantly more competition and supply in the multifamily than student housing sector.
TAILWIND GROUP SPOTLIGHT
CASEY PETERSEN AS CHIEF OPERATING OFFICER
Tailwind Group is pleased to announce the hiring of Casey Petersen, who will serve as the organization’s Chief Operating Officer (COO).
With a proven track record in the student housing industry, Petersen brings extensive experience in all facets of leadership, operations, business development, strategic growth, and driving organizational efficiency. Prior to joining Tailwind Group, he most recently served as PeakMade Real Estate’s COO, where he was responsible for all aspects of the operating platform, including marketing, leasing, training, property management operations, and support functions.
Petersen will work as part of Tailwind Group’s Executive Leadership Team. He will lead and manage the core operational teams, utilizing his unique skillset and experience to drive operational performance and maximize value at each asset. Casey’s role will be critical as Tailwind continues to grow and scale its real estate portfolio and operational teams, specifically in student housing “I’ve been admiring the organization from the sidelines for the past several years and am super impressed with everything that has been accomplished. In speaking with the leadership team, I know that we are closely aligned in our view that people – customers, partners, or team members – are the center point of any successful company in our business. I’m excited to join the team and be a part of leading the next chapter of the Tailwind story,” commented Petersen.
Tailwind Group’s President and Chief Executive Officer, Brandon Smith, commented, “I could not be more excited to bring Casey in as our COO. His track record of leadership and operational excellence is something that I have observed and been impressed with for the past several years, as we have competed in many similar markets.”
Smith continued, “As I have gotten to know Casey, I am confident that he will grow and enhance Tailwind Group’s workplace culture, which is our top priority. He is a “people first” leader but also brings a tenacity and vision that will be crucial to our ongoing growth and objectives.”
MINNESOTA’S TOP WORKPLACES
TOP 200 WORKPLACES TO WORK IN MINNESOTA
We are thrilled to share that Tailwind Group has been named a 2025 Star Tribune Top 200 Workplace for the second year in a row!
This recognition reflects our incredible team and the culture we’ve built together. At Tailwind Group, we strive to fight for the highest possible good of the people who matter most, and this award is a testament to that commitment.
Quarters Lawrence
University of Kansas
INVESTMENT OVERVIEW
No. Beds
No.
Amenity Renovations
Acquisition Type
Lender Type
Acquisition Date
Hold Period
Disposition
• Leased to 100% with enrollment growth
• Renovated clubhouse & performed capital exterior improvements
• Multiple years in a row of double digit rent growth
CURRENT EVENTS
EXCELSIOR, MINNESOTA OPEN HOUSE
TWINS WITH TAFT LAW FIRM
As our partnership with Taft continues to grow, we’re fortunate to be invited each year to a Minnesota Twins game. This year, we had the added bonus of touring the stadium before the game. We’re incredibly grateful to Taft for providing such a great opportunity to connect and spend quality time together outside the office.
A big thank you to our incredible investors, bankers, legal partners, and industry friends who joined us on June 20th for our open house in Excelsior, Minnesota!
With over 75 attendees throughout the afternoon, we’re grateful for the time you spent connecting with our team and celebrating our newly renovated office space.
TAILWIND GIVES BACK - FEDERATED CHALLENGE
Tailwind is proud to support The Federated Challenge—a two-day gala and golf event hosted by Nick and Jessica Lower of Federated Insurance—to benefit the life-changing work of the Big Brother Big Sisters organization.
TAILWIND GIVES BACK - THIELEN FOUNDATION
Tailwind is proud to support The Thielen Foundation, as its mission and values align with our own. The recent celebrity softball event was an impactful way to show our support toward the Ham Family Scholarship Fund.
REMEMBERING LARRY ZIPKIN
A MENTOR & FRIEND: HONORING LARRY ZIPKIN
Larry Zipkin was more than raising capital for Student Housing never expected.
One of the most defining moments that didn’t rely primarily on guided the structure of the project set the tone for everything leap forward.
Larry embodied the very values mission: to fight for the highest and the communities we serve. and always put people first.
As a mentor, Larry was direct honesty, persistence, and clarity with a lot of red ink. Larry was joke that any document sent
And then there was his humor—dry, not to take ourselves too seriously, the people around him.
Some of our best conversations business, part friendship, always highlight of my month and
But at the center of Larry’s universe talked, always with admiration, to or the little things he did that nothing brought him more
Above all, Larry was my friend. presence brought comfort,
Though Larry is no longer with profoundly grateful for the years
Rest in peace, Larry. You are
a business partner—he was a mentor, a confidant, and a true friend. Beginning in 2013, our work together Housing Investments at Tailwind Group laid the foundation for a relationship that would shape my life in ways I
moments in our journey was our first deal together: College Town Mankato. It was Tailwind’s first capital raise our company or family resources. It was a pivotal moment for us—and Larry was integral to its success. He deal with clarity and precision, and his leadership during the raise itself was nothing short of masterful. That everything that followed, and I will always remember how Larry’s wisdom and strategic insight helped us take that
values that define Tailwind—prioritizing people and demonstrating unwavering integrity. He lived out our highest possible good of the people that matter most to us—our team members, residents, investors, partners, serve. Larry didn’t just believe in that mission—he practiced it. He built trust through action, led with character, first.
direct and to the point. He didn’t sugarcoat things, and that’s exactly what made his guidance so valuable. His clarity were hallmarks of his teaching style. I valued every moment of learning from him—even when it came was incredibly well-written and could always be counted on to provide detailed feedback. It became a running sent his way would come back covered in strikethroughs and notes—but it was always better for it.
humor—dry, quick, and perfectly timed. Larry had a way of cutting through tension with a single line, reminding us seriously, even when the stakes were high. His laughter was a constant reminder of the joy he found in life and in
conversations happened over our monthly lunches at Bacio in Minnetonka. Those meals became a ritual—part always meaningful. Whether we were discussing strategy or just catching up on life, those moments were a a reflection of the bond we shared.
universe was always his family—especially his beloved wife, Shirley. He spoke of her nearly every time we admiration, tenderness, and pride. He took such good care of her, often mentioning the appointments he’d take her to make her day easier. He also loved sharing stories about his children and grandchildren, and it was clear more joy than being a husband, father, and grandfather.
friend. He stood by me through challenges, celebrated the wins, and always made time for what mattered. His clarity, and a sense of groundedness that I will miss deeply.
with us, his spirit lives on in the lives he touched, the lessons he taught, and the legacy he leaves behind. I am years we shared and the friendship we built.
are missed beyond measure and remembered with love.
MICHAEL SATHER Chief Investment Officer Managing Principal
INVESTMENT OPPORTUNITIES
SMALL AMOUNT REMAINING
The Quarters offers investors an opportunity to invest in one class with attractive returns.
• Class B: 8% Preferred Return +7% Supplemental Return + 25% Residual Profit
2025 MEN’S
NATIONAL CHAMPIONS
55,000+ STUDENTS
- UNIT RENOVATIONS
TO REPLACEMENT COST
24-HOUR FITNESS CENTER
RESORT SWIMMING POOL
DOG PARK
COFFEE BAR
ABUNDANT PARKING
THREE BUS STOPS
1 MILE FROM CAMPUS
INVESTMENT OPPORTUNITIES
TAILWIND INCOME FUND I
OFFERING TYPE: 10% PREFERRED RETURN
The Tailwind Group is excited to introduce the Tailwind Income Fund I. This fund will focus on value-add student which remain the cornerstone of the Tailwind portfolio. Tailwind Income Fund I offers accredited investors diversify their portfolios, with the potential to achieve an annual return of 10%. By investing in multiple real is preferred in structure, this fund provides built-in diversification, unlike investing in a single real estate asset. Tailwind Income Fund I will play a key role in driving the continued growth and success of our portfolio, thanks thematic investment strategy in the value-add student housing sector.
Altitude Columbus Ohio State University
*Note Structure Investment
The Lofts Morgantown West Virginia University *Preferred Equity Investment
The Quarters Auburn Auburn University
*Note Structure Investment
Quarters Sam Houston *Preferred
*Preferred
The
Tailwind Income Fund I Investors
student housing opportunities, a unique opportunity to estate assets, at a level which asset. We are confident that the thanks to our high conviction and
INCOME FUND HIGHLIGHTS
INVESTMENT STRATEGY
• Generate strong cash on cash returns through Preferred Equity & mezzanine debt investments
• Diversification in Assets: 4 - 7 projects
• Liquidity Flexibility
WHY PREFERRED EQUITY & MEZZANINE DEBT
• Protection Priority over common equity in the capital structure
• Demand Tighter bank lending standards; lower initial loan to value
• Project Type Value-Add Projects provide ability to refinance and repay investment
PURPOSE OF FUND
• Refinancing Provide capital to projects refinancing debt
• Property Improvement Provide capital to assets needing capital improvement
• Acquisition Capital Provide capital to acquire new Tailwind assets
BLENDED TAX TREATMENT
Quarters Huntsville
Houston State University
*Preferred Equity Investment
Future Project
*Preferred Equity Investment
• Tax impact varies depending upon underlying investments
• If investment as Preferred, taxed as capital gains
• If investment as unsecured notes, taxed as ordinary income (interest income)
INVESTMENT CRITERIA
• Tailwind Sponsored Projects
• Value-Add Student Housing
• Investment Size: $5M - $10M
• Income Fund Distribution: 10%
• Term: 3 - 5 years
COMING THIS FALL!
Morgantown
Morgantown offers investors an opportunity to invest in one class with attractive returns.
•
24-HOUR FITNESS CENTER
RESORT SWIMMING POOL
DOG PARK
COFFEE BAR
ABUNDANT PARKING
SHUTTLE TO CAMPUS
2 MILES FROM CAMPUS
RENOVATIONS
SUMMER 2025
INVESTOR NEWSLETTER