Annual Report 2023 Affordable Central Texas

2023 ANNUAL REPORT

AUSTIN HOUSING CONSERVANCY FUND

Monica Medina President & CEO

CEO LETTER

As I reflect on my first year as President and now CEO of this amazing organization, I am filled with gratitude and enthusiasm for the future. This year marks a significant milestone for us as we celebrate our fifth anniversary. Since our inception, we have been steadfast in our mission to preserve moderate-income rental housing in Central Texas while providing a stable, low risk return for our investors. Our journey over the past five years has been both impactful and inspiring. I want to extend my heartfelt thanks to David Steinwedell, our founder, former CEO and now Chairman for his hard work and dedication, which have laid a wonderful foundation for us to scale and achieve even greater success.

In the face of challenging economic conditions, we had a successful 2023. We added eight properties to the portfolio, maintained our distribution rate, and increased our net income by 23%. We are thrilled to announce that we secured our largest investment to date – a $10,000,000 commitment from PNC Bank. This substantial investment has propelled us closer to our $50,000,000 capital raise campaign, currently at an impressive $45,515,000. Due to market dynamics, including rising interest rates and an oversupply of multifamily units in greater Austin, we reduced our

Net Asset Value by 8.6%. However, our portfolio consistently outperformed the balance of the market thanks to our high percentage of affordable units, which insulated us from the supply issues impacting market-rate communities that saw declines of up to 20%. Since inception, the Fund’s total return is 7.2%, compared to the NAREIT multifamily sector’s 5.9%.

This year, we also welcomed a new member to our team, Missy Saez, enhancing our expertise and capacity. Missy is our new Real Estate Asset Manager and brings over 20 years of property and asset management experience and is already making significant contributions to our portfolio management and strategic planning.

Our journey of growth and expansion is further highlighted by our recent decision to rebrand. As we evolve it is crucial for our identity and our branding to reflect our broader ambition to preserve affordable housing across other major markets in Texas.

Looking ahead, I am confident that our dedicated team, along with the strong support from our investors, board, and partners, will drive us to even greater heights. Thank you for your continued support and partnership. Together, we are making a lasting difference in the lives of many families and contributing to the vibrant communities of Central and soon throughout Texas. I am excited about the future and look forward to celebrating many more milestones with you.

CHAIRMAN LETTER

The past year witnessed significant positive change and growth for ACT and the Fund that continued into 2024 with senior leadership changes and the evolution of our board of directors. Monica Medina assumed the role of CEO in January 2024 which allowed me to transition to Board Chair with the retirement of Steve LeBlanc from the board of directors. Steve was a founding board member and was a great supporter of the Fund, we will miss his leadership and guidance. We have been very fortunate to add two new board members, Shar Kassam – former Deputy CIO of the Texas Employee Retirement System and Jenn Wenzel, Director of Real Estate in the Investment Management Division at the Texas Teacher Retirement System. Their experience will help guide the Fund as we expand our investor base to more institutional participants as well as our geographic footprint to San Antonio, Dallas and Houston over the next few years.

David Steinwedell Founder & Board Chairman

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austinhousingconservancy.com

THE AUSTIN HOUSING CONSERVANCY OBJECTIVES

IMPACT FUND THAT DELIVERS RETURNS...

The Fund has achieved a five-year annualized 7.2% return

AHC has outperformed the NCREIF – NFIODCE and NAREIT Residential indexes on a five-year annualized basis

AHC’s workforce affordable multifamily housing portfolio has proved to be less volatile than comparable indexes

Steadily increasing Net Asset Value and per unit returns

Annualized return may differ based on timing of investment in the Fund Past returns are not indicative of future performance

Returns in excess of 5% preferred are split with the non-profit sponsor and manager of Fund, ACT, and reinvested into the Fund to add to stability and alignment of interest. As of year-end 2023, ACT is the 2nd largest investor in the Fund.

austinhousingconservancy.com 3

Low Volatility

Solid Returns INVESTOR PROFILE

4 CURRENT STATUS AND ASSETS UNDER MANAGEMENT 14 Properties 2150 Units 4000 Residents Purchase Price $383,514,316 FUND PORTFOLIO The Preserve at Wells Branch: 308 units - 1 The Bridge at Terracina: 170 units - 2 The Bridge at Northwest Hills: 314 units - 3 Melrose Trail Apartments: 183 units - 4 Agave at South Congress: 195 units - 5 The Bridge at Monarch Bluffs: 330 units - 6 The Retreat at North Bluff 240 units - 7 The Preserve Hyde Park 5 properties - 94 units - 8-12 The Preserve Central Park 108 units - 13 The Bridge at Volente 208 units - 14 austinhousingconservancy.com 4 14 1 2 8-13 3 5 6 7 6 7 13 14 8-12 1 2 3 4 5 Austin Housing Conservancy is the first ever institutional quality investment fund managed by a non-profit preserving workforce affordable housing

•Monica Medina joins leadership team at ACT

• Awarded ULI Austin’s “Next Big Idea” Award (youtube)

•

Nominated for the Greater Austin Chamber of Commerce Affordability Award 2023 (youtube)

•

Closed on the Hyde Park Portfolio with the Austin Housing Finance Corporation – 6 properties are in partnership with AHFC/1 property and an office building are owned by AHFC. (KXAN Video)

•Austin Housing Conservancy Fund formed and first capital raised

•First Property Acquisition in partnership with the Housing Authority of the City of Austin (HACA) and CDT

•First Austin Community Foundation DAF investment

•Capital raise reaches $4,703,100

•PNC Bank commits to $10 million investment

•30% of investors have increased commitments

• Capital Raise hits $46 million

• ULI Americas Award for Excellence Finalist

• 2024 Austin Business Journal Affordability Award - David Steinwedell

•Moderate-Income Rental Housing research report published

•MSDF converts PRI to investment

•$1 million charitable contribution received to invest in Fund

•$50 Million Capital Raise Committee formed

•First property purchased in partnership with the Austin Housing Finance Corporation – Retreat at North Bluff

• ACT Together Program created providing social wraparound programs and financial assistance

•Capital raised reached $9,280,100

•Awarded the United States Conference of Mayors OUTSTANDING ACHIEVEMENT 2019 Metropolitan City Community WINS Grant

• Texas Capital Bank

•Capital raise reaches $7,955,100

•Austin’s Strategic Housing Blueprint, adopted by City Council recommended a “Strike Fund” which became the Austin Housing Conservancy Fund (AustinTexas.gov)

•Affordable Central Texas formed as 501 (C)3 nonprofit

•Affordable Central Texas Interview with David Steinwedell

•ULI Terwilliger Center and NeighborWorks co-sponsor research on various Fund structures

•Austin’s Mayor convenes a task force on workforce affordability

• ULI – Austin hosts a Technical Assistance Panel on funding structures

6 2024 2023 2022 2020 2017

• COVID Pandemic

2019

• Foster Angel partnership

2018

2016 2015

FINANCIAL REPORT

THE AUSTIN HOUSING CONSERVANCY

BALANCE SHEET PROFIT & LOSS

ASSETS

INVESTMENT IN COMPANIES

Bridge atNorthwestHills

PreserveWellsBranch

Bridge atTerracina

MelroseTrail

AgaveSouthCongress

MonarchSouthAustin

Retreat atNorthBluff

Preserve at Hyde Park

Preserve at Central Park

Bridge at Volente

OTHER ASSETS Cash

TOTAL ASSETS

LIABILITIES AND EQUITY

LIABILITIES

DuetoACT-Pass-throughExpenses

TOTAL LIABILITIES

CONTINGENCY

Total Partner’s Equity

TOTAL LIABILITIES AND EQUITY 1,210,000 5,501,004 707,737 1,049,326 1,428,664 3,504,141 10,607,451 1,954,281 2,099,493 2,629,056 327,164 $31,018,317 88,719 $88,719 30,929,598 $31,018,317

INCOME

Income/(Loss)fromPortfolioProperties

OTHER INCOME

Interest

TOTAL INCOME

EXPENSES

Operating Expenses Bank Fees Management Fees Interest

TOTAL EXPENSES

NET INCOME (Loss) As of December 31, 2023 671,100 22,034 $693,134 70,929 17,791 427,866 6,961 $532,547 $169,585

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EMPOWERING COMMUNITIES THROUGHA 5-YEARJOURNEY

As we commemorate our 5th anniversary, we reflect on the incredible journey of empowerment and upliftment we’ve embarked on together. ACT Affordable Central Texas has evolved into a beacon of hope and opportunity thanks to the unwavering support of our partners, volunteers, donors, and dedicated teams.

Engaging Communities Through Vibrant Events

In 2023 alone, our collaboration with AMP and Tipton led to 169 vibrant Community and Social Events, uniting 3,361 residents in moments of joy and camaraderie. These events, filled with laughter and shared experiences, highlight our commitment to fostering strong bonds within our neighborhoods.

Impactful Programs Transforming Lives

Since 2020, our Impact Programs have touched the lives of thousands. From financial literacy sessions with Frost Bank to abundant Farmer’s Markets across our properties, we’ve addressed essential aspects of residents’ well-being. With 301 events and 10,223 participants from 2020 to 2023, these programs have grown significantly, making a lasting impact.

Empowering Through Education and Wellness

Our collaborations extend beyond property management. Partnerships with esteemed institutions like Huston Tillotson University have allowed us to explore into STEM education, nurturing young minds for a brighter future. Health and nutrition workshops, along with financial wellness programs, have equipped residents with crucial skills for a better quality of life.

A Legacy of Giving Back

The ACT Together Program, established in 2020, is a testament to our commitment to giving back. Through charitable initiatives and partnerships, we’ve raised vital funds to support social wraparound programs, ensuring no resident is left behind on their journey toward a brighter tomorrow. Over the years, we have handed out 900 backpacks filled with school supplies to prep all our grade school students across our portfolio, demonstrating our ongoing dedication to fostering educational success and community well-being.

A Heartfelt Thank You

Our portfolio has maintained an average resident retention of 62.6% over the years, compared to the national average of 55.7%. This achievement demonstrates our partners’ and contributors’ dedication and hard work in creating thriving communities.

We extend our deepest gratitude to our partners—Apartment Management Professionals, the Tipton Group, Apartment Life, and all contributors. Your support fuels our mission and inspires us to make meaningful impact.

Together, we celebrate not just five years but a journey of countless lives touched and transformed, a testament to our collective efforts and shared commitment.

austinhousingconservancy.com 8 PROGRAMS

GOVERNANCE STRUCTURE

AFFORDABLE CENTRAL TEXAS

BOARD OF DIRECTORS

A balance of expertise in real estate and affordable housing

Chairman

David Steinwedell Founder ACT

Audit Chair

Brian Strickland

Former CFO, ACT

Treasurer

Ashley Hunter

A Hunter Company

Secretary

Marianne Dwight

Frances Ferguson

Mueller Foundation

Printice Gary

Carleton Residential

Sharmila Kassam

Independent Trustee

Jennifer Wenzel

Texas Retirement System

LIMITED PARTNER ADVISORY COMMITTEE

Select valuation firm and oversee valuation process

Kirk Rudy, Endeavor Real Estate

Vicki Husband, Amherst Residential

Greg Clay, JMI Realty

Dan Ferreri, Marbella Interests, LLC

Perry Lorenz, real estate developer

Katherine Groves, PNC Bank

6000 N. Lamar, Suite 200, Austin,Texas 78752

Affordable Central Texas (ACT) is a 501 (c)(3) and is the sponsor and investment manager of the Austin Housing Conservancy Fund. ACT was formed in 2016 by a group of highly experienced Austin real estate, finance and affordable housing professionals.

A Broad Base of Experience

The team at Affordable Central Texas has a broad base of experience to support the investments and mission of The Austin Housing Conservancy Fund.

Throughout their careers, the members of the team have demonstrated investment acumen, financial expertise and local knowledge. With more than 20+ years of experience each, senior team members have completed over $15 billion in capital market transactions and overseen single asset to multibillion dollar funds utilizing REIT, 1031, and LP structures in core, value add and opportunistic strategies.

Combined, the team has over 60 years of Austin experience including leadership positions at AIC Ventures, Teacher Retirement System of Texas, The Real Estate Council of Austin, The LBJ Foundation and The Urban Land Institute.