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HomeMy WebLinkAbout2019 02 14 Other, American Core Realty Fund PresentationFebruary 14, 2019 City of Winter Springs General Employee Retirement System AAMERICAN REALTY ADVISORS INSTITUTIONAL CAPITAL MANAGEMENT Disclosures American Realty Advisors 1 2 This presentation is for your information only and is neither an offer to sell nor a solicitation of an offer to buy any securities or financial instruments. The securities to which this presentation relates have not been, and will not be registered under the U.S. Securities Act of 1933, as amended, any other U.S. federal or state or non -U.S. securities laws or the laws of any non -U.S. jurisdiction. The information in these materials is intended solely for "Accredited Investors" within the meaning of Rule 501 of Regulation D under the U.S. Securities Act of 1933. Any product or service referred to herein may not be suitable for any or all persons. The information in this presentation has been obtained or derived from sources believed by American Realty Advisors ("ARA") to be reliable but ARA does not represent that this information is accurate or complete. Any opinions or estimates contained in this presentation represent the judgment of ARA at the time this presentation was prepared and are subject to change without notice. They should not be considered promises or advice. Performance analysis is based on certain assumptions with respect to significant factors that may prove not to be as assumed. You should understand these assumptions and evaluate whether they are appropriate for your purposes. Performance results are often based on mathematical models that use inputs to calculate results. As with all models, results may vary significantly depending upon the value of the inputs given. Models used in any analysis may be proprietary, making the results difficult for any third party to reproduce. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. Photos used in this presentation were selected based on visual appearance, are used for illustrative purposes only, and are not necessarily reflective of all the investments in the fund or the investments the fund will make in the future. Investments discussed in this presentation are expected to involve the economic and business risks generally inherent in real estate investments of the type the Fund intends to make. A major risk of owning income-producing properties is the possibility that the properties will not generate income sufficient to meet operating expenses, to service any loans that are secured by the properties or to fund adequate reserves for capital expenditures. The income from properties may be affected by many factors, including, but not limited to, fluctuations in occupancy levels, operating expenses and rental income (which in turn may be adversely affected by general and local economic conditions); the supply of and demand for properties of the type in which the Fund invests; energy shortages; compliance by tenants with the terms of their leases; collection difficulties; the enactment of unfavorable environmental or zoning laws; Federal and local rent controls; other laws and regulations; and changes in real property tax rates. The marketability and value of any properties of the Fund will depend on a number of factors beyond the control of the Fund, including, but not limited to, those previously described. Furthermore, there can be no assurance that a ready market for the properties of the Fund will exist at any particular time, since investments in real properties are generally considered to be more illiquid than publicly -traded securities. Any return to the investors on their investment will depend upon factors that cannot be predicted at the time of investment, that may be beyond the control of the Fund, or that may be uninsurable or not economically insurable (such as losses caused by earthquakes, terrorism or floods). Such factors will also affect the return to the investors on their investment. The description of certain risk factors in this presentation does not purport to be a complete enumeration or explanation of the risks involved in an investment in the Fund. Investors should read the Fund's confidential offering memorandum and consult with their own advisors before deciding to subscribe or invest. In addition, as the investment markets and Fund develop and change over time, an investment may be subject to additional and different risk factors. No assurance can be made that profits will be achieved or that substantial losses will not be incurred. American Core Realty Fund is authorized to borrow up to 40% of the total gross value of the real estate assets owned by the Fund and is not required to reduce debt in the event the total value of their real estate declines. Please review the applicable provisions in the limited partnership agreement and investment policy statement. The use of leverage introduces the risk that cash flow from properties so encumbered, or from other sources, may not be sufficient to service the secured debt and therefore could result in the loss of equity through foreclosure. This presentation should be considered confidential and may not be reproduced in whole or in part, and may not be circulated or redelivered to any person without the prior written consent of ARA. This presentation is intended for the Fund's investors, their consultants, and prospective investors only. Past performance is not a guide to or otherwise indicative of future results. As with all investments there are associated inherent risks. The investments made by the Fund and described herein are not FDIC insured, are not bank guaranteed, are not guaranteed by ARA and may lose value. A Disclosures American Realty Advisors 1 3 ARA will receive fees or other compensation in connection with capital invested in the Fund (the details of which are further described in the Fund's confidential offering memoranda). Accordingly, ARA has a financial interest which precludes it from providing impartial investment advice or making recommendations in a fiduciary capacity in connection with potential investments by investors investing assets of employee benefit plans or IRAs. You must exercise your own independentjudgment in determining whether to invest in the Fund ARA is not acting and cannot act as your fiduciary under the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or the Internal Revenue Code of 1986, as amended in connection with a decision to invest in the Fund. This presentation (and any other information or discussion provided by ARA or its agents in conjunction therewith) is solely designed to provide information that may be helpful for investors to consider an investment in the Fund and not to provide you with any investment recommendation, suggestion or advice. Further, this presentation is not intended for ERISA plans or IRAs, other than a fiduciary of such plan or IRA that is an "independent fiduciary with financial expertise" as described in 29 C.F.R. Sec. 2510.3-21(c)(1). This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as "trend," "potential," "opportunity," "pipeline," "believe," "comfortable," "expect," "anticipate," "current," "intention," "estimate," "position," "assume," "outlook," "continue," "remain," "maintain," "sustain," "seek," "achieve," and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "may" or similar expressions. American Realty Advisors ("ARA") cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and ARA assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance. In addition to factors previously disclosed in the Fund's disclosure documents and those identified elsewhere in this presentation, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: (1) the introduction, withdrawal, success and timing of business initiatives and strategies by ARA on behalf of the Fund and/or by others in its industry; (2) changes in political, economic or industry conditions, the interest rate environment or financial and capital markets; (3) the relative and absolute investment performance and operations of the Fund's investments; (4) the impact of increased competition in the financial, capital and real estate markets; (5) the impact of capital improvement projects in the real estate markets; (6) the impact of future acquisitions and divestitures by the Fund, its competitors and other participants in the financial, capital and real estate markets; (7) the favorable or unfavorable resolution of legal proceedings affecting the Fund's investments; (8) the impact, extent and timing of technological changes; (9) the impact of legislative and regulatory actions and reforms and increasing regulatory, supervisory or enforcement actions of government agencies relating to the Fund's investments; (10) terrorist activities, which may adversely affect the general economy, real estate, financial and capital markets and specific industries; (11) the ability of ARA to attract and retain highly talented professionals; and (12) the impact of changes to the tax code and tax legislation in general. A I\ American Realty Advisors Committed to Excellence G1 Our mission is to create and implement client -focused institutional real estate investment strategies designed to provide superior returns, capital preservation, and growth, delivered with a high level of integrity, communication, and service. Putting Our Clients First ARA is 100% employee owned and client focused. The firm was registered in 1990 with the U.S. Securities and Exchange Commission as an Investment Advisor under the Investment Advisers Act of 1940. ARA is also a fiduciary to its clients and acts in the best interests of our investors. American Realty Advisors 11 r 0111 01 �11'4141 ��00 ��Rl0to 1016t;# �Is010� 4+;��R;'�;#; J0000100111101 0 0 r ,, `•, to1p Not Rt, r r 110006 M 1�t�•i++R''�1 �rr�N0 opet+l+b+'� 19r00rr■ 00000 ;:;i PO 010 V10 &DIP11,41 f I�IiE li��fi� ti1100irr to oo �' �• _ 0 0000 00 f46�'.f1J 061001 "0000� 100�0rr�}ins ,�,rrrrrrN� r isfit t ►u,,.jMN■M■■rtrrii� ��4tif mammon Fillet, ■ � 11 �� ��lijau 'r pilot# I% t� 1111't W About ARA American Realty Advisors 1 5 Today's Presenter A Richelle Hayes Senior Vice President, Investor Relations Years of investment experience: 24 years Education: University of Central Florida: B.S.; Webster University: M.B.A., M.A., Health Services Richelle Hayes is ARA's Senior Vice President, Investor Relations, responsible for developing and maintaining new and existing client and consultant relationships for ARA's commingled fund clients. She is based out of the firm's Orlando office. Prior tojoining ARA, Ms. Hayes was Vice President of Client Services for ICC Capital Management, where she worked closely with clients and consultants based in the Southeast U.S. Prior to that, she was Vice President, Corporate Relations for the American Hospital Association in Florida, responsible for developing client relationships with senior executives of member hospitals, following various positions in financial relationship management within the national managed health care industry. Ms. Hayes is currently the Secretary on the Advisory Board of the Florida Public Pension Trustee Association. About American Realty Advisors AMERICAN REALTY ADVISORS About ARA We Are Leaders in Real Estate Investment Management Accounting, Administration, Asset Management, Corporate, Los Angeles Investments, (Headquarters) Legal/Compliance, Marketing/Client Service, Portfolio Management, Research Boston Investments Asset Management, Chicago Dispositions, Marketing/Client Service, Portfolio Management Connecticut Asset Management, Marketing/ Client Service Orange County Asset Management Orlando Philadelphia San Francisco Marketing/Client Service Investments Asset Management, Investments Note: All data as of September 30, 2018. About ARA Continued AUM Growth • ARA is a leading privately held real estate investment manager. • The firm is 100% employee owned and client -focused. 7 0 0 V) D $c $8,247 (tQ n11 19 65 65 131 173 204 218 222 245 291 316 362 386 402 480 502 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 American Realty Advisors 1 8 $9,3billion in AUM 539 Institutional Investors Assets under management represent approximate gross market value of all assets and accounts managed by ARA excluding partners' share of equity and partners' share of debt on partnership investments. All data is as of September 30, 2018. About ARA American Realty Advisors 1 9 Risk Management and Client Focus: The Foundation of Our Firm > Extensive experience acting as a fiduciary investing in accordance with state and federal fiduciary guidelines > Risk control forms the basis of our investment process • Legal/Compliance and Risk Management department involved in all aspects of transactions • Avoidance of conflicts of interest • No litigation with clients concerning investment management services provided by ARA > Defined culture of teamwork and integrity > Sole focus on institutional real estate investment builds strong alignment of interests with our investors > Recognition of our role as a steward of the capital for plan participants and their beneficiaries A ARA Core Values Our five core values guide all decision making, define our commitment to our clients, direct our firm's character and culture, and ensure what we stand for.__. Integrity Transparency Fiduciary Standards Collaboration Corporate and Community Responsibility About ARA Our Commitment to Sustainable Investing Vision > To create a positive impact far beyond our buildings and operations. Mission > To conduct our business and investment activities in a responsible and sustainable manner that adds value to our clients and communities. Performance Targets I overa loyearperiod Energy Efficiency Water Efficiency • `. American Realty Advisors F Ice Waste Reduction •'• Carbon Emissions • `. G • Note: Data as of: September 30, 2018. References to Energy Star awarded & LEED certified assets relate to properties in all portfolios managed by ARA. A 5.9mm SQUARE FEET of LEED certified assets The American Gore Realty Fund JL AMERICAN REALTY ADVISORS American Core Realty Fund American Core Realty Fund > Investing primarily in high-quality core income-producing Office, Industrial, Retail, and Multi -Family properties > We implement a research -based approach targeting well located properties in the top submarkets within major metropolitan areas nationwide > The Core Fund's mission is to provide its investors with broad based private commercial real estate exposure and attractive risk-adjusted returns > Target performance of 7-9% gross returns over a full market cycle RealtyAdvisors 1 12 The performance target above is an estimate based on information available at the time of forecasting and is not a guarantee of future results, It is important to understand that investments of the type made by the Fund pose the potential for loss of capital over any time period, Many factors affect fund performance, including changes in market conditions and interest rates in response to other economic, political, or financial developments, Investment returns, and the principal value of any investment, will fluctuate, so that, when an investment is sold, the amount received could be less than what was originally invested, Please refer to disclosures at the beginning of this presentation, American Core Realty Fund American Realty Advisors 1 13 Core Fund Portfolio Management Team Leadership Scott Darling Austin Maddux President Executive Vice President 38 yrs. industry experience 77 yrs. industry experience 46 Execution David K. Hubbs Glen S. Weisberg Rick Massa Executive Vice President, Executive Vice President, Executive Vice President, Portfolio Management Portfolio Management Portfolio Management Western Region Commercial Multi -Family Investments Eastern Region Commercial L Investments Investments T 38 yrs. industry experience X 28 yrs. industry experience 78 yrs. industry experience Implementation Bradley Tober Dillon Wong Timothy Chiu Assistant Vice President, 1,1 Assistant Vice President, Anal st, Portfolio Management 6 r ! Associate Portfolio Manager Portfolio Management, y g . . industry experience 77 yrs. industry experience 4 yrs. industry experience yrs A American Core Realty Fund Fund Snapshot As of December 31, 2018 Gross Asset Value $7.19 billion Net Asset Value $5.10 billion Number of Investments 73 Cash Position 0.9% MAL Leverage Ratio 23% ex LOC 24% incl LOC Total Square Footage 15.2 million Total Commercial Tenants 522 Units (Multi -Family) 2,845 Leased Percentage 95.0% Inception Date 4Q 2003 Capital Flows Number of Investors 434 Undrawn Commitments' $0 million Redemption Queue $0 million American Realty Advisors 1 14 Northshore I Austin, TX r A IUse of leverage may create additional risks. Please refer to disclosures at the beginning of this presentation. Square footage and units excludes developments. Undrawn commitments are as of January 2, 2019. American Core Realty Fund American Realty Advisors 1 15 City of Winter Springs General Employee Retirement System Net Contributions to Date 2007 2008 2014 2015 NET INVESTMENT $ 250,000 750,000 438,000 562,000 $ 2,000,000 Investment Summary as of December 31, 2018 Performance History Through December 31, 2018 I nception-to-Date Contributions $ 2,000,000 Redemptions - Net Income 434,895 Distributions (597,748) Appreciation 213,727 ENDING NET ASSET VALUE $ 2,050,874 Performance History Through December 31, 2018 (%) 4Q18 1 Year 3 Year Inception: 10/01/2007 5 Year 10 Year Since Inception Income (Gross) 0.93 3.88 3.94 4.36 4.87 4.81 Appreciation 1.00 4.68 3.88 5.56 1.20 0.33 TOTAL PORTFOLIO (Gross) 1.93 8.69 7.93 10.10 6.12 5.16 NFI-ODCE (Gross) 1.76 8.35 8.24 10.41 7.00 5.40 TOTAL PORTFOLIO (Net) 1.65 7.50 6.76 8.90 4.98 4.04 NFI-ODCE (Net) 1.52 7.36 7.27 9.41 6.01 4.44 Returns greater than one year are annualized, PERFORMANCE DISCLAIMER The returns above are for the City of Winter Springs General Employee Retirement System's investment in the American Core Realty Fund, include leveraged returns before (gross) and after (net) the deduction of investment management fees and include the reinvestment of some income. The sum of annualized component returns may not equal the total return due to the chain -linking of quarterly returns. The NFI-ODCE Value Weight is an unmanaged index published by the National Council of Real Estate Investment Fiduciaries. NFI-ODCE returns are shown before (gross) and after (net) the deduction of any investment management fees and include leverage. Although the Fund may invest in similar property types as the NFI-ODCE, the weighting of each property type will differ from the NFI-ODCE in any measurement period. The performance information is considered supplemental information and complements the attached Core Commingled Real Estate Investments Composite performance. Past performance is not a guarantee of future results and it is important to understand that investments of the type made by the Fund pose the potential for loss of capital over any time period. Many factors affect fund performance including changes in market conditions and interest rates in response to other economic, political, or financial developments. Investment returns, and the principal value of any investment will fluctuate, so that when an investment is sold, the amount received could be less than what was originally invested. Use of leverage may create additional risks. Please refer to disclosures at the beginning ofthis presentation. American Core Realty Fund American Realty Advisors 1 16 Key Business Plan Metrics 2019 Targets $400 - $500M $400-$500M 94.5% - 95.5% $275 - 285M 5.0%-6.0% 4.00% - 4.25% 2.25% - 3.00% 6.25% - 7.25% gross 6.5 yrs - 7.0 yrs 450-550 22% - 24% The income return and appreciation return projections above are estimates based on information available as of December 31, 2015. The 2015 estimated total returns include leveraged returns before (gross) and after (net) the deduction of investment management fees and reflect the reinvestment of some income. The 2015 estimated returns are calculated at the Core Fund level and may not be reflective of the actual performance returns experienced by any one investor. The projections and past performance are not a guarantee of future results. It is important to understand that investments of the type noted above pose the potential for loss of capital over any time period. Many factors affect asset performance including changes in market conditions and interest rates in response to other economic, political, or financial developments. Investment returns, and the principal value of any investment will fluctuate, so that when an investment is sold, the amount received and the actual returns realized could be Tess than what was originally invested or that estimated attire time the investment was made. Use of leverage may create additional risks. Please refer to disclosures attire beginning of this presentation. 2018 Target 2018 Results Acquisitions MM $700 - $800M $1,050M Active fund management Dispositions $350 - $450M $326M Percentage 94.0% - 94.5% 95.0% Leased Net Operating $235M - $244M $260M > Net operating income Income growth driven by strong NOI Growth ° 3.4/° 5.1% portfolio leasing levels, (Same Store) in-place contractual rental rate escalations, and Income Return 4.00% - 4.25% 3.89% moderate market rent increases Appreciation 2.50% - 3.25% 4.69% Return 6.50% - 7.50% 8.71% gross Total Return gross (7.65/° net) > Core real estate yields are Weighted Average 6.0 yrs - 6.5 yrs 6.6 yrs returning to long-term Lease Expiration average levels Number of Tenants 450-550 520 23% ex LOC24% Fund Leverage 21% - 23% incl LOC 2019 Targets $400 - $500M $400-$500M 94.5% - 95.5% $275 - 285M 5.0%-6.0% 4.00% - 4.25% 2.25% - 3.00% 6.25% - 7.25% gross 6.5 yrs - 7.0 yrs 450-550 22% - 24% The income return and appreciation return projections above are estimates based on information available as of December 31, 2015. The 2015 estimated total returns include leveraged returns before (gross) and after (net) the deduction of investment management fees and reflect the reinvestment of some income. The 2015 estimated returns are calculated at the Core Fund level and may not be reflective of the actual performance returns experienced by any one investor. The projections and past performance are not a guarantee of future results. It is important to understand that investments of the type noted above pose the potential for loss of capital over any time period. Many factors affect asset performance including changes in market conditions and interest rates in response to other economic, political, or financial developments. Investment returns, and the principal value of any investment will fluctuate, so that when an investment is sold, the amount received and the actual returns realized could be Tess than what was originally invested or that estimated attire time the investment was made. Use of leverage may create additional risks. Please refer to disclosures attire beginning of this presentation. American Core Realty Fund American Realty Advisors 1 17 Investment Activity: Dispositions Last Ten Dispositions Property Name Built/ Renovation Disposition Date Metro Property Type Age at Disposition Sale Price Swift Center 2006 06/14/2017 Addison, IL Industrial 11 $23,300,000 Newport Corporate Tower 1990 09/14/2017 Orange County, Office 27 $75,032,487 CA ALARA Greenwood Village 1995 09/14/2017 Denver, CO Multi -Family 22 $91,000,000 1101 141h Street 1982 11/01/2017 Washington, DC Office 35 $61,621,123 150 N. Wacker Drive 1970/1992 11/21/2017 Chicago, IL Office 25 $79,916,584 Great America Tech Center 1979/2006 12/20/2017 San Jose, CA Office 11 $36,091,000 ALARA Links at Westridge 2004 07/24/2018 Los Angeles, CA Multi -Family 14 $84,500,000 South Loop Market Place 1998 08/31/2018 Chicago, IL Retail 20 $49,969,000 Marshfield Business Park 1997/2001 09/13/2018 Baltimore, MD Industrial 17 $116,315,195 2 Ames Drive 2012/2014 12/20/2018 Harrisburg, PA Industrial 4 $74,600,000 Average 18 $69 million Data as of December 31, 2018. American Core Realty Fund American Realty Advisors 1 18 Investment Activity: Acquisitions Last Ten Acquisitions Data as of December 31, 2018. Leased Percentage, Average Age and Average Leased Percentage exclude development and redevelopment properties. Acquisitions exclude investments in mortgage-backed certificates. Built/ Acquisition Property Age at Leased Purchase Price/ Property Name Renovated Date Metro Type Acquisition Percentage Total Cost Logan Logistics Center 2017 11/01/2017 Philadelphia, PA Industrial 1 100% $113,000,000 Miami Central Commons 1979 12/15/2017 Miami, FL Industrial N/A N/A $85,500,000 Central Park Commons 2016 12/20/2017 Minneapolis, MN Retail 2 100% $126,250,000 385 Sherman Avenue 2016 01/18/2018 San Jose/Santa Office 2 97% $138,000,000 Clara, CA Transal Park 1989/1998 01/19/2018 Miami, FL Industrial N/A 100% $22,800,000 1730 Anaheim Way 2018 05/03/2018 Orange County, Industrial < 1 100% $33,100,000 CA Northshore 2016 08/23/2018 Austin, TX Multi -Family 2 96% $313,000,000 Azure on the Park 2016 09/07/2018 Atlanta, GA Multi -Family 2 96% $132,500,000 Moda Tower 1999 09/28/2018 Portland, OR Office 19 88% $176,250,000 121 Seaport 2018 12/13/2018 Boston, MA Office <1 100% $229,120,956 Average 3.6 98% $136 m i l I ion , Data as of December 31, 2018. Leased Percentage, Average Age and Average Leased Percentage exclude development and redevelopment properties. Acquisitions exclude investments in mortgage-backed certificates. American Core Realty Fund American Realty Advisors 1 19 Accretive and Outperforming Investment Strategy As a result of repositioning, the Core Fund outperformed in 2017, 2018 and is expected to do so in 2019. > Income Growth Drivers • Same-store net operating income growth of 5.1% over the last twelve months and 3.8% on average over the last five years. • Commercial leases 7% below current market with upside potential as near-term leases expire. • 2019-2020 expected average annual income growth of 7.8% including 2.9% contractual rent growth in 2019. > Allocation Decisions • Property type allocation resulted in outperformance particularly overweight to industrial. • Primary market selection strategy also contributed to outperformance particularly a 1.7x overweight to SF Bay Area. > Asset Selection • Recent acquisitions this recovery cycle comprising 82% of the portfolio, outperformed the NFI-ODCE acquisitions and overall NFI-ODCE property returns by 176 bps and 154 bps over the last twelve months, respectively. > Structured Investments/Manage-to-Core • Structured investments providing 9% income return. • Manage -to -core investments at 4.5% of the fund should add to outperformance as they stabilize over the next 2-3 years. Note, Data is as of December 31, 2018, Returns referenced in Asset Selection above relate only to acquisitions made after January 1, 2011 - the start of the recovery cycle, Those returns are for the American Core Realty Fund and include unleveraged returns before (gross) the deduction of investment management fees and include the reinvestment of some income, The NFI-ODCE returns are before (gross) the deduction of any investment management fees and do not include leverage, Although the Fund may invest In similar property types as the NFI-ODCE, the weighting of each property type will differ from the NFI-ODCE In any measurement period, The NFI-ODCE Value Weight is an unmanaged index published by the National Council of Real Estate Investment Fiduciaries, Past performance is not a guarantee of future results ad it is important to understand that investments of the type made by the Fund pose the potential for loss of capital over any time period, Many factors affect fund performance including changes in market conditions and interest rates in response to other economic, political, or financial developments, Investment returns, and the principal value of any investment will fluctuate, so that when an investment is sold, the amount received could be less than what was originally invested, Use of leverage may create additional risks, Please refer to disclosures atthe beginning of this presentation, American Core Realty Fund Balanced Portfolio Composition Seattle Portland Denver San Francisco O O Bay Area Inland Empire Los Angeles Orange County San Diego Investment Exposure per Market 0 <$50M O $50M -$150M O$15OM-$300M O>$300M Minneapolis 0 ChicagO r American Realty Advisors 1 20 Boston New York Philadelphia Baltimore Washington, D.C. Raleigh mqrjms-au- '94W At Dallasfjj O Jacksonville Austin Osouth Houston Florida Geographic Diversification West 41.5% Midwest 10.0% East 31.1% 5outn 17.4% Sector Diversification Office 38.8% Rete . . 18.3% Multi -Family 24.8% 1uustrial 18.1% Portfolio diversification based on gross fair values as of December 31, 2018. Investment exposure by market and geographic diversification excludes investments in mortgage-backed certificates. ARA's Commitment to Florida > ARA's Florida Portfolio Property Name City Type SF Kendall Place Miami Retail 287,915 St. John's Town Center Jacksonville Retail 98,900 Weston Lakes Plaza Weston Retail 96,451 41h Street at Delray Beach Delray Beach Retail/Office 98,404* Miami Central Commons Doral Industrial 950,670* Transal Park Doral Industrial 180,000* > Why We Believe in Florida • Strong projected population growth, economic potential, favorable real estate fundamentals, and competitive tax environment. • The third fastest state population growth rate from 2010 to 2018 at 13.3%.' • Booming GDP which surpassed $1 trillion in 2018 has grown over 40% in the last 10 years.z Florida trails only California, Texas, and New York, and as a country, its GDP would rank 17th in the world .3 • Low unemployment at 3.3%, below the U.S. average of 3.9%.4 • Miami, Ft. Lauderdale, and Palm Beach metro employment gains have outpaced the nation over the last five years and are expected to outperform in the next five.5 • Miami metro has outperformed the NPI over the last 5, 10, and 20 - years for major property types and Florida is projected to have above average long-term NOI growth.6 • Ranked as the fourth most business tax -friendly state in the country .7 `Build -to -core investment. Represents the expected fully developed size. A'U.S. Census 2 Bureau of Economic Analysis - U.S. Department of Commerce 3 World Bank 4 U.S. Department of Labor -Bureau of Labor Statistics American Realty Advisors 1 21 ARA has committed $480 million of capital in the state of Florida Commitment by Property Type (Millions) $213 Industrial $207 Reta i I $45M Jacksonville Delray Beach $60M Weston $42M $213M $ Doral 120M $60 Miami Retail/Office > ARA's Investment Activities • ARA has committed $275 million of capital since May 2017, consisting of retail, industrial and office properties in several South Florida cities. • Two current build -to -core projects: 4th Street at Delray Beach and Miami Central Commons are helping create jobs and providing the infrastructure needed to support a competitive business landscape. 5 Moody's Analytics 6 National Council of Real Estate Investment Fiduciaries Tax Foundation State Business Tax Climate Information herein is as of December 31, 2018 unless noted otherwise. American Core Realty Fund American Realty Advisors i 22 Portfolio Holdings Consistently Within Target Ranges > Property Type Mix American Core Realty Fund vs. NFI-ODCE American Core Realty Fund NFI-ODCE 1 Core Fund Target Range — Two Year Investment Plan Target > Geographic Mix American Core Realty Fund vs. NFI-ODCE American Core Realty Fund NFI-ODCE Core Fund Target Range — Two Year Investment Plan Target 50% 40% - ---------- 39% 5 0 /o , ----- - - - - -- , 30% ;25% 26% 18% 19% ; - 18% ------------ ----o--I' ; 20% , 1-16% � � - - jff10% = - - 4% 0% 11 - Industrial Multi -Family Retail Office Other 50% 40% 30% 20% 10% 0% 17% lg 0 , South 32% , 31% Midwest East Source: NIFI-ODCE Index as of December 31, 2018, This analysis represents the American Core Realty Fund portfolio as of December 31, 2018 using gross fair value, Geographic Mix excludes investments in mortgage-backed certificates, Information is taken from sources believed to be reliable but accuracy cannot be guaranteed, NFI-ODCE is the NCREIF Fund Index - Open End Diversified Core Equity (value weight) and is an index published by the National Council of Real Estate Investment Fiduciaries (NCREIF), NFI-ODCE-Value Weighted % is based upon gross real estate value, American Core Realty Fund American Realty Advisors 1 23 Diversification Across Target Markets and Property Types > Top 10 Markets Office Office $523,000,000 Reta i I Foundry Square I I I Multi -Family San Francisco, CA Industrial > Top 10 Properties $700 $600 $500 $400 Ln E $300 $200 $100 $0 New York, Boston, MA San Seattle, WA Chicago, IL San Washington, Austin, TX Los NY Francisco, Jose/Santa DC Angeles, CA CA Clara, CA Miami, FL Property Name Type Metro GFV Percentage of Fund 499 Park Avenue Office New York, NY $523,000,000 7.5% Foundry Square I I I Office San Francisco, CA $378,000,000 5.4% 1K Fulton Office Chicago, IL $318,000,000 4.6% Northshore Multi -Family Austin, TX $316,000,000 4.5% 2201 Westlake Office Seattle, WA $293,000,000 4.2% 121 Seaport Office Boston, MA $229,120,956 3.3% University Station Retail Boston, MA $226,000,000 3.2% Cupertino City Center I & I I Office San Jose/Santa Clara, CA $211,000,000 3.0% 153 Townsend Street Office San Francisco, CA $210,000,000 3.0% Continuum Multi -Family Boston, MA $170,005,846 2.4% TOTAL: $2.87 billion 41.3% Based on gross fair value as of December 31, 2018. American Core Realty Fund Stable and Diverse Tenancy > Over 61% of tenancy is estimated to generate in excess of $1 billion in annual revenue > Highly diversified tenancy comprised of 522 unique tenants, reduced from 820 at the beginning of 2016 > 6.6 years of weighted average lease expiration, up from 4.5 at the beginning of 2016 and greater than the NFI-ODCE peer set average of 6.1 years > No single tenant comprises more than 5% of the portfolio's total revenue Ten Largest Tenants by Base Rent , amazon Go gle r R nL�EXION 0 SAFEWAY <I ancestry 0 CJ# LOGISTICS Er American Realty Advisors 1 24 Percentage of Total Base Rent by Business Segment Local Services - Retail E -Commerce & Food 6,56% Transportation & Shipping 7,76% 5,92% Grocery Store 5,50% National Retail 9,92% Durable Goods Manufacturing 5,47% Financial Services & Insurance 13,11% Technology 14, Consulting 5,39% Energy and Mining 4,10% Health Care 3,46% arge Retail Trade 3,08% gal 2,86% Irofit 2,31% ivauui —Chain Restaurant Real Estate Services 1,93% Telecommunications 1,72% > Expiring Commercial Portfolio by Property Type 30% 25% 20% 15% 10% 5% 0% 0 Reta i I 0 Office 0 Industrial 12.3% 10.3% 8.7% 5.2% 1.5% 2.6% I 1. 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027+ 28.1% ARA internal research and estimates. Percentages based on the fund's commercial portfolio gross fair value as of September 30, 2018. American Core Realty Fund Consistently High Leasing Rates Strong current occupancy levels • Core Fund weighted average of 95.0% • All property types at or above 94.1% > Percentage Leased Q4 2018 100% 95.2% 94.9% 95.9% 94.1% 75% 50% 25% 0% Multi -family Office Industrial Retail 95.0% American Realty Advisors 1 25 Highly stable over the long term • The Core Fund average leased percentage over the last ten years is 91.6% • At the lowest quarter during the 2008-2009 global financial crisis, the Core Fund's leased percentage was 86% > Percentage Leased 12 Years - Q4 2006 to Q4 2018 100% — 80% — 60% — 40% 20% — 0% C r r m m M M 00 D m m O O O O O O o U U U U U U U Percent Leased ARA internal research. Q3 2006 to Q4 2013 percentage leased is based on its occupied percentage plus 1.42% which is the average delta between leased and occupied from Q1 2014 to Q4 2018. American Core Realty Fund Conservative Debt Management > Average Leverage Percentage 1 Year 3 Year 5 Year 10 Year American Core Realty Fund 21.9% 20.6% 20.0% 20.0% NFI-ODCE-VW 21.3% 21.6% 21.6% 24.1% 6.2 years of average remaining term 83.0% of the Core Fund's debt is fixed 0000 rate Staggered debt maturities over the next ten years oThe weighted average cost of debt of the Core Fund is 3.97% American Realty Advisors 1 26 > Staggered Debt Expiration Schedule Percentage of Fund GAV 10% 9% 8% 7% ° 6.2% ° 5.2% 5% 4% 3% 2.7% 2.9% 2.1% 2.1% 2% ° 0.7% 0.7% 1 /° 0.0% 0.2% 0% — � M 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028+ $ Millions 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028+ $0 $12 $194 $372 $210 $50 $150 $150 $496 $446 Current Debt Maturities above represent the Core Fund's effective ownership share of the debt principal balances having terminal maturities occurring in each year as a percentage of the total gross asset value of the Core Fund's real estate investments as of December 31, 2018. All leverage and NFI-ODCE information above is as of December 31, 2018. Use of leverage may create additional risks. Please refer to disclosures at the beginning of this presentation. Recent Core Transactions American Realty Advisors 1 27 Quarter Acquired Asset Type Year Built Size Leased Income Yield 10 Year Unlevered IRR Q4 2018 Office 2018 400,000 SF 100% -0.30% Year 1 4.48% Year 3 5.70% - Core Quality Office Asset Class A LEED Platinum 17 -story asset featuring three outdoor terraces, a 5,000 sf tenant -only fitness center, and a three-story lobby facing Seaport Square, Fan Pier Park, and Boston Harbor. The asset acquired in a 55%joint venture includes 58,300 additional sf of ground -floor retail, a three-level parking garage, and features leading sustainability systems. Long -Term Lease with Credit Tenancy 100% leased to two global tenants, an innovative software firm and a biopharmaceutical company, for their headquarter locations on a long term basis providing stable net operating income growth throughout our hold -term. Outstanding Location The property is located within Seaport Square amongst 20 city blocks of office, retail, residential, and hotel space in the highly desirable Seaport submarket of Boston. Quarter Acquired Asset Type Year Built Size Leased Income Yield 10 Year Unlevered IRR Q3 2018 Multi- Family 2016 329 Units 95% 4.56% Year 1 4.98% Year 2 6.17% Newly -Constructed Multi -Family Asset Class A LEED Gold 25 -story high-rise asset featuring an extensive common area amenity package, a rooftop pool, fitness center and "Sky Club" overlooking Piedmont Park. The asset includes 3,436 sf of ground -floor retail, a 464 -stall parking garage, and units with high-end interior finishes, Smart Home integration, stainless steel appliances and in-unitwasher/dryers. Desirable Institutional Core Market Located in the Midtown district of Atlanta, an employment, residential, entertainment and cultural hub within the greater Atlanta Area. Employers include Amazon, Equifax, Georgia Tech, Google, Honeywell, Kaiser Permanente, and NCR. Strategic Location Located across the street from the 189 acre Piedmont Park and separated from the majority of current and future competition within the submarket, the property is walking distance from the public transit system MARTA Midtown Transit Station. Data as of December 31, 2018, The IRR projections above are estimates based on information available as of the date of the underwriting of the investment and are not a guarantee of future results, It is important to understand that investments of the type noted above pose the potential for loss of capital over any time period, Many factors affect asset performance including changes in market conditions and interest rates in response to other economic, political, or financial developments, Investment returns, and the principal value of any investment will fluctuate, so that when an investment is sold, the amount received and the actual returns realized could be less than what was originally invested or that estimated at the time the investment was made, Please refer to disclosures at the beginning of this presentation, Recent Core Transactions American Realty Advisors 1 28 Quarter Acquired Asset Type Year Built Size Leased Income Yield 10 Year Unlevered IRR Q3 2018 Multi- Family 2016 439 Units + 52,000 SF 96% 4.00% 6.01% Core Quality Multi -Family Asset with Office and Retail Components Class A LEED Silver 38 -story property featuring 439 Multi -Family units, 28,066 sf of ground -floor retail space, 24,017 sf of office space, 810 space parking garage, a best -in -class pool deck with an infinity pool and cabanas, outdoor kitchens, fire pits, business center, top of the line finishes, elevated ceilings, in-unitwasher/dryers and 24 hour concierge services. Thriving Submarket Downtown Austin offers substantial job and population growth and features employers: Google, Facebook, Indeed, Under Armour, Bank of America, Deloitte, Parsley Energy, Cirrus Logic, Athena Health and the headquarters for Whole Foods. Exceptional Location The property sits on one full city block in the heart of downtown Austin, adjacent to Lady Bird Lake just walking distance from the University of Texas, Sixth Street, concert venues, grocery stores, restaurants, theaters, Zilker Park and Barton Springs. Quarter Acquired Asset Type Year Built/ Renovated Size Leased Income Yield 10 Year Unlevered IRR Q3 2018 Office 1999 388,649 SF 89% 4.410% Year 1 5.65% Year 3 7 18% Core Quality Office Asset A 24 -story, multi -tenant, 388,649 sf Class A office asset featuring 21,000 sf floor plates and northward views to Mt. St. Helens and eastward views across the Willamette River to Mt. Hood. Immediate Repositioning Opportunity in Strong Submarket with Momentum Opportunity to implement an approved lobby upgrade and common area repositioning to generate projected returns of 150-200 bps over comparable Portland office sales with a known joint venture partner. ,j Desirable Location The property occupies one full city block in the center of the CBD office submarket of downtown Portland. The property offers immediate access to the I-5 Freeway, the Central Eastside across the ki Willamette River, and is situated along the MAX light rail transit system. Data as of December 31, 2018, The IRR projections above are estimates based on information available as of the date of the underwriting of the investment and are not a guarantee of future results. It is important to understand that investments of the type noted above pose the potential for loss of capital over anytime period. Many factors affect asset performance including changes in market conditions and interest rates in response to other economic, political, or financial developments. Investment returns, and the principal value of any investment will fluctuate, so that when an investment is sold, the amount received and the actual returns realized could be less than what was originally invested or that estimated at the time the investment was made. Please refer to disclosures atthe beginning of this presentation. Recent Core Transactions I. , r cu min ■ ■ American Realty Advisors 1 29 Quarter Acquired Asset Type Year Built/ Renovated Size Leased Income Yield 11 Year Unlevered IRR Q2 2018 Industrial 2018 143,930 SF 100% 3.74% 5.73% Newly -Constructed Industrial Asset Class A asset featuring 32' clear height, 60' x 52' bay depths, interior LED lighting, ESFR sprinklers, a rooftop solar array, and visibility from the adjacent 1-5 freeway. Fully Leased to High Quality Tenant The institutional tenant signed a 10 -year lease with 3% annual contractual rent increases, expiring in 2028. Strategic Location Located in the Anaheim submarket of the Orange County market, with strong tenant demand and lack of competitive supply. The property is adjacent to the 1-5 Freeway and is proximate to the SR - 91, SR -57 and SR -22 Freeways, providing easy access to the Los Angeles and Orange County MSAs, airports, ports, and cargo hubs. Quarter Acquired 41 Asset Type Year Built Size Leased Income Yield 7 Year Unlevered IRR Office 2016 67,974 SF 100% 4.50% Q1 2018 6.20% Data as of December 31, 2018, The IRR projections above are estimates based on information available as of the date of the underwriting of the investment and are not a guarantee of future results. It is important to understand that investments of the type noted above pose the potential for loss of capital over anytime period. Many factors affect asset performance including changes in market conditions and interest rates in response to other economic, political, or financial developments. Investment returns, and the principal value of any investment will fluctuate, so that when an investment is sold, the amount received and the actual returns realized could be less than what was originally invested or that estimated at the time the investment was made. Please refer to disclosures atthe beginning of this presentation. fI.I 1 "7�' Newly Built Core Quality Office Building Class A LEED Gold boutique distinguishing features including core office with a permanent public art display on its facade, a rooftop deck, column free floor plates, and floor -to -ceiling glass lines with 14' ceiling heights. Long-term Lease with Credit Tenancy 100% leased to Visa on a long term basis with annual contractual base rent increases, providing solid net operating income growth throughout our hold -term. Transit Oriented Strategic Location Located adjacent to the California Avenue Corridor in the Palo Alto South Submarket. The property offers close proximity to Stanford University, the Stanford Research Park and is walking distance from the Caltrain Station. Data as of December 31, 2018, The IRR projections above are estimates based on information available as of the date of the underwriting of the investment and are not a guarantee of future results. It is important to understand that investments of the type noted above pose the potential for loss of capital over anytime period. Many factors affect asset performance including changes in market conditions and interest rates in response to other economic, political, or financial developments. Investment returns, and the principal value of any investment will fluctuate, so that when an investment is sold, the amount received and the actual returns realized could be less than what was originally invested or that estimated at the time the investment was made. Please refer to disclosures atthe beginning of this presentation. Appendix Asset Type Strategies and Summary of Holdings AMERICAN REALTY ADVISORS American Core Realty Fund American Realty Advisors 131 Summary of Holdings: Office As of December 31, 2018 Stated Net Gross Investments Metro Investment Date SF Ownership Fair Value 2 Fair Value Ballston Gateway Washington, DC 12/23/2003 145,388 100% $63,400,000 $63,400,000 Deerbrook Corporate Center Chicago, IL 07/01/2006 i 133,985 100% $17,900,000 $17,900,000 K Street Off ice3 Washington, DC 03/19/2007 120,778 85% $29,106,568 $42,432,058 Energy Center i Houston, TX 06/27/2011 305,586 100% $88,200,000 $88,200,000 Cupertino City Center I & II San Jose/ 09/28/2011 311,240 100% $211,000,000 $211,000,000 Santa Clara, CA The Quadrangle Dallas, TX 03/31/2012 194,332 100% $56,288,247 $56,288,247 �=Ill i 153 Townsend Street San Francisco, CA 12/04/2012 173,322 100% $164,325,359 $210,000,000 499 Park Avenue New York, NY 06/28/2013 304,769 100% $523,000,000 $523,000,000 2201 Westlake Seattle, WA 07/21/2015 317,102 100% $293,000,000 $293,000,000 One Freedom Plaza4,5 Washington, DC 06/24/2016 283,481 100% $37,978,811 $37,978,811 1K Fulton Chicago, IL 07/01/2016 531,190 100% $318,000,000 $318,000,000 Foundry Square III San Francisco, CA 12/13/2016 292,069 100% $378,000,000 $378,000,000 385 Sherman Avenue San Jose/ 01/18/2018 67,974 100% $140,000,000 $140,000,000 Santa Clara, CA Moda Towel -6 Portland, OR 09/28/2018 410,986 5M $42,450,000 $88,500,000 121 Seaport6 Boston, MA 12/13/2018 400,342 55% $229,120,956 $229,120,956 TOTAL OFFICE REAL ESTATE INVESTMENTS $2,591,769,941 $2,696,820,073 1 Reflects American Core Realty Fund's effective ownership share of the gross fair value ofthe real estate investment less the gross fair value of the mortgage loan 2 Reflects American Core Realty Fund's effective ownership share of the gross fair value of the real estate investment 3 Joint venture investment partnership accounted for using the equity method 4 Development 5 Investment in preferred equity 6 Joint venture investment partnership (consolidated) American Core Realty Fund Summary of Holdings: Industrial As of December 31, 2018 Investments Metro Investment SF Stated Date Ownership California Rosslynn Marquardt Distribution Center Broadway Center Business Park Walnut Avenue Industrial Park SouthWoods Business Center Rancho Cucamonga Distribution Center 10825 Production Avenue Sumner 167 Logistics Center - Building 1 Arrow Center I & II Sumner 167 Logistics Center - Building 2 3100 West Segerstrom GSW Gateway 1 & 2 McCook Logistics Center Shoemaker Distribution Center Orange County, 08/05/2005 CA $45,200,000 Los Angeles, CA 12/13/2005 Los Angeles, CA 08/05/2008 Orange County, 08/05/2008 CA $29,000,000 Atlanta, GA 12/31/2011 Inland Empire, 03/31/2012 CA 100% Inland Empire, 09/18/2012 CA M Seattle, WA 12/03/2013 Inland Empire, 12/20/2013 CA $48,400,000 Seattle, WA 03/24/2014 Orange County, 06/11/2014 CA Dallas, TX 06/11/2014 Chicago, IL 08/08/2014 Los Angeles, CA 12/18/2014 American Realty Advisors 1 32 Net Gross Fair Value' Fair Value 257,246 100% $45,200,000 $45,200,000 123,058 100% $23,900,000 $23,900,000 189,270 100% $29,000,000 $29,000,000 169,196 100% $31,600,000 $31,600,000 531,774 100% $45,200,000 $45,200,000 434,871 100% $33,012,478 $50,800,000 753,170 100% $101,000,000 $101,000,000 234,750 100% $31,400,000 $31,400,000 430,972 100% $35,370,374 $65,000,000 358,598 100% $50,200,000 $50,200,000 159,163 100% $29,200,000 $29,200,000 423,330 100% $32,200,000 $32,200,000 365,359 100% $34,224,731 $48,400,000 174,342 100% $34,700,000 $34,700,000 1 Reflects American Core Realty Fund's effective ownership share of the gross fair value of the real estate investment less the gross fair value of the mortgage loan 2 Reflects American Core Realty Fund's effective ownership share of the gross fair value of the real estate investment American Core Realty Fund Summary of Holdings: Industrial (Continued) As of December 31, 2018 Investments Metro Investment SF Stated Net Date Ownership Fair Value Chantilly Distribution Center Dulles Woods III 1-88 Gateway Logistics Center Crossroads Logistics Center Pacific Commons Logistics Center West3,4 King Mill Distribution Center Park 78 Logistics4 Logan Logistics Center Miami Central Commons3 Transal Park 1730 South Anaheim Way Washington, DC Washington, DC Chicago, IL Harrisburg, PA East Bay, CA Atlanta, GA Harrisburg, PA Philadelphia, PA Miami, FL 06/16/2015 351,456 100% 06/16/2015 102,427 100% 11/13/2015 604,565 11/20/2015 398,250 i 12/28/2015 816,970 04/18/2017 846,496 10/18/2017 345,600 11/01/2017 1,016,116 12/15/2017 813,914 Miami, FL 01/09/2018 134,175 Orange County, CA 05/03/2018 143,930 TOTAL INDUSTRIAL REAL ESTATE INVESTMENTS 100% 98% American Realty Advisors 1 33 $53,300,000 $17,300,000 $52,400,000 $40,400,000 95% $94,166,746 100% 100% $53,100,000 $31,254,361 100% AL $119,000,000 98% $98,485,183 100% $25,300,000 100% $33,600,000 G ross Fair Value $53,300,000 $17,300,000 $52,400,000 $40,400,000 $117,805,478 $53,100,000 $31,254,361 $119,000,000 $98,485,183 $25,300,000 $33,600,000 $1,174,513,873 $1,259,745,022 1 Reflects American Core Realty Fund's effective ownership share of the gross fair value ofthe real estate investment less the gross fair value of the mortgage loan 2 Reflects American Core Realty Fund's effective ownership share of the gross fair value of the real estate investment 3 Joint venture investment partnership accounted for using the equity method 4 Development American Core Realty Fund Summary of Holdings: Multi -Family As of December 31, 2018 Investments Metro Investment Date Units American Realty Advisors 1 34 Stated Net Gross Ownership Fair Value' Fair Value Weston Lakeside Raleigh, NC 02/22/2007 332 units 100% $41,822,327 $61,900,000 Mural Apartments Seattle, WA 03/22/2012 139 units 100% $40,898,719 $55,100,000 Link Apartments Seattle, WA 03/22/2012 199 units 100% $60,804,732 $84,800,000 111 Kent Avenue New York, NY 05/09/2012 62 units 100% $65,200,000 $65,200,000 ALARA Uptown Dallas, TX 09/30/2013 294 units 100% $56,273,830 $78,800,000 Continuum3 Boston, MA %003/14/2014 325 units 83% $102,165,794 $170,005,846 The Chrystie4 New York, NY 09/12/2014 361 units 100% $86,881,666 $86,881,666 =2014 Accent Los Angeles, CA 196 units 100% $92,597,438 $121,000,000 K13,5 San Diego, CA 03/04/2016 226 units 85% $63,075,733 $96,368,531 ALARA Union Station Denver, CO 05/03/2016 314 units W $86,113,129 $156,000,000 i Madison At Racine Chicago, IL 03/14/2017 216 units 100% $82,087,138 $110,000,000 Northshore Austin, TX 08/23/2018 439 units 100% $316,000,000 $316,000,000 ML Azure on the Park Atlanta, GA 09/07/2018 329 units 100% $133,000,000 $133,000,000 Multi -Family Loan Portfoli06 National Portfolio 2016-2018 Various 100% $190,786,419 $190,786,419 TOTAL MULTI -FAMILY REAL ESTATE INVESTMENTS $1,417,706,925 $1,725,842,463 Reflects American Core Realty Fund's effective ownership share of the gross fair value of the real estate investment less the gross fair value of the mortgage loan 2 Reflects American Core Realty Fund's effective ownership share of the gross fair value of the real estate investment 3 Joint venture investment partnership accounted for using the equity method 4 Investment in preferred equity 5 Development 6 Investments in mortgage-backed certificates ALARA is a registered service mark of American Realty Advisors and is used under license American Core Realty Fund Summary of Holdings: Retail As of December 31, 2018 Investments Metro Investment Date SF American Realty Advisors 1 35 Stated Net Gross Ownership Fair Value' Fair Value Waldorf Marketplace I Washington, DC 06/29/2005 205,285 100% $57,400,000 $57,400,000 Kendall Place Miami, FL 03/15/2007 287,896 100% $120,000,000 $120,000,000 Waldorf Marketplace 11 Washington, DC 06/28/2007 168,519 100% $36,400,000 $36,400,000 St. John's Town Center North Jacksonville, FL 01/07/2010 98,900 100% $30,682,490 $45,400,000 i J Festival at Riva Baltimore/Towson, MD 12/29/2010 300,963 100% $106,155,195 $157,000,000 Shops at Waterford East Bay, CA 01/27/2011 124,826 100% $59,279,010 $94,700,000 dftb Alexandria Commons Washington, DC 06/30/2011 154,248 100% $59,142,137 $88,000,000 Miami/ Weston Lakes Plaza Fort Lauderdale, FL 03/31/2012 96,451 100% $42,200,000 $42,200,000 @First Retail Center San Jose/ 05/03/2012 84,271 100% $57,300,000 $57,300,000 Santa Clara, CA Mission Hills Vons San Diego, CA 07/24/2012 63,992 100% $22,116,222 $35,400,000 Admiral Safeway Seattle, WA 07/24/2012 67,992 100% $23,500,099 $37,700,000 Criterion on the Promenade Los Angeles, CA 12/10/2015 52,980 100% $103,000,000 $103,000,000 University Station Boston, MA 08/16/2016 401,402 100% $226,000,000 $226,000,000 41h Street at Delray Beach3A Miami/ 05/16/2017 98,400 92% $43,872,492 $43,872,492 Fort Lauderdale, FL Central Park Commons Minneapolis, MN 12/20/2017 402,598 100% $128,000,000 $128,000,000 TOTAL RETAIL REAL ESTATE INVESTMENTS $1,115,047,645 1,272,372,492 1 Reflects American Core Realty Fund's effective ownership share of the gross fair value of the real estate investment less the gross fair value of the mortgage loan 2 Reflects American Core Realty Fund's effective ownership share of the gross fair value of the real estate investment 3 Joint venture investment partnership accounted for using the equity method 4 Development Appendix AAMERICAN REALTY ADVISORS American Core Realty Fund American Realty Advisors 1 37 Key Terms FUND STRUCTURE Open-end commingled real estate fund structured as a Delaware Limited Partnership. SPONSOR American Realty Advisors registered in 1990 with the U.S. Securities and Exchange Commission as an investment adviser under the Investment Advisers Act of 1940. MINIMUM INVESTMENT $1 million. U.S. investors in the American Core Realty Fund must be an "Accredited Investor" (as defined in Rule 501(a) of Regulation D under the Securities Act). RETURN OBJECTIVE 7-9% gross annual leveraged total gross return over a full market cycle. LEVERAGE TARGET 10 - 30% in aggregate with a maximum of 40%. TYPICAL TRANSACTION SIZE $50 - $250 million. DISTRIBUTION 5% net declared distribution over the past four quarters. May be automatically reinvested in the Fund or paid out quarterly. I VALUATION Quarterly independent appraisals managed by Fund's independent Valuation Manager. REPORTING ARA claims compliance with the Global Investment Performance Standards (GIPS). LIQUIDITY Quarterly redemptions subject to available cash flow. Based on net total investment commitment: ASSET MANAGEMENT FEE > 1.10% - Commitment up to $25 million > 0.95% - Commitment of $25 to $75 million > 0.85% - Commitment of $75 million and up OTHER FEES No other fees charged to investors. Please see the Core Commingled Real Estate Investments Composite at the end of this presentation which includes the firm description, A complete list and description of ARA's composites are available upon request, Use of leverage may create additional risks, Note that there is no guarantee that the above objectives will be achieved over any specific time period, Please refer to disclosures at the beginning of this presentation, Please note that the Asset Management Fee is based on Net Asset Value as outlined in the Fund's Limited Partnership Agreement, About ARA Florida Investor List ■ Bartow General Employees Retirement System ■ ■ Baptist Health South Florida, Inc. ■ ■ Cape Coral Municipal Firefighters' Retirement Plan ■ ■ Cape Coral Municipal Police Officers' Retirement Plan ■ ■ Casselberry Police Officers' and Firefighters' Pension Plan ■ ■ City of Arcadia Police Officers' and Firefighters' Retirement System ■ ■ City of Auburndale Retirement Plan for General Employees ■ • City of Avon Park Firefighters' Retirement System ■ ■ City of Avon Park Police Officers' Retirement System ■ • City of Bradenton Police Officers' Pension Plan ■ ■ City of Brooksville Firefighters' Retirement Trust Fund ■ ■ City of Dania Beach General Employees' Retirement System ■ ■ City of Delray Beach Firefighters' and Police Officers' Retirement System ■ ■ City of Edgewater Police Officers' Retirement Plan ■ ■ City of Fort Walton Beach Police Officers' Retirement Fund ■ ■ City of Gulfport General Employees' Pension Plan ■ ■ City of Gulfport Municipal Police Officers' Trust Fund ■ ■ City of Haines City General Employees' Pension Plan ■ ■ City of Homestead New Elected Officials & Senior Management Retirement System ■ ■ City of Lynn Haven Police Officers' Retirement System ■ ■ City of Lynn Haven General Employees' Retirement System ■ ■ City of Marco Island Firefighters' Pension Fund ■ ■ City of Naples General Employees Retirement Trust ■ ■ City of Naples Police Officers and Firefighters' Retirement Trust ■ ■ City of Punta Gorda General Employees' Pension Fund ■ ■ City of Quincy, Florida Police and Firemen's Supplemental Pension Plan ■ ■ City of Sebring Police Officers' Retirement Trust Fund ■ ■ City of South Pasadena Firefighters' Retirement System ■ ■ City of Tamarac General Employees' Pension Trust Fund ■ ■ City of Winter Park Firefighters' Pension Trust Fund ■ ■ City of Winter Park Police Officers' Pension Plan ■ ■ Clair T. Singerman Employees' Retirement Fund ■ ■ City of Sebring Police Officers' Retirement Trust Fund ■ ■ City of Sebring Municipal Firefighters' Pension Plan ■ ■ Clearwater Firefighters' Supplemental Trust Fund ■ ■ Cocoa General Employees' Retirement Plan ■ ■ Cooper City General Employees Pension Plan ■ ■ Cooper City Police Pension Fund ■ ■ Coral Springs Firefighters' Retirement Plan ■ ■ Coral Springs Police Officers' Pension Plan ■ ■ Dania Beach Fire and Police Pension Plan ■ ■ Davie Firefighters' Pension Trust Fund ■ American Realty Advisors 1 38 Davie Police Pension Fund DeLand Municipal Police Officers' Retirement Plan Deerfield Beach Municipal Firefighters' Pension Trust Fund Deerfield Beach Municipal Police Officers' Retirement Trust Fund Destin Fire Control District Firefighters' Retirement Trust Fund Englewood Area Fire Control District Firefighters' Pension Trust Fund Fernandina Beach General Employees' Pension Plan Fernandina Beach Police Officers' & Firefighters' Pension Plan FOP Ft. Lauderdale Lodge #31 Insurance Trust Fund Fort Lauderdale General Employees' Retirement System Fort Lauderdale Police and Fire Retirement System Grace Contrino Abrams Peace Education Foundation Fort Walton Beach Municipal Firefighters' Pension Trust Fund Greater Naples Fire Rescue District Firefighters' Pension Plan H. Lee Moffitt Cancer Center and Research Institute, Inc. H. Lee Moffitt Cancer Center and Research Institute Foundation, Inc. Hollywood Police Officers' Retirement System Jupiter Police Officers' Retirement Plan Key West General Employees' Pension Plan Key West Utility General Employees Retirement System Kissimmee General Employees' Retirement Plan Lake Mary Firefighters' and Police Officers' Pension Trust Funds Lake Worth Firefighters' Pension Trust Fund Lake Worth General Employees' Retirement System Lake Worth Police Officers' D1 Pension Fund Lakeland Police Officers' Retirement System Lauderhill Firefighters Retirement System Leesburg Municipal Firemen's Retirement Trust Miami Dade College Foundation Miami Springs General Employees' Retirement System Miami Springs Police and Firefighters' Retirement System Milton General Employees' Retirement System Milton Police Officers' Pension Fund Miramar Fire Local 2820 VEBA Trust Fund Miramar Management Retirement Plan Miramar Police Officers' Retirement Fund Miramar Retirement Plan for General Employees New Smyrna Beach Police Officers' Retirement Plan North Brevard County Hospital District Operating Fund North Brevard County Hospital District Pension Plan North Miami Retirement System - Ordinance Number 748 North Port Firefighters' Pension - Local Option Trust Fund The above list includes public pension fund investors from Florida who have executed an agreement to invest in products sponsored by American Realty Advisors and whose name is not restricted from being included in this list, It is not known whether the listed investors approve or disapprove of ARA or the advisory services provided, The above list includes investors as of December 31, 2018, About ARA American Realty Advisors 1 39 Florida Investor List ■ North Port Police Officers' Pension - Local Option Trust Fund ■ North River Fire District Firefighters' Retirement Trust Fund ■ Ocala Firefighters' Retirement System ■ Ocala Police Officers' Retirement System ■ Ocoee Municipal General Employees' Retirement Trust Fund ■ Ocoee Police Officers' and Firefighters Retirement Trust Fund ■ Okaloosa Island Fire District Firefighters' Retirement Trust Fund ■ Oviedo Firefighters' Pension Trust Fund ■ Palm Beach Gardens Firefighters' Pension Fund ■ Palm Beach Gardens Police Officers' Pension Fund ■ Pembroke Pines Fire and Police Pension Fund ■ Panama City Municipal Firefighters' and Police Officers' Pension Trust Funds ■ Plant City Safety Employees Retirement Plan ■ Pompano Beach General Employees' Retirement System ■ Port Orange Fire and Rescue Pension Fund ■ Port St. Lucie Municipal Police Officers' Retirement Trust Fund ■ Riviera Beach Municipal Firefighters' Pension Trust Fund ■ Riviera Beach Police Pension Fund ■ Sanibel General Employees Pension Fund ■ St. Cloud General Employees' Retirement System ■ St. Cloud Police Officers' and Firefighters Retirement System ■ St. Lucie County Fire District Firefighters' Pension Trust Fund ■ St. Lucie County Fire District General Employees Retirement System ■ St. Pete Beach Firefighters' Retirement System ■ Tamarac Police Officers' Pension Trust Fund ■ Temple Terrace Police Officers Retirement Trust Fund ■ Titusville General Employees Pension Fund ■ Town of Bay Harbor Islands' Pension Fund ■ Town of Golden Beach Employees' Pension Plan ■ Town of Indialantic Police Officers' and Firefighters' Retirement System ■ Town of Longboat Key Consolidated Retirement System ■ Venice Municipal Firefighters' Pension Trust Fund ■ Vero Beach Police Officers' Pension Plan ■ Village of North Palm Beach Fire and Police Retirement Fund ■ West Manatee Fire and Rescue District Firefighters' Retirement Plan ■ West Palm Beach General Employees' Restated Defined Benefit Retirement System ■ Winter Haven Firefighters' Retirement System ■ Winter Haven General Employees' Retirement System ■ Winter Haven Police Officers' Retirement System ■ Winter Springs General Employee Retirement System The above list includes public pension fund investors from Florida who have executed an agreement to invest in products sponsored by American Realty Advisors and whose name is not restricted from being included in this list, It is not known whether the listed investors approve or disapprove of ARA or the advisory services provided, The above list includes investors as of December 31, 2018, Appendix American Realty Advisors 1 40 Core Commingled Real Estate Investments Composite COMPLIANCE STATEMENT: American Realty Advisors ("ARA") claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with GIPS. ARA has been independently verified for the periods January 1, 2001 through December 31, 2017. The verification report is available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm -wide basis and (2) the firm's policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation. THE FRM: ARA is an investment advisor registered with the U.S. Securities and Exchange Commission under the Investment Advisers Act of 1940, as amended. THE COMPOSITE: The Core Commingled Real Estate Investments Composite, created on November 21, 2003, consists of all fully discretionary open-end commingled portfolios managed by the firm using a core strategy. ARA defines a Core portfolio as one consisting primarily of direct or indirect investments in institutional quality, stabilized, income- producing office, industrial, retail and Multi -Family properties and other similar investments nationwide. ARA defines a discretionary portfolio as any portfolio over which ARA has full discretion regarding investment decisions. The firm defines a non -discretionary portfolio as any portfolio over which ARA does not have full discretion regarding investment decisions. The firm maintains a complete list and description of composites, which is available upon request. BENCHMARK: For the period beginning January 1, 2007 through December 31, 2015 the composite was benchmarked against the NCREIF Fund Index - Open -End Diversified Core Equity (NFI-ODCE) Equal Weight Index. NFI-ODCE Equal Weight Index returns were equal -weighted and shown leveraged before the deduction of any fees. As of January 1, 2016, the composite's benchmark for performance is the NFI-ODCE Value Weight Index. NFI-ODCE Value Weight Index returns will be value -weighted and shown leveraged before the deduction of any fees. The change conforms the Composite's benchmark to a majority ofthe other core commingled funds included in the Index. LEVERAGE: The sole portfolio in this composite includes portfolio -level debt and assets that are leveraged using either fixed or variable debt. Total leverage on the portfolio in this composite does not exceed 40% of the gross fair value of such portfolio. Some debt may be hedged using derivative securities, may require interest -only payments, or may mature before it is fully amortized. A CALCULATVON OF PERFORMANCE (RETURNS: Performance is stated in U.S. Dollars, is presented both gross and net of management fees, and includes the reinvestment of some income and the effect of cash and cash equivalents. Net of fee returns are reduced by actual asset management fees, and other expenses incurred in the operation of the real estate and the sole portfolio included in the composite. Performance returns are computed using investment level return formulas, which calculate time -weighted returns for real estate investments by geometrically linking component returns and have been adjusted for external cash flows. The sum of income and appreciation may not equal the total return for annualized periods due to the chain -linking of quarterly returns. Past performance is not a guarantee of future results. VALUATIONS: The sole portfolio included in the composite consists primarily of real estate, investments in joint ventures invested in real estate, debt investments secured by real estate, and some cash. Real estate values are based upon independent appraisals performed quarterly by a third -party valuation manager/appraiser in three quarters in any given year and by a third -party appraiser in the remaining quarter of such year. The third -party valuation manager/appraiser and the third -party appraiser are not affiliated with ARA or each other. Consistent with methodologies used by typical institutional investors, various approaches are considered during the determination of fair value, including the Income Approach, Sales Comparison Approach, and/or Cost Approach or methods applicable to the asset class and geographic region. Valuations of real estate involve subjective judgments and unobservable inputs, as the actual fair value price of real estate can be determined only by negotiations between independent parties in sales transactions. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request. FEES: Asset management fees are paid to ARA quarterly in arrears, are calculated separately for each investor in the fund at an annual rate determined based on capital commitments by each investor admitted to the fund prior to January 1, 2015 and commitment amount less amounts redeemed to date for investors admitted after January 1, 2015 (ranging from 1.10% down to .80%). COMPOSITE RETURN DATA NCREIF NFI-ODCE COMPOSITE STATISTICS AT YEAR-END Equal Weight (2003-2015) Gross -of -Fees Net -of -Fees Value Weight (2016 -Forward) Composite Total Firm % Total Total # of Assets Net Asset* Externally Year Return Income Appreciation Total Return income Appreciation Return Accounts ** ($ Millions) ($ Millions) Valued 2017 8.07% 4.01% 3.94% 7.01% 4.35% 3.15% 7.62% 1 4,754 6,177 94% 2016 7.09% 3.96% 3.04% 7 6.04% 1 4.50% 4.12% '11 8.77% 4,488 6,067 93% 2015 15.35% 4.76% 10.23% 14.22% 4.83% 9.97% 15.17% 1 3,935 5,588 95% 2014 11.61% 5.23% 6.13% 10.51% 5.07% 7.03% 12.38% ' 3,458 5,083 95% 2013 12.36% 5.24% 6.85% 11.25% 5.28% 7.74% 13.34% 1 2,935 4,385 98% 2012 11.26% 5.14% 5.89% 10.18% 5.40% 5.38% 11.03% I 2,576 3,853 97% 2011 15.04% 5.29% 9.39% 13.91% 5.52% 9.99% 15.96% 1 2,168 3,496 100% 2010 11.21% 5.79% 5.19% 10.18% 6.55% 9.11% 16.14% ' 1,339 2,718 95% 2009 29.99% 5.50% -34.02®/® 30.68°/® 5.98®/® 34.90°/® 30.65°/® 1 1,131 2,560 100% 2008 5.30®/® 4.38% 9.37% 6.19% 4.71®/® 14.54°/® 10.37°/® 1,694 3,451 92% Assets under management represent the net value of all assets and accounts Annualized Returns managed by American Realty Advisors ("ARA") (excluding partners' share of equity and debt on partnership investments and non -real estate debt assets 3 year 10.11% 4.24% 5.69% 9.03% 4.56% 5.71% 10.47% through 12/31/10). Prior to March 31, 2005, ARA reported total firm assets as the 5 year 10.86% 4.64% 6.01% 9.76% 4.80% 6.37% 11.42% amount of assets under management plus undrawn capital commitments and 10 year 4.68% 4.93% -0.25% 3.66% 5.22% -0.43% 4.78% noted the amount of such undrawn commitments in a footnote. Effective March 31, 2005, ARA restated year-end total firm assets from 2001-2007 to omit such Since undrawn commitments. Inception 7.39% 4.97% 2.34% 6.36% 5.47% 2.36% 7.94% " The portfolio in the composite represents an open-end commingled fund. 11/21/2003 COMPLIANCE STATEMENT: American Realty Advisors ("ARA") claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with GIPS. ARA has been independently verified for the periods January 1, 2001 through December 31, 2017. The verification report is available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm -wide basis and (2) the firm's policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation. THE FRM: ARA is an investment advisor registered with the U.S. Securities and Exchange Commission under the Investment Advisers Act of 1940, as amended. THE COMPOSITE: The Core Commingled Real Estate Investments Composite, created on November 21, 2003, consists of all fully discretionary open-end commingled portfolios managed by the firm using a core strategy. ARA defines a Core portfolio as one consisting primarily of direct or indirect investments in institutional quality, stabilized, income- producing office, industrial, retail and Multi -Family properties and other similar investments nationwide. ARA defines a discretionary portfolio as any portfolio over which ARA has full discretion regarding investment decisions. The firm defines a non -discretionary portfolio as any portfolio over which ARA does not have full discretion regarding investment decisions. The firm maintains a complete list and description of composites, which is available upon request. BENCHMARK: For the period beginning January 1, 2007 through December 31, 2015 the composite was benchmarked against the NCREIF Fund Index - Open -End Diversified Core Equity (NFI-ODCE) Equal Weight Index. NFI-ODCE Equal Weight Index returns were equal -weighted and shown leveraged before the deduction of any fees. As of January 1, 2016, the composite's benchmark for performance is the NFI-ODCE Value Weight Index. NFI-ODCE Value Weight Index returns will be value -weighted and shown leveraged before the deduction of any fees. The change conforms the Composite's benchmark to a majority ofthe other core commingled funds included in the Index. LEVERAGE: The sole portfolio in this composite includes portfolio -level debt and assets that are leveraged using either fixed or variable debt. Total leverage on the portfolio in this composite does not exceed 40% of the gross fair value of such portfolio. Some debt may be hedged using derivative securities, may require interest -only payments, or may mature before it is fully amortized. A CALCULATVON OF PERFORMANCE (RETURNS: Performance is stated in U.S. Dollars, is presented both gross and net of management fees, and includes the reinvestment of some income and the effect of cash and cash equivalents. Net of fee returns are reduced by actual asset management fees, and other expenses incurred in the operation of the real estate and the sole portfolio included in the composite. Performance returns are computed using investment level return formulas, which calculate time -weighted returns for real estate investments by geometrically linking component returns and have been adjusted for external cash flows. The sum of income and appreciation may not equal the total return for annualized periods due to the chain -linking of quarterly returns. Past performance is not a guarantee of future results. VALUATIONS: The sole portfolio included in the composite consists primarily of real estate, investments in joint ventures invested in real estate, debt investments secured by real estate, and some cash. Real estate values are based upon independent appraisals performed quarterly by a third -party valuation manager/appraiser in three quarters in any given year and by a third -party appraiser in the remaining quarter of such year. The third -party valuation manager/appraiser and the third -party appraiser are not affiliated with ARA or each other. Consistent with methodologies used by typical institutional investors, various approaches are considered during the determination of fair value, including the Income Approach, Sales Comparison Approach, and/or Cost Approach or methods applicable to the asset class and geographic region. Valuations of real estate involve subjective judgments and unobservable inputs, as the actual fair value price of real estate can be determined only by negotiations between independent parties in sales transactions. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request. FEES: Asset management fees are paid to ARA quarterly in arrears, are calculated separately for each investor in the fund at an annual rate determined based on capital commitments by each investor admitted to the fund prior to January 1, 2015 and commitment amount less amounts redeemed to date for investors admitted after January 1, 2015 (ranging from 1.10% down to .80%). For More Information, Please Contact: Scott Beltz I Los Angeles, CA 213.233.5845 sbeltz@aracapital.com Jay Butterfield Executive Managing Director, Head of Business Development 213.233.5743 butterfield@aracapital.com Todd Fowler I Chicago, IL 312.905.2002 tfowler@aracapital.com Troy Jenkins I Los Angeles, CA James Mitchell I Chicago, IL 213.233.5781 312.216.4715 tjenkins@aracapital.com jmitchell@aracapital.com A AMERICAN REALTY ADVISORS INSTITUTIONAL CAPITAL MANAGEMENT Headquarters Office Los Angeles, California 515 S. Flower St. 49th Floor Los Angeles, CA 90071 T 213.233.5700 F 213.233.5705 Richelle Hayes I Orlando, FL 407.342.1432 rhayes@aracapital.com Jeff Miller I East Haddam, CT 857.472.9080 jmiller@aracapital.com LOS ANGELES I BOSTON I CHICAGO I ORLANDO I PHILADELPHIA I SAN FRANCISCO Printed in-house