A Private Placement Opportunity - Timberland Partners ......8500 Normandale Lake Blvd Suite 700...

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Timberland Partners Apartment Fund VII, LLC

A Private Placement Opportunity

8500 Normandale Lake BlvdSuite 700

Minneapolis, Minnesota 55437

952.893.1216

Robert Fransen President

Office [email protected]

Greg Ribich Vice President of Investor Relations

Office 952.843.2035Mobile 952.240.6846

[email protected]

Jessie Clausen Investor Relations Specialist


Sam Eaton Director of Investor Relations

Office 952.208.1999Mobile 763.772.5523

[email protected]

If you have questions regarding this document or Timberland Partners Apartment Fund VII, please don’t hesitate to contact us.

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Contents

A Message from Robert Fransen 4

The Opportunity 5

Timberland Partners Investments Overview 6Map of Investment Locations 7Timberland Differentiators 8Average Annual Fund Performance 9

Current Market Conditions 10

TPAF VII: A Snapshot 13Key Statistics 14Fund Overview 15Diversification and Competitive Edge 16

TPAF VII Acquisition Properties Watermark on Walnut Creek Apartments 17 Meadowridge Apartments 18 Trails at Cahaba River Apartments 19 Encore Memorial 20

TPAF VII Structure 21

Case Studies Brookes Edge 23 Towne Park 24 Wyngate Townhomes 25

TPAF VII Investment Committee 26

Contact and Disclosures 27

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WELCOME TO TIMBERLAND PARTNERS APARTMENT FUND VII

A Message from Robert Fransen

Timberland Partners is pleased to offer our valued and potential partners the opportunity to participate in our new fund, Timberland Partners Apartment Fund VII.

As with our previous funds, we will acquire and create value in select apartment communities in the Midwest and growing Southeast markets of the U.S. Our team has identified apartment communities in Rogers, Arkansas; St. Louis, Missouri; Birmingham, Alabama; and Tulsa, Oklahoma for our initial acquisitions.

We thank you for your support over our 28-year history and hope you’ll consider joining us in TPAF VII. I believe in the apartment market, the Timberland Partners acquisitions and management team that will select and manage these communities, and I will personally invest $5,000,000 in the fund.

Regards,

Robert L. Fransen President, Timberland Partners

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The OpportunityTimberland Partners Apartment Fund VII:

Timberland Partners Apartment Fund VII, LLC is offering up to 4,000

($100,000,000) preferred membership units (the “Preferred Units”) of

Timberland Partners Apartment Fund VII, LLC, a Delaware limited liability

company (the “Company” or “LLC”) at the purchase price of $25,000 per

Preferred Unit. In accordance with SEC guidelines, this offering is being made

to “accredited investors.” Proceeds from the sale of the membership units will

be used to acquire a portfolio of multifamily apartment properties.

If you are interested in making an investment, you will be required to

complete a Subscription Agreement and verify your accredited status.

A minimum investment of two preferred units, or $50,000, is required

unless waived by us in our sole discretion. There is no maximum investment.

The offering is open from the date of the private placement

memorandum until we reach $100 million.

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PLAN – EXECUTE – SUCCCEED

Timberland Partners Means SuccessTimberland Partners’ first acquisition was a modest 46-unit community in Mounds View, Minnesota, which was purchased out of foreclosure. We are now a highly respected, national organization dedicated to enriching the lives of our partners, team members and residents. With more than 75 properties in our portfolio, our team seeks real estate investment opportunities found in changing market conditions, expanding employment markets, well-timed renovations or organizational changes.

At Timberland Partners, we attribute the growth of our portfolio to our team’s steadfast commitment to maintaining the highest ethical standards and developing meaningful relationships with our investors. And unlike other firms, we take a hands-on approach to managing every property within our portfolio – and only our properties.

The bottom line? We recognize that investing is more than a financial transaction; it’s an act of trust. Whether you are protecting your retirement or simply diversifying your portfolio, you can expect clear communication and proven results. We promise to handle all the affairs of our partnership to the highest ethical standards.

“ What’s different about Timberland is their integrity, honesty and transparency. They’re just good people and it’s so easy to work with them.” –Current Investor

Our ultimate goal will always be to maximize both the value of the properties and the return on your investment.

Huntington at Sundance Mulberry, FL

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Since 1992, our primary goal has been to build enduring, meaningful relationships with our partners.

TIMBERLAND HOME OFFICE Minneapolis, MN

TIMBERLAND REGIONAL OFFICESOrlando, Florida Des Moines, Iowa Kansas City, KansasWichita, KansasDetroit, MichiganSt. Louis, MissouriChattanooga, TennesseeMemphis, TennesseeNashville, Tennessee

ALABAMATrails at Cahaba River, Birmingham*

ARKANSASSullivan Square, BentonvilleWatermark on Walnut Creek, Rogers*

FLORIDA30 West, BradentonCarrington at Four Corners, ClermontForestlake Apartments, Daytona BeachHuntington at Sundance, MulberryLatigo 27, Ocala

ILLINOISGreen Mount Lakes, O’FallonParkway Lakeside, O’Fallon

IOWAAshley Square, Des MoinesBriarwood, Cedar RapidsGateway Gardens, Cedar RapidsGrand Reserve, Cedar RapidsGrand Ridge, Cedar RapidsPrairie Lakes, AnkenyTimberland at Crestbruck, AnkenyTimberland at Meredith, UrbandaleTimberland Springs, Urbandale

KANSASArcadia at Overland Park, Overland ParkClaremont, WichitaEagle Creek, WichitaThe Overlook, TopekaThe Park at Olathe Station, OlatheThe Reserve at Moonlight, GardnerThe Retreat of Shawnee, ShawneeWoodland Park at Soldier Creek, Topeka

MICHIGANGreen Meadows, BellevilleLakeside Park, Shelby TownshipNorthview Park, Sterling HeightsSouth Pointe, SouthgateTurtle Cove, WestlandWestbury, Howell

MINNESOTA333 on the Park, St. PaulEagle Pointe, West St. PaulEastwood Ridge, RochesterElevate at Southwest Station, Eden PrairieFrance 98, BloomingtonGarden Square, St. CloudGreen on 4th, MinneapolisJordan Creek and Mills, RochesterParkers Lake, PlymouthPARKone, St. Louis ParkQuarry Commons, St. CloudRoyal Oaks, EaganSummit Square, RochesterThe Observatory, BurnsvilleTimberland Heights, RochesterWhite Bear Woods, White Bear LakeWyndemere, St. Cloud

MISSISSIPPIOak Hollow, SouthavenSavannah Creek, SouthavenThe DeSoto, Horn Lake

MISSOURIMeadowridge Apartments, St. Peters*Pelican Cove, FlorissantThe Finn, HazelwoodVance Station, Valley ParkWillowbend, Town & Country

NEBRASKAPark West, OmahaRuskin Place, Lincoln

NORTH DAKOTASundance, Bismarck

OHIOQuail Hollow at the Lakes, HollandTowne Park, Troy

OKLAHOMAEncore Memorial, Bixby*Renaissance at Norman, NormanRiverchase, TulsaThe Lakes, Tulsa

TENNESSEEAshton Creek Farms, SmyrnaBrookes Edge, ClevelandFall at 109, LebanonFountains at Meadow Wood, ClarksvilleLakes of Columbia, ColumbiaLegacy Village, SpringfieldRidgemont at Stringer’s Ridge, ChattanoogaRivergate Meadows, GoodlettsvilleVillas at Oak Crest, Chattanooga

*Pending as part of TPAF VII

Timberland Home Office

Timberland Regional Office

Timberland Apartment Communities

TPAF VII Acquisition Property

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A straightforward business plan: find properties, find partners and manage them well through our in-house, best-in-class operations team from multiple regional offices

Our team targets Class-B and select Class-A apartment communities in secondary and tertiary markets that show signs of positive demographic trends, allowing our properties to generate income and grow in value over time

Our investor relations team creates boutique investment firm experience, distributing clear and concise quarterly updates

We seize opportunities not afforded to other sponsors through an earned reputation for closing deals under contract, seeking to invest within a 9-12-month period

Our commitment to creating wealth through long-term ownership rather than attempting to time the short-term market

With 230 years of combined multifamily real estate experience, sponsors have co-invested more than $23 million, or 15.4%, in our first six funds

“ They do a great job of uncovering hidden value. They determine the investments they need to make in each property to make it attractive to whatever tenant base they’re trying to recruit.”–Current Investor

What Makes Timberland Partners Unique?

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2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019*

TPAF I 3.75% 19.42% 9.00% 34.35% 8.44% 49.95% 7.45% 11.20% 11.37% 66.50% 52.46%

TPAF II 2.63% 5.19% 8.25% 8.25% 7.38% 10.52% 24.01% 7.57% 5.68%

TPAF III 5.98% 9.25% 11.25% 13.00% 59.08% 10.48% 7.27%

TPAF IV 5.89% 10.00% 10.85% 24.31% 9.29% 25.49%

TPAF V 6.28% 7.38% 9.43% 5.75%

TPAF VI 1.76% 10.44%

Average Annual Fund Performance To-Date

*Through 11/30/2019

Entity Capital Raised

Capital Closing

Active Years

TPAF VI $51,450,000 9/13/17 2

TPAF V $38,650,000 6/30/15 4

TPAF IV $25,425,000 11/27/13 6

TPAF III $17,075,000 8/31/12 7

TPAF II $12,600,000 12/22/10 8

TPAF I $8,325,000 2/8/08 11

Entity Annual Cash-on-Cash

Annual Equity Appreciation

Total Annual Return

TPAF VI 6.52% 0.0% 6.52%

TPAF V 7.61% 6.0% 13.61%

TPAF IV 14.70% 9.8% 24.54%

TPAF III 17.01% 11.8% 28.84%

TPAF II 9.06% 11.3% 20.31%

TPAF I 23.27% 8.2% 31.45%

0%

5%

10%

15%

20%

25%

30%

35%

TPAF ITPAF IITPAF IIITPAF IVTPAF VTPAF VI

Annual Cash-on-Cash

Annual Equity Appreciation

Total Annual Return

Cash-on-Cash Return

Total Annual Return

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CURRENT MARKET CONDITIONS

National Trends Continue to Benefit Apartment Investment

Timberland Partners Investments believes that the next few years will continue to be strong for the apartment market, which has seen high occupancy rates since 2011. Demand for apartments remains strong as job growth and the formation of new households increase.

A national trend that continues to benefit apartment investment is that the nationwide home ownership ratio has declined from a record high of 69.2% in 2004 to 64.8% at the end of the third quarter in 20195. The homeownership rate for our targeted renters, those people under 35, has declined by 7.2 percentage points from a peak of 43.6% in mid-2004 to 36.4% in mid-2019.

Attitudes regarding home ownership has shifted with regard to millennials. A new Freddie Mac Survey found 24% of renters “extremely” unlikely to ever own a house. Some 82% said renting is cheaper than buying, 15 percentage points higher than in February 2018, even though rent nationally continues to rise (20% faster than inflation between 1980 and 2016).

“ Despite lower mortgage rates, a 15% rise in the median single-family home price has caused single-family affordability to decline 9% since 2016.” 6

1,5U.S. Census Bureau, October 2019; 2,3Bloomberg, November 2019; 4Federal Reserve Economic Data, fred.stlouisfed.org; 6Walker Dunlop Multifamily Outlook, Quarterly Report. Fall 2019

Strong Apartment Market

Home ownership has declined by 7.2% for

individuals under 35 since 2004 1

24% of renters “extremely”

unlikely to ever own a house 2

82% of Millennials believe renting

is cheaper than buying 3

Lowest national vacancy rate in

34 years4

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According to the CBRE Multifamily Market Outlook 2019, home ownership rates are likely to inch up, largely due to the size of the millennial cohort and its age demographics. Yet even with more moderate movement into home ownership, most millennials may remain in rental housing in the near term. “Rising home prices (albeit at a lower level than recent years), higher mortgage rates, and limited availability of moderately priced homes will sideline many potential buyers,” CBRE reports.

Rent growth remains stable. In a recent survey conducted by industry analyst RealPage Inc., same-store rents for professionally managed apartments nationally rose 3% in the third quarter of 2019. In the Midwest, the growth was 2.9%, up from 2.2% the previous year. Timberland Partners Investments’ results reflect these trends reporting 3.05% same-store growth in the third quarter of 2019, over the same period the previous year

The RealPage survey also reflects a national vacancy rate of 3.7% in the third quarter in 2019, down from 4.1% in the previous quarter and 4.2% in the third quarter of 2018. This marks the lowest vacancy recorded by RealPage in over 19 years. It’s worth noting that this decline in vacancy spanned all regions - down 20 bps in the West and 40bps in the Northeast, Midwest and South.

1Data from RealPage through National Multifamily Housing Council, Market Trends Newsletter, November 7, 2019

U.S Rental Apartment Vacancy Rate (5+ Units) 1 Continues to Decline

Investment-Grade Property Vacancy Rate

2008 2010 2012 2014 2016 20180%

2%

4%

6%

8%

10%

12%

14%

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In addition, management believes there is still pent-up demand for apartments as the population’s attitude towards home ownership continues to shift to renting by choice. While this bodes well for the multifamily sector as a whole, management remains particularly bullish on the targeted Class-B apartment market. In addition to the factors mentioned above, supply to meet this demand is generally delivered to the upper end of the rental market. This is principally a result of two factors that combine to drive up the costs of new development:

Together these increased costs mean that developers have to achieve greater rents to realize the same return on cost. As a result, most of the new development is Class-A, luxury product – the mid-to-high rise developments under construction throughout the country. The Class-B market – our target – has not seen an equivalent increase in supply.

Meanwhile, home prices, particularly at the entry-level are maintaining their march upwards – due in large part to the same cost factors described above. The Case-Shiller National Home Price Index closed Q3 2019 at the highest level on record, at 212.2. Many of these would-be home buyers cannot afford the luxury rental market either and will therefore increase the renter pool in the Class-B market.

Historically low unemployment, particularly in the trades, puts upward pressure on wages – the highest cost category in any new development.

Lingering tariffs and trade-war talks have driven materials costs up faster than inflation.

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The net effect of increased demand and limited new supply should yield favorable rental rate increases and corresponding value increases in the years to come.

Elevate at Southwest Station Eden Prairie, MN

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*There can be no assurance that these target returns will be achieved, and actual realized returns may vary significantly. Nothing contained herein is, or should be, relied upon as, any promise, guarantee or representation by Timberland Partners Investments as to the future performance of Fund VII or the profitability of an investment therein. An investment in Fund VII will involve a significant amount of risk, including risk of loss of all contributed capital.

TPAF VII: A Snapshot

• $100 million in equity capital through the issuance of 4,000 Preferred Units

• Direct investments in multifamily real estate assets in stable and emerging growth markets

• Sponsors of the fund will co-invest 10% of the committed equity capital for TPAF VII

Key Facts

• Invest capital into approximately 8-12 multifamily apartment properties priced in the range of $10 million to $50 million

• Provide increasing quarterly cash distributions in the 7% to 10% range during the hold period and target an internal rate of return in the low to mid-teens over the life of the fund

• Diversify the portfolio with a blend of cash flow and value add properties

• Diversify the portfolio geographically

Objective

• Focus on secondary and tertiary markets that are often overlooked by institutional investors

• Target properties where we can enhance value through renovation and strong management

• Seek to pursue off-market deals through an extensive network of local brokers and owners seeking to avoid highly competitive offerings

Strategy

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Fund Capital Raised Sponsor Commitment Properties

Total Distributions

Since Inception

Gain in Value of Preferred Unit

TPAF I $8,325,000 $1,850,000 8 $22,475,929 93.2%

TPAF II $12,600,000 $1,650,000 5 $9,860,425 90%

TPAF III $17,075,000 $2,675,000 5 $20,322,180 82.8%

TPAF IV $25,425,000 $3,525,000 7 $21,787,172 49.2%

TPAF V $38,650,000 $6,000,000 10 $10,955,348 24%

TPAF VI $51,450,000 $7,575,000 8 $6,940,719Valued at cost.

Internal valuation 2/2019

Timberland Partners Apartment Funds Key Statistics

Brookes Edge Cleveland, TN

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MOVING FORWARD

TPAF VII Fund OverviewIn 2007, Timberland Partners’ primary investment model evolved from a single asset approach to a multi-asset fund strategy.

Our first six funds have each acquired several high-quality apartment properties and returns on investment for each fund have met, or are exceeding, expectations.

To continue to capitalize on growing apartment market conditions and our strong reputation with sellers and the real estate brokerage community, we are now forming our seventh apartment fund, Timberland Partners Apartment Fund VII, LLC (TPAF VII).

TPAF VII will focus on acquiring properties that produce strong cash flow, as well as those whose value can be enhanced through renovation and strong management. This approach has been successful in our previous funds providing investors with a combination of annual cash flow and long-term capital appreciation. While the focus will remain on Midwest properties, consideration will be given to acquiring in the Southeast and other markets as well.

As with our previous funds, our strategy includes acquiring properties in secondary or tertiary markets, which have attracted less attention from national or institutional investors, often resulting in less competition for available apartment properties and higher returns on our investments.

TPAF VII plans to raise up to $100,000,000 through the sale of limited liability company preferred membership interest (the “Units”) to qualified accredited investors. Units are priced at $25,000 each, with a minimum investment of two units ($50,000). Structured with a preferred return of 7%, TPAF VII’s goal is to provide increasing quarterly cash distributions in the 7%-10% range during the life of the fund and target an internal rate of return in the mid-teens upon liquidation. Timberland Partners’ principals of the fund will invest a combined $10,000,000 of personal capital in TPAF VII.

Our seventh fund follows on the successes of our previous six funds, with a continued strategy of acquiring property with hidden value at a time when apartment demand continues to rise.

“ Buying or building in the suburbs will remain the best bet based on market performance and investment returns. Suburban multifamily will outperform urban, maintaining lower vacancy and achieving higher rent growth.” –CBRE 2020 Multifamily Real Estate Market Outlook

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Fund Implementation

Timberland Partners SeniorManagement Review

Acquisition Team Project Review

Highly Selective Investment Process

Diversification and Competitive Edge

Our seasoned Acquisitions Team, led by Chief Investment Officer Matt Fransen, reviews over 300 potential apartment opportunities each year, sourced through a national network of brokers and owners established over our 28-year history. Each deal is examined through a disciplined underwriting process, of which roughly 20% are presented to senior management.

300+Opportunities reviewed per year by our

Acquisitions Team

~60Qualified

opportunities reviewed by Timberland Partners Senior Management

8-12Investments selected

for Fund

Senior management and the Fund Investment Committee review the qualified opportunities shared from the Acquisitions Team. Properties undergo a rigorous process including input from our in-house operations and asset management teams before purchase, eliminating any that do not meet the Timberland Partners standards. Only deals in which value can be created through renovation and/or improved property management are placed in the Fund.

Upon acquisition, our Asset Management, Capital Improvement and Property Management teams transition the properties into the Timberland Partners portfolio using a proven process. Value-add improvements are completed, and best-in-class management is employed, following a business plan customized for each community. This process allows us to produce increasing returns to our investment partners throughout the life of the investment.

Fund VII StrategyThe Fund will keep a steady balance of risk and reward by employing a

durable and time-tested approach to opportunistic real estate investing.

TPAFVII

DIVERSIFICATION

TPAF VII is designed to reduce the fluctuation in investment returns through diversification. TPAF VII intends to acquire four properties shortly after its formation. Cash flow and value produced by fund-acquired properties will be pooled together, thereby providing investors with an enhanced level of diversification.

GROWTH MARKET

The next few years will continue to be strong for the apartment market, which has seen high occupancy rates within the target markets. Demand for apartments remains strong as job growth and the formation of new households increase, and interest in home ownership declines.

ACQUISITION COMPETITIVE EDGE

TPAF VII will also possess a competitive advantage with its pool of readily available investment capital, which may allow it to act more quickly on favorable

acquisition opportunities. As buyers have become more scrutinized by sellers and brokers, TPAF VII’s

readily available capital will distinguish it from less financially sound buyers.

HIGHLY EXPERIENCED TEAM

The sponsor brings together 230 years of combined experience and a broad range of

talents in all aspects of real estate investment. Over the years we collectively have been involved in

transactions exceeding $10 billion.

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FUND VII ACQUISITION PROPERTY

Watermark on Walnut Creek ApartmentsVII

Location: Rogers, AR

Acquisition Price: $36,950,000

Year Built: 2017

Price Per Unit: $167,955

Units: 220

Price Per Foot: $137.61

Average Sq Ft Unit Size: 1,221

Occupancy (as of 11/07/2019): 94.6%

Year One Capitalization Rate: 5.25%*

Year One Cash on Cash Return: 8.0%*

Watermark on Walnut Creek is a compelling acquisition

because of its unique “big-house” style units with attached

garages, and because of the dynamic market of northwest

Arkansas. Additionally, it presents an opportunity to acquire

a Class-A property that produces strong cash flows from day

one, which can be improved over time through Timberland

Partners’ management expertise. Finally, Walmart’s

commitment to build a new $1 billion dollar corporate

headquarters in Bentonville shows strength in the

economic future of northwest Arkansas.

*Expected Returns represent management’s estimate of future performance.

See disclaimer and additional details in Exhibit E of the Offering’s Private Placement Memorandum.

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Meadowridge ApartmentsVII

Meadowridge Apartments was sourced off-market and will

be purchased directly from the developer. Though fully

leased, Timberland Partners believes there is a rent gap of

approximately $200/unit between the in-place rents and

market level. Consequently, the property can be purchased

both below replacement cost and at a significant discount to

its potential value.

Location: St. Peters, MO


Year Built: 2018/19


Units: 180


Average Sq Ft Unit Size: 1,133

Occupancy (as of 11/15/2019): 99.4%





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Trails at Cahaba River ApartmentsVII

Trails at Cahaba River presents a more traditional value-

add opportunity. Despite a substantial renovation from

the previous owner more than 50 units remain in the

“classic” vintage – presenting an opportunity to conduct a

comprehensive remodel and raise rents to market level.

Further strategic capital improvements and improved best-

in-class management will allow this asset to capitalize on its

“Class-A” location and grow in value over time.

Location: Birmingham, AL


Year Built: 1987/88


Units: 400


Average Sq Ft Unit Size: 980

Occupancy (as of 11/15/2019): 93.5%


Year One Cash on Cash Return: 7%*



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Encore MemorialVII

Encore Memorial is expected to be a strong cash flow

producer for TPAF VII. Part of the value proposition is

the opportunity to assume and immediately refinance

the existing HUD loan on the property. HUD loans are

attractive because of the ability to lock in a favorable

interest rate with a 35-year term – significantly reducing

long-term interest rate risk. Additionally, we believe the

purchase to be significantly below replacement cost of

an equivalent product.

Location: Bixby, OK


Year Built: 2012


Units: 248


Average Sq Ft Unit Size: 929

Occupancy (as of 11/15/2019): 96%



Year One Total Yield: 11.47%*



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DistributionsTimberland Partners Apartment Fund VII’s goal is to provide increasing quarterly cash distributions in the range of 7%-10% during the hold period and target an internal rate of return in the low to mid-teens over the life of the investment. The distribution formula is identical to our previous apartment funds with the Sponsors (Chief Manager or Common Members) only receiving distributions in excess of a 7% cumulative return to its Investment Partners (Preferred Members). The distribution waterfall is further described below:

(a) First, 100% to the Preferred Members, pro rata in accordance with, as to each Preferred Member, the amount of such Preferred Member’s accrued but unpaid Preferred Return (“Preferred Return” means a cumulative return of 7% per annum, on then Unreturned Capital Contributions), until all accrued Preferred Return has been distributed;

(b) Second, if the Chief Manager, in its sole discretion, determines that the distribution includes a return of Capital Contributions of the Preferred Members, to the Preferred Members, pro rata in accordance with their Unreturned Capital Contributions, the amount of the distribution that is a return of Capital Contributions of the Preferred Members.

(c) Third, 50% to the Preferred Members, as a class, pro rata in accordance with the Preferred Members’ respective interests, and 50% to the Common Members, as a class, pro rata in accordance with the Common Members’ respective interests, until such time as the Common Members, as a class, have received cumulative distributions pursuant to this Section (c) equal to 20% of the sum of the cumulative distributions that the Preferred Members, as a class, have received pursuant to Sections (a) and (c) for the current fiscal year and all prior fiscal years and the Common Members, as a class, have received pursuant to this Section (c) for the current fiscal year and all prior fiscal years;

(d) Fourth, in any period (or portion thereof) prior to the date on which the IRR reaches 12%, (i) 80% to the Preferred Members, as a class, pro rata in accordance with their respective Percentage Interests, and (ii) 20% to the Common Members, as a class, pro rata in accordance with their respective Percentage Interests; and

(e) Fifth, in any period (or portion thereof) beginning on or after the date on which the IRR reaches 12%, (i) 70% to the Preferred Members, as a class, pro rata in accordance with their respective Percentage Interests, and (ii) 30% to the Common Members, as a class, pro rata in accordance with their respective Percentage Interests.

Asset and Property Management FeesThe LLC will pay to the Chief Manager and Timberland Partners fees similar to our most recent funds as highlighted below.

Asset Management Fee 1.0% of the unreturned capital balanceAcquisition Fee 1.0% of purchase priceProperty Management Fee 5.0% of total revenuesConstruction Management 5.0% of renovation costsDisposition Fee 2.0% of sales priceRefinance 1.0% of new loan amount

Allocation of Profits and LossesIncome, expenses, gains, and losses of the LLC will be allocated among the Members consistent with the provisions of the LLC Agreement. The LLC will be treated as a partnership for federal income tax purposes and, thus, each Member will be taxed on the Member’s ratable share of LLC income even though the amount of cash distributed to the Member may be less than the resulting tax liability. Prospective Members are advised to contact their respective tax advisors with regard to the potential tax benefits and consequences arising from investing in the LLC.

TPAF VII Structure

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Reports to MembersAs with our previous apartment funds, we will furnish unaudited financial statements to the Members annually, quarterly financial reports with investment summaries, and annual tax information necessary for each Member’s tax returns.

Term and Exit StrategyThe primary goal of this investment is to maximize the long-term return to our partners, so the term of the fund is perpetual. As such, partners should enter this investment expecting minimum ten-year hold. In connection with the winding down of the business, the Chief Manager has broad discretion as to the timing and the method. This discretion includes selling all or some the properties and making cash distributions from such proceeds while retaining others. The Chief Manager may also elect to sell a property and seek a replacement property with which to complete a tax deferred exchange.

All members should expect to hold these Preferred Units as a long-term investment. Liquidation could be through the sale of assets to a third party in which the proceeds would be distributed to investors, or by tax deferred transfer to an Umbrella Partnership Real Estate Investment Trust operated by Timberland Partners. The exact timing of such dispositions will be highly dependent upon market conditions and selling opportunities. Under the UPREIT structure, investors would receive shares in the UPREIT along with an optional redemption plan to facilitate liquidity for investors.

Chief Manager CommitmentTimberland Partners Apartment Fund Manager VII, LLC, will act as the Chief Manager for this investment. The Chief Manager and persons affiliated with Timberland Partners, Inc. (“Timberland Partners”) have elected to purchase a minimum of 400 Preferred Units or $10,000,000 in this offering. The principals of the Chief Manager are Robert Fransen, Terry Cook, Jon Yanta, Matt Fransen, Erin Fransen, Greg Ribich, Charlie Snyder, and John (Jerry) Nelson IV. The Principals also act as the Investment Committee for the LLC. Duties, rights and obligations of the Chief Manager are detailed in the LLC agreement.

Green on 4th Minneapolis, MN

TPAF VII Structure

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CASE STUDY

Brookes EdgeCreating value through opportunisticpurchase and measured risk.

In September 2017, Timberland Partners Apartment Fund VI, LLC purchased Brookes Edge for $34,920,000, investing $8,800,000 in capital and financing the balance with a floating rate bank loan. The fund saw this as an opportunistic buy.

The Class-A property was constructed in 2017 and was still in its initial lease up with only 70% of the apartments leased at the time of acquisition. This allowed TPAF VI to purchase the property at a discount to replacement cost, as it assumed the risk of leasing the remaining units. The property is now fully leased.

According to a recent appraisal, the property value has increased to $41,000,000, or byroughly 20%. In November 2019, TPAF VI significantly reduced the floating rate risk by refinancing the property with a new twelve-year fixed rate Fannie Mae loan, allowing the Fund to make a $3,500,000 distribution to its investment partners. Even though TPAF VI is still in its early stages, its investors have enjoyed a cumulative return of 6.5%.

Cleveland, TN (Chattanooga)

324 Units

Property Value Up Nearly 20%

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CASE STUDY

Towne ParkCreating value through propertyimprovements and competitive market pricing.

In January 2014, Timberland Partners Apartment Fund IV, LLC acquired Towne Park for$11,812,500 via an online auction following a foreclosure. The Fund invested $2,950,000 in the acquisition and financed the balance with a fixed interest Freddie Mac loan. TPAF IV strategically made moderate capital improvements to the property and increased the rents to market rate levels.

According to the recent appraisal, the value of the property has increased to $22,600,000, or by 91.3%. This growth allowed TPAF IV to place a second mortgage on the property in June 2019 and provide a $4,550,000 (17.9%) return of capital to its investment partners.

The property has produced an annualized 22.7% return in operating cash flow from inception through November 30, 2019.

Troy, OH (Dayton)

204 Units

Property Value Up Nearly 91%

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CASE STUDY

Wyngate TownhomesCreating value through opportunisticpurchases and strategic improvements.

In March 2011, Timberland Partners Apartment Fund II, LLC purchased Wyngate Townhomes for $5,300,000, investing $1,300,000 in capital and financing the balance with a Fannie Mae mortgage. The fund saw this as an opportunistic buy.

The property was constructed in 2002 and was financed with a $7,627,900 HUD loan, but by 2010 it had fallen into a distressed state. Wyngate was subsequently acquired by an owner purchasing the asset through a deed in lieu of foreclosure and, after stabilizing the property’s occupancy, they decided to flip it.

After the acquisition, Fund II focused on improving the desirability of the property through strategic capital improvements with an eye on increasing the asset’s long-term value. In November 2019, TPAF II sold Wyngate for $10,600,000, doubling its purchase price, and receiving net sales proceeds of $6,340,671 to yield a 26.2% internal rate of return over its eight-and-a-half-year hold.

Burnsville, MN

50 Units

Sold at 2x Purchase Price

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Timberland Partners Apartment Fund VII, LLC Investment Committee

Robert L. Fransen Bob is the Founder and President of Timberland Partners as well as the Managing Partner of each of the Timberland Partners investment partnerships. Prior to forming Timberland Partners in 1992, he was an apartment sales broker for CB Richard Ellis. He is a graduate of the University of North Dakota and holds the Certified Commercial Investment Member (CCIM) designation. Bob has been involved in real estate investment and brokerage since 1978.

Terry L. CookTerry is a Senior Vice President of Timberland Partners. He is also a partner in a number of the Timberland Partners investment partnerships. Terry was the Manager of the second property acquired by Timberland Partners in 1993 and has played a major role in the company’s growth and success since joining the company at that time. Terry attended Brown College and the University of Northern Iowa and holds a Real Property Administrator designation from the University of St. Thomas.

Jonathan R. YantaJon was a Founding Partner of the first Timberland Partners investment partnership and is a General Partner in a number of its investments. Jon is currently the Executive Director Brokerage Services at Cushman & Wakefield (formerly United Properties/Northmarq). Before that he worked at Koll Real Estate (formerly The Shelard Group), where he consistently received numerous top producer awards: City Business 40-under-40, salesperson of the month and the prestigious Eagle award. Jon earned his Bachelor of Science degree with concentrations in both finance and marketing from the University of St. Thomas. He is the recipient of both the Certified Commercial Investment Member (CCIM) and the Society of Industrial Office Realtor (SIOR) designations.

Matthew FransenMatt is a Principal and Chief Investment Officer for Timberland Partners and manages all acquisition, disposition, and financing activity for Timberland Partners, including sourcing, underwriting, market analysis, and due diligence for new property acquisitions. Since joining Timberland Partners in 2007, Matt has been responsible for the addition of over 13,500 apartment units to the apartment portfolio of Timberland Partners and its affiliates. Before joining the Timberland Partners team, Matt worked for Denver-based AIMCO, one of the largest apartment REIT’s in the country. At AIMCO, Matt participated in the acquisition and disposition of over $4 billion in multifamily property sales nationwide (2002-2006). Following his tenure at AIMCO in 2006, Matt and a partner formed Slavin Multifamily Advisors, which focused on multifamily acquisitions in Houston, TX for institutional investment fund clients. Matt graduated from the Leeds School of Business at the University of Colorado-Boulder in 2002 with a bachelor’s degree in Finance.

Erin FransenErin is the Chief Operating Officer and a Principal at Timberland Partners. As COO, she oversees the accounting, human resources, marketing, training, and information technology departments. Erin began her multihousing career at Timberland Partners in 2013 after eight years in various roles at Target Corporation, the last of which was Digital Marketing Manager. Prior to becoming COO, she most recently served Timberland Partners as an Asset Manager and previously held roles in operations, marketing, investor relations, and has also handled Risk Management. Erin served on the Board of Directors for the Minnesota Multi Housing Association and was the liaison to MHA’s Careers Task Force as well as a member of the Emerging Leaders Committee. Erin is a graduate of Boston College with degrees in Finance and Hispanic Studies.

Gregory A. RibichGreg is the Vice President of Investor Relations with Timberland Partners. Greg joined Timberland Partners in 2008, bringing over 20 years of apartment industry experience with him. Before joining Timberland Partners, Greg was the Chief Financial Officer of two prominent Twin Cities apartment development/management companies. At Stuart Management Company (2004-2008), he arranged apartment financing transactions, maintained banking relationships and ran all aspects the financial department. While with Healey Ramme Company (1988-2004), Greg was involved in the structured finance of various apartment development and refinance transactions. He began his career in public accounting as an auditor in 1983 focusing on real estate clients working for Berc and Fox Ltd. (1983-1986) and Delloite & Touche (1986-1988). Greg earned his Bachelor of Arts degree with a major concentration in Accounting from the University of St. Thomas in 1983. He is a Certified Public Accountant and an active member in the Minnesota Society of Certified Public Accountants.

Charles SnyderCharlie is a 34-year veteran of the real estate services and development business and is actively involved in building a portfolio of owned self-storage facilities. Charlie has assisted Timberland Partners in raising investment capital for 15+ years. He most recently performed worldwide tenant representation services for several Fortune 500 companies while employed at Trammell Crow Company and CBRE. Charlie holds a BBA and MBA from Texas A&M as well as an MS from the University of Southern California.

John (Jerry) M. Nelson, IVJerry is a founding member and 25% owner of Stratford Capital Group, a Boston, Massachusetts based multifamily real estate company. Since its founding in 2007, Stratford has successfully underwritten, sponsored and syndicated private equity in 225 multifamily rental apartment properties totaling over 25,614 apartment units in 33 states with a capitalized value of approximately $3.9 billion. Prior to forming Stratford Capital Group, Jerry was Chief Executive Officer of Franklin Capital Group, a real estate investment company specializing in the financing and development of apartment communities nationwide. Jerry is a 50% owner of Franklin Capital Group and currently serves as an Executive Vice President and Director. During his tenure there, Franklin Capital Group placed more than $350 million in equity capital in over 13,500 apartment units. From 1975 to 1987, Jerry was a founding partner and CEO of Winthrop Financial Corporation and ran the apartment acquisition group which purchased over 40,000 units. Jerry is a graduate of Yale University and holds an MBA from Harvard Business School.

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DISCLOSURES: Information and data included in this document is subject to change based on market and other conditions, including changes in the methods or strategies employed. While we believe that information included in this document is accurate and complete, it has not been independently verified as to its accuracy or completeness. The projections in this brochure are based on our current estimates and assumptions, involve significant elements of subjective judgment and analysis, and no representation can be made as to their attainability. Although such assumptions are based on our best estimates, some assumptions inevitably will not materialize, and unanticipated events and circumstances will occur. As such, the actual results achieved during the periods covered by the projections may vary from our estimates and assumptions, and these variations may be material and adverse.

This document does not constitute an offer to sell, or a solicitation of an offer to buy securities. Offers and sales of the securities Timberland Partners Apartment Fund VII, LLC can only be made by means of Timberland Partners Apartment Fund VII, LLC’s Private Placement Memorandum. The information contained in this document is qualified in its entirety by reference to disclosures made in Timberland Partners Apartment Fund VII, LLC’s Private Placement Memorandum and related attachments, supplements and exhibits. Those documents should be carefully reviewed prior to making an investment decision. An investment in Timberland Apartment Fund VII, LLC would entail a high degree of risk and should only be undertaken by an investor who can afford a total loss of his or her investment.

GETTING STARTED WITH TIMBERLAND PARTNERS INVESTMENTS

How to Invest with Timberland

Persons interested in investing in Timberland Partners Apartment Fund VII, LLC must first read, understand and agree to TPAF VII’s Confidential Private

Placement Memorandum, available upon request. We welcome your questions, please contact our investor relations team.

Robert Fransen President


Greg Ribich Vice President of Investor Relations

Office 952.843.2035Mobile 952.240.6846

[email protected]

Jessie Clausen Investor Relations Specialist


Sam Eaton Director of Investor Relations

Office 952.208.1999Mobile 763.772.5523

[email protected]

A Private Placement Opportunity - Timberland Partners ......8500 Normandale Lake Blvd Suite 700...

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