BPG Investment Partnership IX, L.P. Year Ended December 31 ......1309-1130741 2 Opinion In our...

F I N A N C I A L S T A T E M E N T S

BPG Investment Partnership IX, L.P. Year Ended December 31, 2013 and the Period February 24, 2012 (Inception) Through December 31, 2012 With Report of Independent Auditors

Ernst & Young LLP

1309-1130741

BPG Investment Partnership IX, L.P.

Financial Statements

Year Ended December 31, 2013 and the Period February 24, 2012 (Inception) Through December 31, 2012

Contents

Report of Independent Auditors.......................................................................................................1

Audited Financial Statements

Statements of Assets, Liabilities, and Partners’ Capital ..................................................................3 Schedules of Investments .................................................................................................................4 Statements of Operations .................................................................................................................6 Statements of Changes in Partners’ Capital .....................................................................................7 Statements of Cash Flows ..............................................................................................................11 Notes to Financial Statements ........................................................................................................12

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Report of Independent Auditors

To the Partners of BPG Investment Partnership IX, L.P.

We have audited the accompanying financial statements of BPG Investment Partnership IX, L.P. which comprise the statements of assets, liabilities, and partners’ capital, including the schedules of investments, as of December 31, 2013 and 2012, and the related statements of operations, changes in partners’ capital, and cash flows for the year ended December 31, 2013 and the period February 24, 2012 (inception) through December 31, 2012, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in conformity with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

A member firm of Ernst & Young Global Limited

Ernst & Young LLP One Commerce Square Suite 700 2005 Market Street Philadelphia, PA 19103

Tel: +1 215 448 5000 Fax: +1 215 448 5500 ey.com

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Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the BPG Investment Partnership IX, L.P. at December 31, 2013 and 2012, and the results of its operations and its cash flows for the year ended December 31, 2013 and the period February 24, 2012 (inception) through December 31, 2012 in conformity with U.S. generally accepted accounting principles.

ey March 27, 2014

A member firm of Ernst & Young Global Limited

2013 2012AssetsInvestments in real estate ventures, at fair value

(cost $81,055 and $42,150, respectively) $ 86,175 $ 43,868 Cash and cash equivalents 3,536 425 Other assets 180 506 Total assets $ 89,891 $ 44,799

Liabilities and partners’ capitalLiabilities:

Due to affiliates $ 312 $ 708 Accrued expenses 54 50

Total liabilities 366 758

BPG Investment Partnership IX, L.P.:General Partner 3,209 530 Limited Partners 86,316 43,511

Total Partners’ capital 89,525 44,041 Total liabilities and partners’ capital $ 89,891 $ 44,799

See accompanying notes.


Statements of Assets, Liabilities, and Partners’ Capital(Dollars in Thousands)

December 31

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Investment No. of Acquisition Historical FairInvestments in Real Estate Ventures Location Type Units Square Feet Date Cost Value

(Unaudited) (Unaudited)

Virginia Multifamily Portfolio Fredericksburg, VA Multifamily 676 March 29, 2012 $ 21,602 $ 21,068 23.5 %Village Park of Ballwin Ballwin (St. Louis), MI Multifamily 251 October 28, 2013 5,636 4,674 5.3

27,238 25,742 28.8

IP9 Lincoln Towne Center Investors, LLC Scottsdale, AZ Office 223,605 February 28, 2012 15,025 21,125 23.6 IP9 200 Lawrence Drive Investors, L.P. West Chester, PA Office 111,451 July 31, 2012 2,849 2,251 2.5 IP9 Meridian Partners, LLC N Meridian, IN Office 329,546 December 6, 2013 14,502 13,146 14.7

664,602 32,376 36,522 40.8

Suburban DC Office/Lab Portfolio Gaithersburg, MD Flex/Rd 282,523 February 1, 2013 19,167 20,861 23.3 282,523 19,167 20,861 23.3

IP9 Carmel Office Investors, LLC Indianapolis, IN Industrial/land 97,329 July 31, 2012 2,274 3,050 3.4 97,329 2,274 3,050 3.4

Total Investments in Real Estate Ventures 927 1,044,454 $ 81,055 $ 86,175 96.3 %


of Net Assets


Schedule of Investments(Dollars in Thousands)

December 31, 2013

Percentage

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Investment No. of Acquisition Historical FairInvestments in Real Estate Ventures Location Type Units Square Feet Date Cost Value

(Unaudited) (Unaudited)

Virginia Multifamily Portfolio Fredericksburg, VA Multifamily 676 March 29, 2012 $ 21,602 $ 20,455 46.4 % 21,602 20,455 46.4

IP9 Lincoln Towne Center Investors, LLC Scottsdale, AZ Office 223,605 February 28, 2012 15,025 18,810 42.7 IP9 200 Lawrence Drive Investors, L.P. West Chester, PA Office 111,451 July 31, 2012 2,849 2,184 5.0

335,056 17,874 20,994 47.7

IP9 Carmel Office Investors, LLC Indianapolis, IN Industrial/land 97,329 July 31, 2012 2,674 2,419 5.5 97,329 2,674 2,419 5.5

Total Investments in Real Estate Ventures 676 432,385 $ 42,150 $ 43,868 99.6 %


of Net Assets


Schedule of Investments(Dollars in Thousands)

December 31, 2012

Percentage

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PeriodFebruary 24,

2012(Inception)

Year Ended ThroughDecember 31, December 31,

2013 2012Investment incomeDistributions from investments in real estate ventures 9,360$ 3,005$ Asset management fees from investments in real estate ventures 964 499 Other interest income 2 – Total income 10,326 3,504

ExpensesAsset management fees – related party 1,450 846 General and administrative 377 403 Amortization of deferred financing costs 80 – Interest expense 27 – Total expenses 1,934 1,249 Net investment income 8,392 2,255

Net change in unrealized gainNet change in unrealized gain on investments in

real estate ventures 3,402 1,718 Net increase in partners’ capital resulting

from operations 11,794$ 3,973$

Allocation of net increase in partners’ capital resultingfrom operations

General Partner 2,696$ 471$ Limited Partners 9,098 3,502

11,794$ 3,973$


Statements of Operations(Dollars in Thousands)


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Partners’ 4th, 5th, 6th and 7th Closing | Net Net Increase Partners’Capital Closing Evergreen | Investment in Partners’ Capital

January 1, Cash Contribution Return of | Equity Cash Capital from December 31,2013 Contributions Reallocation Capital | Contributed Distributions Operations 2013

BPG Investment Partnership IX |General Partner: |

Bergen GP9 Limited Partnership $ 64 $ 54 $ (58) $ (6) | $ 54 $ (7) $ 9 $ 56 Bergen GP9 Limited Partnership (Promote) 466 – – – | 466 – 2,687 3,153

Limited Partners: |Executive Partners-IPIX, L.P. 1,674 1,401 (1,506) (164) | 1,405 (179) 228 1,454 Executive Partners II-IPIX, L.P. – 156 257 – | 413 (12) 32 433 PA State Employees’ Retirement System 8,018 6,712 (7,215) (784) | 6,731 (860) 1,093 6,964 West Virginia Investment Management Board 9,621 8,055 (8,658) (941) | 8,077 (1,032) 1,313 8,358 United Food and Commercial Workers |

International Union-Industry Pension Fund 6,414 5,370 (5,772) (627) | 5,385 (688) 875 5,572 United Food and Commercial Workers |Unions and Employers Midwest Pension Fund 3,207 2,685 (2,886) (313) | 2,693 (344) 437 2,786

Laborers’ Pension Fund 3,207 2,685 (2,886) (313) | 2,693 (344) 437 2,786 Danvers Contributory Retirement System 321 269 (289) (31) | 270 (34) 43 279 PNC1 3,849 3,222 (3,463) (376) | 3,232 (413) 524 3,343 PNC2 449 376 (404) (44) | 377 (48) 61 390 PNC3 353 295 (317) (35) | 296 (38) 48 306 PNC6 321 269 (289) (31) | 270 (34) 43 279 PNC5 160 134 (144) (16) | 134 (17) 22 139 PNC4 96 81 (87) (9) | 81 (10) 13 84 The First Hospital Foundation 321 269 (289) (31) | 270 (34) 43 279 Progin Investments. LLC 802 671 (721) (78) | 674 (86) 109 697 PNC8 321 269 (289) (31) | 270 (34) 43 279 PNC7 1,604 1,342 (1,443) (157) | 1,346 (172) 219 1,393 PNC9 1,604 1,342 (1,443) (157) | 1,346 (172) 219 1,393 DHCP1 400 336 (361) (39) | 336 (43) 55 348 DHCP2 160 134 (144) (16) | 134 (17) 22 139 DHCP3 321 269 (289) (31) | 270 (34) 43 279 DHCP4 160 134 (144) (16) | 134 (17) 22 139 KK 80 67 (72) (8) | 67 (8) 11 70 PM 48 40 (43) (5) | 40 (5) 7 42 TEG-1 – 269 29 (31) | 267 (34) 46 279 TEG-2 – 269 29 (31) | 267 (34) 46 279


Statement of Changes in Partners’ Capital(Dollars in Thousands)

Year Ended December 31, 2013

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|TEG-3 –$ $ 94 $ 10 $ (11) | $ 93 $ (12) 17$ 98$ TEG-4 – 107 11 (12) | 106 (14) 19 111 TEG-5 – 54 6 (6) | 54 (7) 9 56 TEG-6 – 64 22 (6) | 80 (8) 12 84 TEG-7 – 64 22 (6) | 80 (8) 12 84 TEG-8 – 376 40 (44) | 372 (48) 66 390 TEG-9 – 269 29 (31) | 267 (35) 47 279 PNC10 – 537 57 (63) | 531 (68) 94 557 Bucks County Employee Retirement System and Trust – 1,141 1,784 – | 2,925 (283) 423 3,065 TK – 104 162 – | 266 (26) 39 279 JW – 233 365 – | 598 (44) 73 627 Montana Pension Fund – 3,111 4,864 – | 7,975 (235) 618 8,358 Publisher – 207 324 – | 531 (16) 42 557 PNC 11 – 207 324 – | 531 (16) 42 557 GB&SB – 26 47 – | 73 (2) 6 77 CR – 10 16 – | 26 (1) 3 28 TEG 10 – 26 41 – | 67 (2) 5 70 Peperdine University – – 798 – | 798 (1) 39 836 Insulators Local No 23 Pension Fund – – 399 – | 399 (1) 20 418 Fire & Police Employees’ Retirement System of | City of Baltimore – – 6,646 – | 6,646 (8) 327 6,965 Rowan University Foundation, Inc. – – 532 – | 532 (1) 26 557 Creighton University – – 1,595 – | 1,595 (2) 79 1,672 Real Estate Alternatives Portfolio 4 HR, LLC (Aegon) – – 2,127 – | 2,127 (3) 105 2,229 PFM 1 – – 1,416 – | 1,416 (2) 70 1,484 Wilkes Barre City Aggregate Pension Trust Fund – – 778 – | 778 (1) 38 815 PFM 2 – – 724 – | 724 (1) 36 759 PFM 3 – – 532 – | 532 (1) 26 557 PFM 4 – – 193 – | 193 – 9 202 Exeter Township Police Pension Plan – – 106 – | 106 – 5 111 Community College of Philadelphia Foundation – – 86 – | 86 – 5 91 U.S. Bank National Association as Trustee FBO City of | Roseville Post-Retirement Benefits Program Trust – – 485 – | 485 (1) 24 508

Statement of Changes in Partners’ Capital (continued)(Dollars in Thousands)



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|

Statement of Changes in Partners’ Capital (continued)(Dollars in Thousands)



U.S. Bank National Association as Trustee FBO San | Bernardino Municipal Water Department OPEB Trust –$ $ – $ 133 $ – | $ 133 $ – 6$ 139$ U.S. Bank National Association as Trustee FBO City of | Santa Rosa Post-Retirement Medical Benefits Defined | Contribution Plan for Current and Former Members of | Local 1401, City’s Unit-Fire Fighting Plan Trust – – 73 – | 73 – 4 77 Bristol Township Police Pension Plan – – 465 – | 465 (1) 24 488 SPT – – 20 – | 20 – 1 21 Central Pension Fund of the International Union of | Operating Engineers and Participating Employers – – 7,976 – | 7,976 (10) 393 8,359 Baylor College of Medicine – – 3,988 – | 3,988 (5) 196 4,179 JB&DB – – 106 – | 106 – 5 111 Mather Foundation – – 1,595 – | 1,595 (2) 79 1,672

$ 44,041 $ 43,805 $ – $ (4,500) | $ 83,346 $ (5,615) $ 11,794 $ 89,525

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Partners’ | Net Net Increase Partners’Capital 2nd & 3rd Evergreen | Investment Other in Partners’ Capital

February 24, Cash Closing Return of | Equity Cash Increases Capital from December 31,2012 Contributions Reallocation Capital | Contributed Distributions (Decreases) Operations 2012

BPG Investment Partnership IX |General Partner: |

Bergen GP9 Limited Partnership $ – $ 84 $ (14) $ (7) | $ 63 $ (5) $ 1 $ 5 $ 64 Bergen GP9 Limited Partnership (Promote) – – – – | – – – 466 466

Limited Partners: |Executive Partners-IPIX, L.P. – 2,104 (268) (179) | 1,657 (127) 9 135 1,674 PA State Employees’ Retirement System – 6,312 2,314 (694) | 7,932 (440) (120) 646 8,018 West Virginia Investment Management Board – 12,623 (2,051) (1,054) | 9,518 (754) 83 774 9,621 United Food and Commercial Workers |

International Union-Industry Pension Fund – 8,416 (1,367) (703) | 6,346 (503) 55 516 6,414 United Food and Commercial Workers |Unions and Employers Midwest Pension Fund – 4,208 (684) (351) | 3,173 (252) 28 258 3,207

Laborers’ Pension Fund – 4,208 (684) (351) | 3,173 (252) 28 258 3,207 Danvers Contributory Retirement System – 421 (69) (35) | 317 (25) 3 26 321 PNC1 – 5,049 (820) (422) | 3,807 (302) 34 310 3,849 PNC2 – 589 (96) (49) | 444 (35) 4 36 449 PNC3 – 463 (75) (39) | 349 (28) 4 28 353 PNC6 – 421 (69) (35) | 317 (25) 3 26 321 PNC5 – 210 (34) (18) | 158 (12) 1 13 160 PNC4 – 126 (21) (11) | 94 (8) 2 8 96 The First Hospital Foundation – 421 (68) (35) | 318 (25) 2 26 321 JP – 873 (1) (79) | 793 (57) 1 65 802 PNC8 – 62 272 (17) | 317 (13) (9) 26 321 PNC7 – 311 1,359 (83) | 1,587 (66) (46) 129 1,604 PNC9 – 311 1,359 (83) | 1,587 (66) (46) 129 1,604 DHCP1 – 78 340 (21) | 397 (16) (13) 32 400 DHCP2 – 31 136 (8) | 159 (7) (5) 13 160 DHCP3 – 62 272 (17) | 317 (13) (9) 26 321 DHCP4 – 31 136 (8) | 159 (7) (5) 13 160 KK – 83 (4) | 79 (2) (3) 6 80 PM – 50 (2) | 48 (1) (2) 3 48

$ – $ 47,414 $ – $ (4,305) | $ 43,109 $ (3,041) $ – $ 3,973 $ 44,041


Statement of Changes in Partners’ Capital(Dollars in Thousands)

Period February 24, 2012 (Inception) Through December 31, 2012

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PeriodFebruary 24,

2012(Inception)

Year Ended ThroughDecember 31, December 31,

2013 2012Cash flows from operating activitiesNet increase in partners’ capital resulting from operations 11,794$ 3,973$ Adjustments to reconcile net increase in partners’ capital

resulting from operations to net cash used in operating activities:

Amortization of deferred financing costs 80 – Net change in unrealized gain on investments in

real estate ventures (3,402) (1,718) Distributions from real estate ventures 400 – Investments in real estate ventures (39,305) (42,150) Changes in assets and liabilities:

Other assets 421 (506) Due to affiliates (396) 708 Accrued expenses 4 50

Net cash used in operating activities (30,404) (39,643)

Cash flows from financing activitiesCapital contributions from partners 43,805 47,414 Distributions to partners (10,115) (7,346) Proceeds from line of credit 6,118 – Repayment of line of credit (6,118) – Financing cost incurred (175) – Net cash provided by financing activities 33,515 40,068 Net increase in cash and cash equivalents 3,111 425

Cash and cash equivalents, beginning of period 425 – Cash and cash equivalents, end of period 3,536$ 425$

Interest paid on borrowings 27$ –$


Statements of Cash Flows(Dollars in Thousands)


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Notes to Financial Statements (Dollars in Thousands)

December 31, 2013

1. Organization and Business Purpose

BPG Investment Partnership IX, L.P. (the Partnership) is a Pennsylvania limited partnership. The Partnership invests in and acquires, holds, operates, and disposes of operational real estate through equity interests.

Bergen GP9 Limited Partnership (the General Partner) is the sole General Partner of the Partnership and has the exclusive right to conduct the business and affairs of the Partnership, subject only to certain protective rights afforded the Limited Partners by the terms of their limited partnership agreement. The General Partner and the Limited Partners are collectively referred to as the Partners.

The Partnership agreement stipulates a partnership dissolution date of February 24, 2019; provided, however, that the General Partner may, in its sole discretion, extend the term for up to two additional one-year periods. However, the Partnership agreement also stipulates that the Partnership shall not terminate until its affairs have been wound up and its assets distributed as provided in the agreement.

Operations commenced on February 24, 2012. The Partnership acquired its first investment in real estate on February 28, 2012.

2. Provisions of the Partnership

All capitalized terms used herein, unless otherwise defined, are defined in the Partnership agreement.

Partners’ Capital Commitments

The Partners initially committed to contribute $110,500 to the Partnership. The capital commitments were increased on several occasions through December 31, 2013. Aggregate capital commitments as of December 31, 2013 amounted to $310,000. The unfunded capital commitments are expected to be drawn as needed, as determined by the General Partner, to invest in real estate ventures and to pay partnership expenses including but not limited to the asset management fee payable to an affiliate of the General Partner. As of December 31, 2013, the total unfunded capital commitments of the Partners aggregate to $227,586, representing 73.4% of total capital commitments.


Notes to Financial Statements (continued) (Dollars in Thousands)

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2. Provisions of the Partnership (continued)

Distributions

Distributions of Cash Flow from Operations and Cash Flow from Sale or Refinancing, as defined in the Partnership agreement, will be paid to the Partners in the following order or priority (subject to certain tax distribution provisions):

a. First, to the Partners until such time as the Preferential Return Account of each Partner is reduced to zero, in proportion to the amounts thus owed to each such Partner;

b. Second, to the Partners in reduction of their then-outstanding Capital Balances, in proportion to the respective amounts of such Capital Balances, until such time as their respective Capital Balances shall have been reduced to zero;

c. Third, (i) fifty percent (50%) to the Partners, pro rata in accordance with their respective Base Percentages, and (ii) fifty percent (50%) to the General Partner until the General Partner has received in the current and all prior Annual Periods an amount equal to twenty percent (20%) of all distributions made pursuant to priority a. and made or being made pursuant to this section in the current and all prior Annual Periods; and,

d. Thereafter, any balance shall be distributed eighty percent (80%) to the Partners, pro rata in accordance with their respective Base Percentages, and twenty percent (20%) to the General Partner.

During 2013 and 2012, the Partnership made $5,615 and $3,041 in cash distributions to its partners representing returns of investment income and $4,500 and $4,305 in cash distributions to its partners representing returns of capital.

Allocations of Net Increases and Net Decreases in Partners’ Capital Resulting From Operations

Net increases and net decreases in partners’ capital resulting from operations shall be allocated to the Partners in accordance with the economics of the Partnership Agreement.



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3. Summary of Significant Accounting Policies

Basis of Presentation

The Partnership has determined that it is an investment company as defined in Accounting Standards Codification (ASC) 946, Financial Services – Investment Companies, and has followed the provisions of ASC 946 in preparing these financial statements. ASC 946 requires investments to be recorded at their estimated fair value. The difference between the estimated fair value and cost of the investment is reflected as a change in the unrealized gain in the accompanying statements of operations.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions, particularly with respect to the fair value of investments, that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Management of the Partnership seeks investment opportunities that offer the possibility of obtaining substantial capital appreciation. Certain events particular to the real estate industry as well as general economic and political conditions, may have a significant negative impact on the operations and liquidity of the real estate in which the Partnership invests. Such events are beyond the Partnership’s control, and the likelihood that they may occur and their ultimate impact cannot be predicted.

Revenue Recognition

Distributions from the Partnership’s investments in real estate ventures, as reflected in the accompanying statements of operations, represent distributions of operating cash flow received by the Partnership from its investments in real estate ventures.



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3. Summary of Significant Accounting Policies (continued)

Fair Value Measurements

The hierarchy established under ASC 820, Fair Value Measurements and Disclosures, gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Partnership’s financial instruments recorded on the statements of assets, liabilities and partners’ capital include cash and cash equivalents, due to affiliates and accrued expenses. Because of their short-term maturities, the carrying values of these financial instruments approximate fair value.

As required by ASC 820, the Partnership’s real estate investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The three levels of the fair value hierarchy are as follows:

• Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

• Level 2 – Quoted prices for similar assets or liabilities, or inputs that are observable, either directly or indirectly, for substantially the full term through corroboration with observable market data. Level 2 includes investments valued at quoted prices adjusted for legal or contractual restrictions specific to the security.

Level 3 – Pricing inputs are unobservable for the asset or liability, that is, inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Level 3 includes private portfolio investments that are supported by little or no market activity.

Fair value of the Partnership’s investments is based on an exit price or the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. Under ASC 820, fair value measures reflect all of the assumptions that market participants would use in pricing the asset or liability, including assumptions about the risk inherent in a particular valuation technique, the effect of a restriction on the sale or use of an asset, and the risk of nonperformance.



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Investments in real estate entities reflect the fair value of the underlying ventures’ net assets, pursuant to the distribution provisions provided for in the applicable underlying partnership agreements. The valuations of investments are updated periodically by estimates prepared by the General Partner in the absence of readily ascertainable market values. At December 31, 2013, the General Partner estimated the value of all investments of the Partnership. All real estate investments are classified as Level 3.

The valuation of investments in real estate ventures is determined by the General Partner using methods most appropriate for the type of real estate investment. Those valuation methods include, but are not limited to, the following: (1) forecasts of future net cash flows based on the General Partner’s analysis of future earnings from the investment plus anticipated net proceeds from the sale, disposition or resolution of the investment, discounted at a risk-adjusted rate; (2) prevailing market capitalization rates or earnings multiples applied to stabilized income or adjusted earnings from the investment; (3) recent sales of comparable investments; (4) independent third-party appraisals; and (5) sale negotiations and bona fide purchase offers received from independent parties. The discounted cash flow technique is the primary method employed by the General Partner supplemented by one or more of the other valuation techniques identified above, as applicable. Two significant unobservable inputs used in the discounted cash flow technique are discount rate and terminal cap rate. These unobservable inputs are inter-related. A significant increase in the discount rate or terminal cap rate in isolation would result in a significantly lower fair value measurement. The estimated fair values do not necessarily represent the prices at which the real estate investments would sell, since market prices can only be determined by negotiation between a willing buyer and a willing seller.



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The following table presents additional information about inputs used for the estimation of the fair value of the Partnership’s investments in real estate ventures as of December 31, 2013 and 2012:

Investment Unobservable December 31, 2013

Range December 31, 2012

Range Type Inputs Low High Low High

Multi-family Discount rate 9.00% 9.50% 9.00% 9.50% Terminal cap rate 6.75 8.00 6.75 7.00 Flex/RD Discount rate 9.00 12.00 – – Terminal cap rate 8.00 8.00 – – Office Discount rate 9.00 11.00 9.50 10.75 Terminal cap rate 7.50 9.50 7.50 9.50 Industrial Discount rate 10.00 10.00 11.50 11.50 Terminal cap rate 9.50 9.50 9.50 9.50 Property and investment values and related results of operations are affected by, among other things, the availability of capital, occupancy rates, rental, interest and inflation rates, property tax and operating expense levels, general and local economic conditions, property management skill, competition and changes in zoning laws. Because the determination of fair value involves subjective judgments, and given the inherent uncertainty of valuation assumptions regarding capitalization rates, discount rates, leasing and other factors, the estimated fair values reflected in the financial statements may differ from the values that ultimately are realized by the Partnership, and the differences could be material. The concentration of investments in real estate ventures may pose market risk to the Partnership.

Cash and Cash Equivalents

The Partnership considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At times, the Partnership’s cash and cash equivalents may exceed federally insurable limits. The Partnership believes it mitigates this risk by investing in or through a major financial institution.



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Income Taxes

In conformity with the Internal Revenue Code and applicable state and local tax statutes, taxable income or loss of the Partnership is required to be reported in the tax returns of the partners in accordance with the terms of the Partnership Agreement. Accordingly, no provision has been made in the accompanying financial statements for any federal, state, or local income taxes.

No uncertain tax positions have been identified that would result in the recording of a liability for unrecognized tax benefits, and correspondingly, no benefit recognition has been identified that would affect the effective tax rate. Additionally, there are no possibly significant unrecognized tax benefits that are reasonably expected to occur within the next 12 months. The Partnership’s policy is to recognize interest accrued related to unrecognized benefits in interest expense and penalties in general and administrative expense. There are no interest and penalties expensed in the year ended December 31, 2013 and the period February 24, 2012 (Inception) through December 31, 2012 and no interest and penalties are accrued at December 31, 2013 and 2012.

The tax years that remain open to examination include the tax returns for fiscal 2012-2013.

4. Investments in Real Estate Entities

The following table summarizes the Partnership’s investments in real estate ventures:

Level 3

Balance at January 1, 2012 $ – Net change in unrealized gain 1,718 Investments in real estate ventures 42,150

Balance at December 31, 2012 43,868 Net change in unrealized gain 3,402 Investments in real estate ventures 39,305 Distributions from real estate (400)

Balance at December 31, 2013 $ 86,175



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4. Investments in Real Estate Entities (continued)

The net change in net unrealized gain in the table above is included in net increase in partners’ capital resulting from operations on the accompanying statements of operations. Net change in unrealized gain relates to those investments in real estate ventures held by the Partnership at December 31, 2013 and 2012, respectively.

The real estate entities in which the Partnership invests are encumbered by mortgage financing. Scheduled installments due and maturities of the mortgage notes payable by the real estate entities in which the Partnership is invested at December 31, 2013 are as follows:

2014 $ 1,312 2015 5,597 2016 2,847 2017 23,028 2018 48,546 Thereafter 84,038 $ 165,368

5. Revolving Credit Agreement

On January 24, 2013, the Partnership entered into a revolving credit agreement with an available line of $10,000. The credit agreement matures on January 26, 2015, unless terminated earlier in accordance with the agreement. Any amounts borrowed on the line by the Partnership is secured by the Partnership’s unfunded capital commitments and bears interest at either a LIBOR Rate or Base Rate, as defined in the credit agreement, as elected by the Partnership. As of December 31, 2013, there were no borrowings outstanding against the credit agreement. The Partnership incurs an unused commitment fee equal to 0.25% per annum on the then-unused facility amount calculated daily and payable quarterly in arrears.

6. Related Party Transactions

In accordance with the Partnership Agreement, the Partnership incurs an annual asset management fee payable to an affiliate of the General Partner. Commencing on the Management Fee Commencement Date and through the Investment Period, as defined, the management fee shall be equal to the sum of (0.5%) per annum of each Partner’s committed capital contributions



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6. Related Party Transactions (continued)

amount and (1.0%) per annum of the capital contributions made by such Partners, provided, that the annual rate of (1.0%) calculated for any Partner with a committed capital contributions amount of more than $25,000 shall be reduced by (0.01%) for each $1,000 of committed capital contributions above $25,000, but in no event will the annual rate of (1.00%) for any Partner be less than (0.5%) in or with respect to Projects, as defined, that have not been sold (which amount shall be decreased for any permanent and unrecoverable write-downs of Projects) (the resulting amount, the “Base Amount”). For any Partners with a committed capital contributions amount of more than $25,000, the management fee shall be equal to (1.5%) per annum of Base Amount, provided that such annual rate shall be reduced by (0.01%) for each $1,000 of committed capital contributed above the $25,000, but in no event will the annual rate for any such Partner be less than (1.0%).

The Partnership earns an annual asset management fee from its investments in real estate ventures equal to 0.5% of the capital committed to its investments in real estate ventures, and 1.0% of capital contributions made by the Partners.

Affiliates of the General Partner earned the following fees in connection with the services provided to certain of the limited partnerships and limited liability companies in which the Partnership is invested:

Year Ended December 31,

2013

Period February 24,

2012 (Inception)

through December 31,

2012 Property management fees $ 634 $ 251 Construction management fees 57 66 Development fees – 52



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7. Contingent Liabilities and Commitments

In the normal course of business, the Partnership enters into contracts that contain a variety of representations and warranties, which provide general indemnities. The Partnership’s maximum exposure under these arrangements is unknown, as this would involve future claims against the Partnership that have not yet occurred. However, the Partnership expects the risk of loss due to these warranties and indemnities to be minimal.

8. Financial Highlights

The following represents the Limited Partners’ ratios to average limited partners’ capital for the year ended December 31, 2013 and for the period February 24, 2012 (Inception) through December 31, 2012. The ratios have been calculated for all Limited Partners’ capital taken as a whole and have not been annualized.

2013 2012 Ratios to Limited Partners’ capital:(a)

Net investment income 11.95)% 5.75)%

Operating expense 2.75)% 3.18)% Incentive allocation(b) 3.83 1.19 Total operating expense and incentive allocation 6.58)% 4.37)%

Internal rate of return 13.54)% 10.58)%

(a) Average Limited Partners’ capital is based on beginning-of-period Limited Partners’

capital adjusted for quarterly time-weighted contributions and distributions.

(b) In accordance with the Partnership Agreement, the incentive allocation to the Fund IX Partners was $2,687 and $466 for the years ended December 31, 2013 and for the period February 24, 2012 (Inception) through December 31, 2012, respectively. This incentive allocation is based upon the provisions of the Partnership Agreement as described in Note 2.



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9. Subsequent Events

The Partnership has evaluated subsequent events through the date the financial statements were available to be issued or March 27, 2014.

On February 15, 2014, the Partnership increased the borrowing capacity on its revolving credit agreement to $25,000. No other amendments to the revolving credit agreement have occurred. On March 19, 2014, the Partnership borrowed $15,900 on its revolving credit agreement.

On March 20, 2014, the Partnership acquired an investment in multi-family real estate properties located in Minneapolis, Minnesota for a purchase price of $33,000.

On March 20, 2014, the Partnership called capital in the amount of $32,424 to fund the acquisition of certain investments.

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