KEELY PARTNERSMulti Family ProgramNovember 2015

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THE INVESTMENTOBJECTIVE The objective is to invest in Institutional size and quality Class A- and Class B (“Target Market”)

apartment projects.

TARGET MARKET Multi-family residential housing located (i) in other than prime areas but which are or can be improved to be the “best of class” in such areas or (ii) in prime “value added” areas but which suffer from deferred maintenance, poor management or which can be acquired on an “opportunistic” basis. Initially the focus will be on Southern California.

RISK ADJUSTED RETURNS

Investment in Target Market apartments historically provides the opportunity to achieve significantly higher returns, on a risk-adjusted basis, than returns on many types of assets including Class A stabilized apartment.

NEITHER PASSIVE INVESTMENT NOR HIGH RISK INVESTMENT

Investing in the Target Market apartments is neither tailored for investors who desire to “park money” nor for investors who are searching for high returns generated by high risk investments. Rather, investment in Target Market apartments is suited for investors searching for moderate cash flow with the possibility of achieving excellent risk-adjusted returns.

LIMITED RISK There is no entitlement risk, no construction risk and no lease-up risk. Historically, the down side risk involved in investing in apartments has shown to be on the lowest end of the risk curve.

PORTFOLIO SALE The long-term goal of investing in the Target Market apartments is to accumulate a portfolio of apartments for the purpose of disposing of the portfolio in a bulk sale to a public buyer (e.g., a REIT) at a “portfolio price.”

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MARKET OPPORTUNITYDEMAND/ SUPPLY

Renter demand for apartments is high and escalating while the supply of apartments fails to keep pace with this escalating demand. Major markets in California offer a unique confluence of factors which creates opportunity for value added apartment investment.

PRIMARY MARKETS

Increasing population and growing economies offer true income growth. Immigration continues to drive population growth in the Target Market.

RENT CONTROL

Rent Control with vacancy decontrol offers a significant opportunity, with downside protection

LAGGING SUPPLY

Development of the supply of apartments put the brakes on in 2008 and the increasing new development since that time has not provided a sufficient supply of apartments to catch up to the increasing demand nor is it projected to do so any time soon. Even with new units coming on line, rents have seen strong increases in the first half of 2015 (per Reis Inc.)

DECLINE IN SINGLE FAMILY HOUSING DEMAND

Baby boomers are downsizing, causing an increase in demand for apartments and a decrease in demand for single-family housing. Millennials, who like living in community settings, no longer value home ownership, causing an increase in demand for apartments and a decrease in demand for single-family housing. Millennials cannot qualify for loans to purchase single-family housing, causing an increase in demand for apartments and a decrease in demand for single- family housing.

Target Market apartment rent growth out-pacing Class A rent growth.

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WHY SOUTHERN CALIFORNIA?

BROKERAGE RELATIONSHIP

Sponsorship has a long-standing relationship with the Target Market apartment brokerage community and investing in apartments is highly controlled by the brokerage community.

CAP RATE MULTIPLE

Apartments sell at a lower cap rate than most other real estate investments and, thus, a rent increase in apartments results in an accelerated increase in value. For example, in a 4% cap rate market, an increase of $1 of net operating income increases value $25 but in a 10% cap rate market, the value is increased only $10.

HISTORICAL RISK PROTECTION

In a declining real estate market, apartments have been a historically safer real estate investment as evidenced by the minimal foreclosure rate of apartment loans during the recent economic downturn.

POPULATION California’s population is now approximately 38.3 million, over 12% of the total U.S. population. Los Angeles County’s population is now over 10 million, or 26% of California’s population. L.A. County would be the 8th most populous state in the U.S. The L.A. County vacancy rate has not exceeded 6.1% during the period 1990 - 2013.

EFFECT OF RISING INTEREST RATES

The chart on the following page shows, historically, increasing interest rates precede real rental rate growth.

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THE LAST UPWARD TRENDING INTEREST RATE MARKET CORRELATED PERFECTLY WITH

INCREASING RENTAL RATES

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WHY SOUTHERN CALIFORNIA?FRACTIONED OWNERSHIP

Owners of Target Market apartments are typically “mom and pop” owners or local syndicators as opposed to institutional investors who in Southern California are the typical owners of Class A Apartments.

QUALITY MARKET Los Angeles, San Diego and Orange Counties are some of the most sought-after markets in the United States for investing in all classes of real estate.

DIVERSE MARKET Los Angeles County alone covers over 4,000 square miles and is the most diverse and populous county in the United States with more than 10 million residents representing more than 220 languages and cultures from around the world.

HISTORICAL RENT SPREAD

In Los Angeles County, rents for Class A apartments average $2,029 per month versus $1,307per month for Target Market apartments. (per Reis Inc.) Historically, this rent spread is significant. In an increasing rent market, this spread permits a faster increase in rents for Target Market apartments than for Class A apartments and, thus, a greater increase in value in Target Market apartments as compared to Class A apartments. Conversely, in a decreasing rent market, this spread acts as a “shock absorber” to otherwise decreasing rents.

IMMIGRATION Southern California is experiencing significant immigration which will increase the demand for Target Market apartments as opposed to the demand for other residential classes.

PUBLIC TRANSPORTATION

Improving public transportation in Southern California (e.g., light rail, subway, etc.) is incentivizing high-density residential development in other than prime locations (e.g., Target Market apartments).

GENTRIFICATION Similar to New York 20 years ago, Southern California is being gentrified so that less attractive residential communities are becoming revitalized and repositioned with Target Market apartments.

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WHY TARGET MARKET APARTMENTS?

HIGH YIELDING CAPITAL IMPROVEMENTS

“Mom and Pop” owners and local syndicators generally will not expend capital to revitalize or reposition Target Market apartments, thereby permitting a purchaser of Target Market apartments to enhance the value (i.e., increased rents) with high yielding capital improvements and reap the reward of the increased value resulting from such revitalization and repositioning.

RENT INCREASES CASH FLOW

Many submarket rents have grown substantially in the last 18 months. Many owners and even brokerage packages underestimate the market, creating buying opportunities. The Target Market apartments offer immediate cash flow with minimal development risk, construction risk or leasing risk.

SPONSORSHIP RECORD

Sponsorship has a 30-year track record of acquiring, revitalizing and repositioning Target Market apartments. The strategy has been to acquire Target Market apartments which are positioned to accept increased rents resulting from high yielding capital improvements enhancing the living experience for renters.

PORTFOLIO ACCUMULATION

Target Market apartments are not owned “in bulk” and, thus, portfolios of Target Market apartments are unavailable for purchase by institutional investors or the public markets.

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Conclusion

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REASONS FOR INVESTING IN TARGET MARKET APARTMENTS

SUPPLY/ DEMAND

The demand for Target Market apartments exceeds the supply of Target Market apartments and this imbalance in supply and demand is projected to increase in the future. $18 billion in CMAS financed apartments have debt maturities from 2015-2017.

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Investment in Target Market apartments permits the investor to take advantage of positive leverage (i.e., 150 basis points), low cap rates, current low rents and, thus, the investment provides the potential for excellent risk-adjusted returns.

RETURNS/RISK The downside scenario in investing in Target Market apartments is the accumulation of Target Market apartments with an income tax sheltered 5% cash-on-cash return (after principal reduction based upon a 30-year amortization) with the opportunity to reposition the Target Market apartments for the purpose of increasing rents and the increasing capitalized value of the Target Market apartments.In other words, the investment in Target Market apartments is not intended to be driven to achieve high internal rates of return but to achieve short term acceptable cash flow with a buildup in asset value and the potential to accumulate a portfolio of Target Market apartments which can be sold to the institutional and/or public markets for a “portfolio price.”

PUBLIC MARKET EXIT

The public market has not yet penetrated the Target Market apartment market because there is no opportunity for it to purchase in scale in as much as the current ownership of Target Market apartments is fractured with little or no concentration of ownership. Thus, there is an opportunity to accumulate a portfolio of Target Market apartments which can be sold into the public market. Historically, the public market has provided a premium for portfolio real estate generating cash flow. Currently, apartment REITs pay an average dividend of approximately 3.8% per annum, approximately 50 basis points less than the typical cap rate used in Southern California to price Target Market apartments in the private market.

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GEORGE M. PAPPAS

George M. Pappas has been buying income properties in Southern California for 35 years. Over the course of nearly 40 investments, income producing properties provide excellent rates of return in the mid 20% range, yielding excellent risk-adjusted returns. George’s wide array of real estate experiences includes working with the William Simon led partnership which acquired failed thrifts to running a small equity fund where raising capital and reporting to investors were an everyday responsibility.

George was hired by Lehman Brothers and the SEC in a receivership capacity to perform workouts of trouble properties. He has operated all types of income property investments, including obtaining residential entitlements for a housing tract in San Marcos.

George also serves as the 22 year Honorary Consul General to Nepal and earned a B.A. in Economics from U.C.L.A. and an M.B.A. from U.S.C.

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MICHAEL MATKINSSpecial Advisor and Investor

Michael L. Matkins is a founding partner of the firm and one of the country’s leading lawyers in real estate development and finance. For more than 40 years, he has advised institutional investors, lenders, property owners, and developers in all aspects of purchase, sale, and financing of properties ranging from office and retail to recreational and mixed- use projects. He guides institutional lenders and investors through the complexities of real estate investing, offering established expertise in loans, joint ventures, partnerships, sale- leasebacks, and other forms of financing and investing. Michael has been involved in numerous multi-hundred-million-dollar real property asset portfolio acquisitions and dispositions. He has also represented institutional investors in the restructuring of substantial investments in California real property, as well as institutional developers in acquiring, entitling, and developing master-planned communities.

Michael is a frequent speaker on real estate and finance trends for various professional organizations.

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INCOME PRODUCING PROPERTIESTRACK RECORD

Real Estate Description Duration YearTotal

InvestmentTotal

Return%Grain (Loss) Total Rtrn/Total Inv

1 Palm Springs Land Finished Industrial Land 2 2004 $215,960 $445,860 106.45% 2.06x

2 Fountain West Apple Valley Pre-Leased Retail Dev. 2 2006 $1,887,000 $2,674,122 41.71% 1.42x

3 Harvard & 20th Apts. Apartments in LA 2.5 2004 $390,732 $654,894 67.61% 1.68x

4 24-Hour Richland Hills Single Tenant Retail 6.1 2005 $1,237,500 $2,562,136 107.04% 2.07x

5 GSA Burbank Pre-Leased GSA Office 5.3 2006 $1,420,000 $2,326,590 63.84% 1.64x

6 24-Hour Lakeline Single Tenant Retail 7.5 2004 $1,000,000 $2,278,374 127.84% 2.28x

7 Uptown LLC Fresno Office 1.7 2005 $1,600,000 $2,100,000 31.25% 1.31x

8 DWP - 3 Freeways Industrial Land in Sylmar 3 2004 $400,000 $613,536 53.38% 1.53x

9 Note Receivable - DWP Clark Unsecured loan 3 2004 $200,000 $246,016 23.01% 1.23x

10 San Juan Hillls CC Golf Course 2 2005 $5,200,000 $8,756,000 68.38% 1.68x

11 Valley Golf LLC Golf Course - Murrietta 2 2005 $406,344 $540,000 32.89% 1.33x

12 Westside Sacramento Parnters Pre leased GSA office 1.0 2005 $5,144,000 $8,210,000 59.60% 1.6x

13 1005 Federal Ave Multi Family 10 2008 $800,000 $2,920,000 265.00% 3.65x

14 15735-43 Eucalyptus Multi Family 5 2009 $1,060,000 $3,250,000 2047% 3.06x

15 2705 Spalding Multi Family 5 2008 $460,000 $1,460,000 217% 3.17x

16 222 E Market Long Beach, CA Multi Family 5 2009 $290,000 $705,500 143% 2.43x

17 340+4350 Marine Multi Family 3 2008 $800,000 $1,126,213 40.78% 1.41x

18 765 Cerritos Multi Family 3 2009 $939,000 $1,570,000 47.89% 1.48x

19 558 Dairy Ave Multi Family 5 2008 $400,000 $947,500 61.88% 1.62x

Total/Avg $23,850,536 $39,871,541 68.87% 1.67x

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INCOME PRODUCING PROPERTIESTRACK RECORD

Net Sales Price Debt Equity Purchase Price Profit

1 222 E Market $1,034,000 $465,000 $569,000 $700,000 59%

2 2705 Spalding $2,422,500 $1,368,500 $430,000 $1,460,000 223%

3 6331 Linden $1,900,000 $1,610,000 $795,000 $1,760,000 45%

4 138 Elm Project $4,200,000 $1,700,000 $1,200,000 $2,800,000 83%

5 Whittier $14,000,000 $3,400,000 $10,750,000 81%

* Does not include cash flow of over 10% upon stabilization and sales value is based on current market conditions** Based on current market assumptions

Based on current escrows or projection based on current market rents