multifamily real estate investments

SPECIAL SITUATION FUND IVMultifamily Real Estate Investments

IMPORTANT DISCLOSURES

This is neither an offer to sell nor a solicitation of an offer to buy the units in the company. An offering may be made only by means of the private placement memorandum (the “PPM”). This sales literature must be accompanied or preceded by that memorandum and read in conjunction therewith to fully understand the implications and risks of the securities to which it relates.

An investment in the Company’s units is illiquid and involves significant risks and therefore is suitable only for those persons who understand those risks and the consequences of their investment and who are able to bear the risk of

loss of their entire investment. See the “Risk Factors” section of the PPM for a discussion of the material risks that

should be considered before an investment in the units is made.

This presentation is private and confidential. Past performance is no guarantee of future returns. There is no guaranty investment objectives can be achieved and actual results may vary.

Photographs of properties are current investments of other funds sponsored by ApexOne Investment Partners.

Please see additional Important Disclosure Statement on pages 20-21 of this presentation.

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ApexOne Special Situation Fund IV seeks to capitalize on pricing dislocations in the multi-family sector created by the COVID-19 pandemic and the ensuing economic recession.

Apartments are sustainable, and while not recession-proof, they historically, and significantly, outperform other real estate sectors during and following a recession.

EXECUTIVE SUMMARY

3

THE CASE FOR MULTIFAMILY INVESTMENTTHROUGH RECESSION & RECOVERY

4

MULTIFAMILY OUTPERFORMS

5

During and following the most recent recessions:

MULTIFAMILY IS THE LAST REAL ESTATE SECTOR TO EXPERIENCE RENT DECLINE.

MULTIFAMILY HAS THE SHORTEST PERIOD OF RENT DECLINE.

MULTIFAMILY IS THE FIRST SECTOR TO RECOVER TO PRE-RECESSION PEAK.

MULTIFAMILY HAS THE LONGEST DURATION OF RENT GROWTH FROM POST RECESSION RECOVERY UNTIL THE NEXT RECESSION.

MULTIFAMILY HAS EXPERIENCED THE LONGEST RUNS OF SUSTAINED RENT GROWTH OF ANY REAL ESTATE SECTOR.

20012008

RENT DECLINES AND RECOVERYTHE 9/11 RECESSION (2001-2008)

6

-6.7% -7.4%

-17.7%

10.0%

4.3% 5.7%

-20%

-15%

-10%

-5%

0

5%

10%

15%

CUMULATIVE

RENT DECLINEFROM RECESSION

RENT GROWTHPAST PRIOR PEAK (to Next Downturn)

MU

LTIF

AM

ILY

IND

US

TR

IAL

OF

FIC

E

MU

LTIF

AM

ILY

IND

US

TR

IAL

OF

FIC

E

Source: CBRE Research

TIMELINE OF RENT CHANGE

Official End of Recession per National Bureau of Economic Research

20012008

7Source: CBRE Research

DURING & AFTER 2001 RECESSIONNUMBER OF QUARTERS IN EACH PHASE OF CHANGE

Q1 20

01

Q1 20

02

Q1 20

03

Q1 20

04

Q1 20

05

Q1 20

06

Q1 20

07

Q1 20

08

GROWTH TO RETURN TO PRIOR PEAK (+)

NEGATIVE GROWTH TREND (-)

GROWTH PAST PRIOR PEAK (to Next Downturn) (++)

9 -QTRS

15 -QTRS

13 -QTRS

7 +QTRS

8 +QTRS

14 +QTRS

12 ++QTRS

6 ++QTRS

3 ++QTRS

MULTIFAMILY

INDUSTRIAL

OFFICE

RENT DECLINES AND RECOVERYTHE GREAT RECESSION (2008-2020)

2008 2020


CUMULATIVE

RENT DECLINEFROM RECESSION

RENT GROWTHPAST PRIOR PEAK (to Q4 2018)

-7.9%

-17.5% -17.7%-14.1%

25.7%

7.8%5.0%

-4.5%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

MU

LTIF

AM

ILY

IND

US

TR

IAL

OF

FIC

E

RE

TAIL

RE

TAIL

MU

LTIF

AM

ILY

IND

US

TR

IAL

OF

FIC

E

2008 2020

TIMELINE OF RENT CHANGE


DURING & AFTER THE 2008 GREAT RECESSION (2008-2020)NUMBER OF QUARTERS IN EACH PHASE OF CHANGE

GROWTH TO RETURN TO PRIOR PEAK (+)

NEGATIVE GROWTH TREND (-)

GROWTH PAST PRIOR PEAK (to Next Downturn) (++)

Official End of Recession per National Bureau of Economic Research

5 -QTRS

13 -QTRS

21 +QTRS

7++QTRS

9 -QTRS

24 +QTRS

8 ++QTRS

7 +QTRS

29 ++QTRS

21-QTRS

22+QTRS

Q1 20

08

Q1 20

10

Q1 20

11

Q1 20

12

Q1 20

13

Q1 20

14

Q1 20

15

Q1 20

16

Q1 20

17

Q1 20

18

Q1 20

19

Q1 20

09

MULTIFAMILY

INDUSTRIAL

OFFICE

RETAIL

COMMERCIAL REAL ESTATE TRANSACTIONS PLUMMETED RECENTLY,A FASTER FALL THAN DURING THE GREAT FINANCIAL CRISIS

INVESTMENT MARKETS

10*Source: Real Capital Analytics

RCA* INDEX: CURRENT DOWNTURN VS. GREAT FINANCIAL CRISIS

0 2 4 6 8 10 12 14 16 18 20 22 24-2-4-6-8-10-12-14-16-18-20-22-24

140

120

100

80

60

40

20

0

CURRENT DOWNTURN (CD)

NUMBER OF MONTHS FROM JUNE 2007 |JUNE 2019

GREAT FINANCIAL CRISIS (GFC)

CDJun2019100

GFCJun2007100

GFCJan200920

CDApr202023

During The Great Recession, the decline in transaction volume was a "gradual downhill roll"; during the current recession, transaction volume "fell off a cliff."

• PRE COVID GROWTH AND RENTAL DEMAND

• DIVERSIFIED EMPLOYMENT

• STRONG HEALTHCARE AND MEDICAL FACILITIES

• STRONGER STATE UNEMPLOYMENT FUNDS

• RESEARCH, TECH AND INNOVATION HUBS / UNIVERSITIES

• EASE OF ACCESS IN TRANSPORT

• CLIMATE

• MANAGED SUPPLY

EXPECTED CHARACTERISTICS OF FASTER RECOVERY MARKETS

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DON’T DISMISSSMALL DISCOUNTS

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Impact on targeted returns and multiples for ApexOne Special Situation Fund IV when properties are purchased at varying discounts to pre-recession pricing (with and without a Joint Venture Partner).

1.0X

1.5X

2.0X

2.5X

3.0X

3.5X

5%

10%

15%

20%

25%

30%

3X

2X

TARGETED FUND IV MULTIPLE

TARGETED FUND IV RETURNS

18%16%

5%DISCOUNT

PRE-RECESSIONBASE CASE

7.5%DISCOUNT

10%DISCOUNT

PURCHASE PRICE DISCOUNT (RECESSIONARY PRICING)

Targeted Transaction Annualized Returns Targeted Transaction Equity Multiple

FUND IV TRANSACTION METRICS AT PRICE DISCOUNTS(with no JV-Level Carried Interest)

SMALL DISCOUNTS = SIGNIFICANT RETURNSTHE EFFECT OF 5%-10% PURCHASE PRICE DISCOUNTS

13Past performance is no guarantee of future returns. There is no guaranty investment objectives can be achieved. Actual results may vary.

1.0X

1.5X

2.0X

2.5X

3.0X

3.5X

5%DISCOUNT

PRE-RECESSIONBASE CASE

7.5%DISCOUNT

10%DISCOUNT

Targeted Transaction Annualized Returns Targeted Transaction Equity Multiple

FUND IV TRANSACTION METRICS AT PRICE DISCOUNTS(with JV-Level Carried Interest)

3X

2X

18%

16%

PURCHASE PRICE DISCOUNT (RECESSIONARY PRICING)

TARGETED FUND IV RETURNS

TARGETED FUND IV MULTIPLE

5%

10%

15%

20%

25%

30%

*Source: As reported by Prequin and results are from audited or validated funds.**Three of the FOUR 2009 Vintage Funds did not report IRR's, as such, this figure is not meaningful.

0%

5%

10%

15%

20%

25%

2009 2010 2011

NET

IRR

0X

0.5X

1.0X

1.5X

2.0X

2.5X

NET

MU

LTIP

LE

AVERAGE MULTIFAMILY RETURNS (IRR) AVERAGE MULTIFAMILY RETURNS (MULTIPLES)

2009-2011AVERAGE IRR

2009 2010 2011 2009-2011AVERAGE IRR

N/A**

25%

HISTORICAL PERFORMANCE OFREPORTED CRE FUNDS*

DISTRESSED & OPPORTUNISTIC MULTIFAMILY FUNDS 2009-2011


13.6%

23.0%17.9% 1.9X 1.9X 2.1X 2.0X

• Assets with inadequate capitalization which can be acquired below replacement cost.

• Assets in markets impacted by COVID-19 that we believe will recover during the ensuing economic expansion.

• Properties in markets that have become overbuilt in the short-term but have a clear path to re-balance.

• Real estate-related debt, including performing and non-performing loans, which may be acquired from banks, special servicers or other lenders and converted into direct real property interests.

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TARGET ACQUISITIONSSPECIALSITUATION

FUND IV

*Fund III in investing stage with $48M of “dry powder” at 6/20/20 **Projected

THE FUND SUMMARY FUND FUND FUND I II III* FUND VINTAGE 2014 2016 2018 2020

FUND STAGE Harvesting Operating Investing Formation

NUMBER OF PROPERTIES 13 15 9* 15-20

FULL-CYCLE INVESTMENTS 9 3 0 N/A

FUND CAPITAL COMMITMENT $16.9M $55.0M $108.6M $250.0M

ACQUIRED ASSETS AT COST $255.6M $436.1M $330.5M* $800.0M

GROSS RETURN ON SOLD ASSETS 28.9% 27.8% N/A* N/A

NET IRR TO INVESTORS 14.2% 12.9% N/A*** N/A

TARGET NET IRR PER OFFERING 12%-14% 13%-15% 13%-15% 16%-18%

MULTIPLE ON EQUITY 1.7x 2.0x 2.0x** 2.0x-3.0x**

FUND IV


• TARGETED NET RETURNS TO INVESTORS OF 16%-18%

• PREFERRED RETURN OF 8%

• PROJECTED YIELD OF 6%-8%

• TARGETED MULTIPLES ON INVESTED CAPITAL 2.0X TO 3.0X

• FUND LIFE 7 YEARS*

• INVESTMENT PERIOD 18 MONTHS FROM FIRST CLOSING**

• MINIMUM INVESTMENT $1,000,000***

• ASSET MANAGEMENT FEE OF 1.25% ON CALLED CAPITAL

• GP CARRIED INTEREST OF 20% AFTER LP’S RECEIVE PREFERRED RETURN AND RETURN OF CONTRIBUTED CAPITAL (50/50 CATCH UP)

SPECIAL SITUATION FUND IV TERMS

17Past performance is no guarantee of future returns. There is no guaranty investment objectives can be achieved. Actual results may vary.*Subject to two extensions of up to one-year each. **Subject to a six-month extension. ***Subject to waiver by Fund Manager.

TEAM MEMBERS

Jim HearnPartner

Executive Managing Director

Tim BurnsPartner

Executive Managing Director, Chief Investment Officer

Ernest JohnsonPartner

Executive Managing Director

Bill SaulPartner

Managing Director

David SteelePartner

Managing Director

Chris GulledgeSenior Vice PresidentAsset Management

Heather MoosVice President Investor Relations & Operations

Ryan SimonVice President

Asset Management

Kyle GrzybowskiSenior Associate

Acquisitions

Gwen PhamSenior Associate

Asset Management

Nick VaccariAssociate | Acquisitions

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*Units include student housing. **Fund III has $48M of “dry powder” as of August 2020.

TIMELINE EVENTS

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NOV 2011

FOUNDING OF APEXONE INVESTMENT PARTNERS

DEC 2011

FIRST ACQUISITION BY APEXONE

APR 2012

1,000 UNIT* MILESTONE

JUN 2013


MAY 2015


SEP 2017


DEC 2019


JAN 2018

NAMED SELECT SPONSOR BY FREDDIE MAC

JULY 2020

ANNOUNCE FUND IV $250M TARGET RAISE

NOV 2018

$1.0B ACQUISITION

MILESTONE

MAY 2020

$1.3B ACQUISITION

MILESTONE

SEP 2016

SECOND REAL ESTATE FIRM TO EARN FREDDIE MAC GREEN ADVANTAGE DESIGNATION

MAR 2014

FUND I LAUNCHED$16.9M EQUITY RAISE$255.6M ACQUISITIONS

JUL 2016

FUND II LAUNCHED $55.0M EQUITY$436.1M ACQUISITIONS

DEC 2018

LAUNCHED FUND III $108.6M EQUITY RAISED$330.5M ACQUISITIONS**

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2011

DEC 2016

$500M ACQUISITION

MILESTONE

DISCLOSURES

An investment in ApexOne Special Situation Fund IV, LLC (“the Fund”) is speculative and risky. No assurance can be given that limited partners in the Fund will realize their investment objectives or will realize a substantial return (if any) on their investment. Investors should be able to bear the complete loss of their investment in the Fund. For this reason, each prospective subscriber for interests in the Fund should carefully read the Fund’s Private Placement Memorandum (“PPM” or “Memorandum”) and all Exhibits to the Memorandum. Each prospective subscriber should consult with their attorneys, accountants, and business advisors prior to making an investment in the Fund. Only qualified, eligible investors may invest in the Fund.

These materials (the “Presentation”) have been provided for informational purposes only and neither constitutes the PPM of the Fund nor provide a comprehensive disclosure of both the terms of investment and risk disclosures associated with an investment in the Fund. This Presentation is not a complete summary of the terms of the Fund or the background information of persons associated with the General Manager and is qualified in its entirety by, and must be read in conjunction with, the more detailed information included in the Memorandum, the governing documents of the Fund, the Subscription Agreement of the Fund, the Form ADV of the General Manager, and other related documentation, copies of which may be obtained by contacting ApexOne at (713) 231-1421.

This Presentation, furnished on a confidential basis to the recipient, is neither an offer to sell nor a solicitation of any offer to buy any securities, and is intended exclusively for the use of the person to whom it has been delivered.

As the Fund will invest in multifamily, residential real estate, along with other debt instruments, an investment in the Fund does not constitute a diversified investment.

Investors will be reliant on the General Partner to manage the Fund and to make all investment decisions. There can be no assurances or guarantees that the Fund’s investment objectives will be realized, or the Fund’s investment strategy will prove successful. An investment in the Fund may be affected by a number of factors beyond the control of the General Partner. These include risks typically associated with investments in residential real estate such as increased vacancy rates, reletting risk, or decreased rental rates, adverse changes in general economic conditions or local conditions that may reduce the demand for multifamily residential properties, changes in the demand for or supply of competing properties in an area, unanticipated holding costs, the availability and cost of necessary utilities and services, changes in real estate tax rates and other operating expenses, changes in governmental rules and fiscal policies, changes in zoning and other land use regulations, environmental risks such as mold contamination or environmental claims that could be made against the Fund, and natural disasters, most of which are not covered by insurance.

An investment in the Fund may be affected by a number of factors beyond the control of the General Partner that will affect the value of the Fund’s investments. These include risks typically associated with investments in residential real estate that produce income such as increased vacancy rates, reletting risk, or decreased rental rates, adverse changes in general economic conditions or local conditions that may reduce the demand for multifamily residential properties, changes in the demand for or supply of competing properties in an area, unanticipated holding costs, the availability and cost of necessary utilities and services, changes in real estate tax rates and other operating expenses, changes in governmental rules and fiscal policies, changes in zoning and other land use regulations, environmental risks such as mold contamination or environmental claims that could be made against the Fund, and natural disasters, most of which are not covered by insurance.

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HOUSING ECONOMICS

This material includes certain statements, estimates and projections of the Fund with respect to the anticipated future performance of the Fund, and may constitute “forward-looking statements” and are subject to a number of significant risks and uncertainties. Any such forward-looking statements contained herein should not be relied upon as predictions of future events. Certain such forward-looking statements can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “could,” “would likely,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” “anticipates,” “continue” or the negative thereof or other variations thereof or comparable terminology, or by discussions of strategy, plans or intentions. Such forward-looking statements are subject to numerous risks and are necessarily dependent on assumptions, data or methods that may be incorrect or imprecise and may not be realized. In that regard, actual results may differ materially from those in forward-looking statements. As a result of the foregoing, no assurances can be or are given as to future results of operations or financial condition of the Fund.

The Fund’s investment approach has complex tax implications for investors. These ramifications should be reviewed carefully and applied to each investor’s individual circumstances. The Fund may involve structures or strategies that may cause delays in important tax information being sent to investors. You should obtain investment and tax advice from your advisers before deciding to invest.

Although this Presentation has been prepared using public and private sources believed to be reliable, ApexOne makes no warranties or representations with respect to the accuracy or completeness of the information set forth herein. Examples of investment process, risk management, due diligence, portfolio diversification, position sizes, diversification, case studies, leverage, assessment of risk and similar information (together, the “Investment Program”) are presented as general guidelines used for illustration purposes only and are subject to change without notice to investors at any time at the sole discretion of ApexOne. While ApexOne seeks to maintain high standards, the Investment Program is a dynamic process and may vary from one type of investment, lending platform, or time period to another. In addition, the composition and size of, and risks associated with, current or future investments of the Fund may differ substantially from examples set forth in this Presentation. Accordingly, actual implementation of the Investment Program may vary from the case study examples set forth in this Presentation.

CoStar, Witten Advisors, CBRE Research and others have been retained by ApexOne Investment Partners to provide independent market research and economic data to the Sponsor. None are a cosponsor or sponsor of the Fund nor are they providing any endorsement or guaranty of any of the returns projected in this Presentation. All are among the leading providers of apartment and student housing data.

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SPECIAL SITUATION FUND IV PHONE 713.784.8100 EMAIL Ernest Johnson | [email protected] Jim Hearn | [email protected] Bill Saul | [email protected]

WEBSITE ApexOneIP.com

multifamily real estate investments

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