HARBOUR REALTY PARTNERS

Harbour Realty Partners

Harbour Realty Partners (“HRP”) is an integrated real estate investment firm specializing in the acquisition, management and disposition of apartment communities across the United States.

Harbour’s key principals average more than 20 years of commercial real estate experience. This includes the acquisition and/or development, and management of over 7,100 multifamily apartment units, of which approximately 4,000 are still overseen by Harbour’s asset management team.

HRP seeks to acquire apartments at valuations below replacement cost that generate strong current cash flow. Harbour is a real estate investment firm dedicated solely to investment in apartment communities.

Equity Co-Investment

To allow individual investors the capability of investing in larger, institutional-quality assets, HRP aligns with institutional partners who will co-invest up to 90% of the equity required for asset acquisition.

The co-investment structure provides the following advantages:

Equity Leverage• - Through participation with HRP, individual investors are able to invest alongside major institutional real estate partners. $10 million in investor equity will create a total equity pool of up to $100 million, amassing up to $300 million in buying power (see Fig. 1).

Diversification• - With this expanded purchas-ing power, HRP is able to acquire a wider range of assets, allowing both geographic and asset diversity.

Dual Due Diligence• - HRP, and its institutional co-investment partner(s), perform separate and extensive due diligence on every asset acquired for our investors. This added level of scrutiny augments the underwriting process and thus investment performance.

Deal Flow • - HRP’s alignment with its institutional co-investment partner(s) enhances the credibility of HRP in the marketplace. These relationships increase the probability of identifying off-market asset acquisitions which creates opportunities for better pricing and execution.

Harbour’s management team has acquired, and/or developed, and managed over 7,100 multifamily units over the past seven years.

Acquisition ValueDebtEquity Participation

HRP JV Partner Lenders

General Partner

10% 90%* 70%**

$300 million

*Assumes 90-10% co-invest. Range is 5-20%**HRP allows maximum debt leverage of 75%

InstitutionalPartner

Banks, Freddie Mac,Fannie Mae

HRP Acquisition StrategyFig. 1

Multifamily Investments

Multifamily investments have consistently outperformed the three other major real estate asset classes over the past 30 years.

During the recent real estate cycle, many multifamily properties were acquired with the expectation of rapid asset appreciation through rising rents. In fact, the housing bubble, which created significant inventory of low-cost housing coupled with readily available subprime debt, converted many traditional renters into homeowners. Higher vacancies put downward pressure on rents. As a result, property valuations have decreased to levels last seen over five years ago.

HRP believes that demographic changes, together with economic recovery, will produce a substantial increase in demand for apartments over the ensuing twenty years.

Adding to the attractiveness of multifamily investment are the following demographic and supply-side attributes:

The development pipeline for new apartment product • is at an historical low pointUnlike other asset classes, GSE’s, banks and insurance • companies readily provide financing for the multifamily propertiesU.S. home ownership is decreasing to below historical • average (see Fig. 2)Renter pool projected to dramatically increase as Echo • Boomers and immigration fuels demand for rental housing

Asset and Property Management

Harbour’s asset management team has over eighteen years experience in real estate portfolio management for both individual and institutional partners. Investors in HRP Funds receive quarterly distributions, property level reporting, annually audited fund level financialsand access to property financials via private web-based accounts.

Furthering the institutional quality of Harbour’s real estate platform is our alliance with two of the country’s top third-party managers of multifamily properties, who will provide property management services for the majority of apartment communities in the portfolio.

Market Strategy

Competition for quality assets in the gateway marketsis dominated by the largest institutions in the industry, which drives prices up and returns down. HRP’s strategy is to target major secondary markets where strong economic drivers, including job and population growth, are present and projected to be positive. HRP targets primarily Class B to B plus assets, which are typically more resistant to competition from newer Class A apartment developments. HRP seeks to acquire assets in our target markets with better spread differentials between cap rates and debt, thereby enhancing cash flow.

Fig. 2

The combination of new household formations and the decrease in home ownership will dramatically increase the number of renter households over the next five+ years.

number of renter households over the next five+ years

0

137,500

275,000

412,500

550,000

687,500

825,000

962,500

1,100,000

2008 2009 2010 2011 2012 2013 2014 2015

home ownershiprate

additionalrenter households

ContactDavid Rottmandrottman@harbourrp.comTel. 805 962 0400 x 106

Harbour Realty Partners, LLC | 25 East Anapamu Street | Santa Barbara | California | 93101 | www.harbourrp.com

Patrick Beach, CEOMr. Beach has been involved in multiple real estate investment funds and offerings, both with institutional and individual investors over the past 25 years. Mr. Beach has sponsored twelve private and public real estate investment funds andpartnerships including the initial public offering of Captec Net Lease Realty, Inc. (formerly NASDAQ: CRRR). As Chairman of the Board of Directors and Chief Executive Officer of Captec Financial Group, Inc., he led the company in the acquisition and/or development of over 7,100 multifamily units, and oversaw the origination and servicing of over $2.5 billion in net lease real estate acquisitions and specialty mortgage loan originations.

Joanna Zabriskie, CIOMs. Zabriskie has over twenty years experience in underwriting and asset management in the real estate industry. For the past seven years, she has acquired and managed a $750 million portfolio of multifamily assets throughout the United States and developed an institutional-quality investor relations platform. Ms. Zabriskie manages the underwriting, financing, disposition and investor relations for HRP.

Timothy Young, Managing DirectorMr. Young brings nearly thirty years of investment experience to Harbour. During his career he has acquired, developed, financed and sold approximately $3.5 billion in commercial real estate assets in the U.S. and international markets. Mr. Young oversees key institutional relationships and is involved with acquisitions, financing and dispositions for HRP.

David Rottman, DirectorMr. Rottman brings over a decade of real estate experience as both an investor and advisor. As former vice-president of a large real estate securities sponsor specializing in 1031 exchanges and other tax advantaged real estate strategies, he was responsible for equity allocation for wealth managers and their clients interested in real estate investments. Mr. Rottman possesses his FINRA 7, 22, 63 licenses. His principal duties include capital formation for the company’s acquisition activity as well as Investor Relations.