For deal financials, please contact your licensed investment specialist. Please note: Per FINRA Rule 2210, we are no longer permitted to enclose IRR estimates, as of July 2020.

1. Value-Add Opportunity

The Sponsor intends to substantially renovate the property’s units at an average of $6.5K per unit and further upgrade exteriors and communal amenities. The Sponsor believes these renovations will allow the asset to compete both with higher rents at newer properties in the deal submarket as well as exit sale prices. The asset’s average post-renovation rent is projected to be $1,459 an increase of an average of $135 as of March 2021.

2. Experienced Local Sponsor

The Sponsor has a strong track record completing similar projects across the southwestern US, and this is our second deal with the Sponsor. While distributions for our first deal with the Sponsor (Hidden Chalet, Salt Lake City, UT) were withheld due to COVID-19, we are looking at a pending exit approximately 18 months ahead of schedule, with an early exit achieving the business plan projection yield of 11.85%.

3. Strong COVID Performance

The asset’s performance has been strong over the past year, with only minimal tenant concessions required during the pandemic, according to Sponsor. This success is largely due to the asset’s relative affordability, large floor plans, low-density layout, and central location among the Denver metro area’s primary employment hubs.

4. Supply-Constrained Market

There is a chronic shortage of both single-family housing and multifamily rental properties in Aurora, and with the average asking rent in Aurora is ~ 12% below the Denver–Aurora–Lakewood metro area average [1], the city continues to see significant in-migration and upwards rent price pressure.

[1] Source: CoStar, “Aurora-Denver Multifamily Submarket Report”

Denver

In 2020, U.S. News & World Report ranked Denver the #2 best place to live in the U.S., in terms of quality of life and employment prospects [1]. Additionally, the Wall Street Journal & Moody's Analytics ranked Denver the #3 labor market in the U.S., and multiple global corporations like Google, Oracle, and Charles Schwab have a significant physical presence and employee footprint in the city [2].

As a result, Denver has seen an influx of both population and investment in recent years, and from 2011 through 2019, rent growth in Denver has ranged from 2.1% to 9.5% [3]. While rent levels were relatively static from March 2020-March 2021, strong rent growth is expected through the remainder of 2021 and beyond as the city shakes off the effects of COVID-19 and continues on its course of sustained growth [4]. As a result, CBRE forecasts Denver’s rent growth to hover around 1.1% in 2021 before reaching 10.5% in 2022 and 2.9% in 2023, primarily due to a return to pre-pandemic employment levels, recent economic stimulus, and slower multifamily construction permitting.

Aurora

Aurora lies ~8 miles east of Denver and is the third largest city in Colorado. The city’s six largest private-sector employers are in healthcare and aerospace engineering industries, which were less adversely affected by the pandemic than many other industries. Additionally, Buckley Air Force Base, which is located in the area, employs approximately 12,000 workers and provides a solid backbone for local housing demand [5].

At ~$1,390/month, the average asking rent in Aurora is roughly 12% below the Denver–Aurora–Lakewood metro area average [5]. As a result, Aurora apartments have been a beneficiary of stronger suburban demand since COVID-19 struck Colorado, as more people shift to working from home and seek out more spacious housing options. Additionally, Aurora’s apartment vacancies have remained below the metro average during the pandemic due to limited supply constraints, in terms of both affordable houses and rental options.

The effects of COVID-19 and the U.S.’ favorable mortgage interest rates have further encouraged an influx of new homebuyers into Aurora, and the price increases triggered by this intra-state migratory shift is expected to hinder the bottom half of Aurora home seekers for years to come [6]. This continued demand for housing options has in turn bolstered local rent levels, and after Aurora’s annual rent growth turned slightly negative in Q2 2020 for the first time since 2010, annual gains have improved to 3.1% in Q1 2021, making Aurora one of the rent growth leaders in the Denver region [5].

[1] Source: U.S. News & World Report, “150 Best Places to Live in the U.S. in 2020-21”

[2] Source: The Wall Street Journal, “Austin, Nashville Rank at Top of Hottest U.S. Job Markets”

[3] Source: CBRE, “Q3 2020 Denver Apartment Outlook”

[4] Source: The Denver Post, "Denver Rent Increases Expected to Accelerate in the Months Ahead“

[5] Source: CoStar, “Aurora-Denver Multifamily Submarket Report”

[6] Source: Sentinel Colorado, "SOLD OUT: Home prices and buyer anxiety are through the roof in the Aurora region"

The iintoo investor entity is expected to hold a 51.7% stake in the special purpose entity that own the asset. Ownership of the asset is via a two-tiered designated SPV held by investors.

The principal of the Sponsor provides a personal undertaking of the obligations of the Sponsor under the JV agreement. iintoo will oversee and monitor the project until its completion and provide investors with quarterly progress reports. See Private Placement Memorandum for further details.

Starting at 18 months until 30 months from the project start date, the Sponsor is entitled to a buyout right that should amount to a cash sum that represents a return equal to the projected IRR of 15.42% plus 7% of iintoo’s capital contribution.

* When we refer to “Equity Protection” we are referring to an arrangement where iintoo epiic GP LLC, the general partner of each covered issuer (“Covered Issuer”), promises that, even in the event the underlying project is not profitable or records a loss, the investor in the Covered Issuer shall receive a specified amount equal to the original principal investment he/she/it provided (less other amounts already received by such individual investor during the course of the investment) subject, however, to significant limitations including but not limited to repayments for losses in the Covered Issuer are only made up to a maximum amount of funds available from the retention account and the policy (where such policy limit may be less than the total amount invested), repayments are on a first come, first serve basis, and losses are aggregated across Covered Issuers subject to the same retention account and policy. Iintoo epiic GP LLC, and not investors, is a party to the policy with Everest Insurance®. As a result, investors have no direct legal rights under the policy. In addition, beyond use of the Equity Protection proceeds from the retention account and the policy, neither iintoo epiic GP LLC nor the Covered Issuer has any obligations to indemnify investors for losses. For more information, please see “Business of the Company—Equity Protection” and “Risk Factors—Risks related to the Equity Protection” in any of our issuers’ private placement memoranda.

About iintoo

The above may contain forward-looking statements. Actual results and trends in the future may differ materially from those suggested or implied by any forward-looking statements in the above depending on a variety of factors. All written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the previous statements. Except for any obligations to disclose information as required by applicable laws, we undertake no obligation to update any information contained above or to publicly release the results of any revisions to any statements that may be made to reflect events or circumstances that occur, or that we become aware of, after the date of the publishing of the above.

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Insurance is provided to Iintoo epiic GP LLC (and placed through Cobbs Allen, a licensed insurance intermediary) by Everest Insurance®, subject to all of the terms and conditions of the applicable insurance policy, to support iintoo’s equity protection undertaking as further specified and described in the confidential offering materials of iintoo. Everest Insurance® is not a sponsor or promoter of any offering described herein.

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Everest Re Group, Ltd. is a Bermuda holding company that operates through the following subsidiaries: Everest Reinsurance Company provides reinsurance to property and casualty insurers in both the U.S. and international markets. Everest Reinsurance (Bermuda), Ltd., including through its branch in the United Kingdom, provides reinsurance and insurance to worldwide property and casualty markets and reinsurance to life insurers. Everest Reinsurance Company (Ireland), provides reinsurance to non-life insurers in Europe. Everest Insurance® refers to the primary insurance operations of Everest Re Group, Ltd., and its affiliated companies which offer property, casualty and specialty lines insurance on both an admitted and non-admitted basis in the U.S. and internationally. The Company also operates within the Lloyd's insurance market through Syndicate 2786. In addition, through Mt. Logan Re, Ltd., the Company manages segregated accounts, capitalized by the Company and third party investors that provide reinsurance for property catastrophe risks. Additional information on Everest Re Group companies can be found at the Group’s web site at www.everestre.com