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. Louisville Single Family Rentals are in High Demand

Rental rates for single-family homes across the U.S. climbed to the highest level since September 2006, as a result of increased demand for more spacious and private housing options [1]. This is particularly true for cities like Louisville, which has a diverse economy and is one of the fastest growing cities in Kentucky. In fact, the city has been named as one of the top cities for renters by Forbes [2]. Louisville has large employers in manufacturing, shipping, logistics and finance. The portfolio properties are located near the university and the airport and primarily cater to blue-collar households with moderate annual income, who are seeking affordable yet spacious housing options. Given Louisville’s rising housing prices, many families can afford to rent a single-family home but are unable to purchase a standard Louisville home.

2. Seasoned Sponsor with Proven Track Record

This is our fourth deal with the Sponsor. iintoo’s first deal with the Sponsor, Maplewood Apartments, is operationally similar to the SFR portfolio in the sense that it is not a centralized apartment complex, however, the dispersion is on smaller scale. Located just 10-blocks away within the Newburg submarket, Maplewood Apartments value-add multifamily complex has been performing well, has received a higher than projected valuation and is being prepared for sale earlier than expected given strong market dynamics [2].

3. Strong Institutional Interest in SFR

With COVID-19 supercharging demand for single-family rentals across the U.S., the SFR market has experienced a flurry of institutional investment activity. Institutional investment in the U.S. SFR sector reached $4.7 billion in 2020 and institutional demand for this property class is expected to remain strong for the foreseeable future [3]. This presents a viable opportunity to increase post-rehabilitation rental rates for assets like the ones in our portfolio , particularly as the competitive landscape becomes more heavily capitalized by large institutions willing to bid down cap rates in the coming years [4].

[1] “U.S. Single Family Home Rents Hit 14-Year High as Costs Surge,” Bloomberg, May 18, 2021

[2]“Best Cities For Renters 2021,” Forbes, March 2, 2021

[3] “U.S. Housing Market Is Nearly 4 Million Homes Short of Buyer Demand,” WSJ, April 15, 2021

[4] “Single-Family Rental Housing’s Phenomenal Year,” CBRE Investor Hub, December 22. 2020

Single Family Home Rentals

The U.S. single-Family Rental (SFR) market has traditionally fared well during periods of decreasing housing affordability, and grew significantly during and after the 2008 Recession. With COVID-19 causing economic distress across and reshaping living and rental presences across the world, the SFR market performance has once again exhibited strong performance.

5.6 million single-family homes were sold last year in the U.S., which was more than at any time since the housing bubble. Additionally, the nationalmedian existing-home sales price rose 16.2% on a year-over-year basis to $319,200 — a record high since 1989, according to the National Association of Realtors (NAR) [5]. The NAR expects average housing prices to go up another 9% in 2021, which is a significant increase relative to the typical 3-5% annual price growth in past years, and far faster than most households’ income growth rate [6].

As a result, the pandemic supercharged growth in the single-family rental (SFR) market. This market vertical is primarily driven by three factors: rising demand for homes, declining homeownership rates due to unattainable house prices, and more households looking for larger alternatives to urban apartments [7]. With the economic disruptions brought about by COVID-19 creating tailwinds for all three trends, rental rates for single-family homes in the U.S. climbed to the highest level since September 2006 as the pandemic pushes Americans to seek out more space.1 This strong pandemic–related shift is primarily fueled by economy shifts to flexible remote work arrangements coupled with an affordability issue with homeownership in the US which has only been exacerbated over the last twelve months [3].

This increase in SFR demand has in turn triggered increased interest from institutional capital and a boom in development, according to research from Trepp [7]. In 2020, institutional investment in the SFR sector weighted in at an extraordinary $4.7 billion in equity investments in operating SFR companies and joint ventures with significant SFR operations. Much of this capital was allocated to programs of acquiring, renovating, and leasing existing single-family homes in noncontiguous, or "scattered” locations like the ones in our deal portfolio [1]. With institutional interest in SFRs expected to continue growing and the U.S. housing market still 3.8 million single-family homes short of what is needed to meet national housing demand, we believe SFRs will remain one of the most compelling real estate investment options for the foreseeable future [4].

Louisville, KY

Nicknamed the “Gateway to the South,” Louisville boasts a low cost of living and a dynamic economy underpinned by a diverse range of sectors such as manufacturing, high tech, and transportation, and shipping. A large number of Fortune 500 corporations have chosen the city as their base, including Humana Inc., Papa John’s, the United Postal Service, and Ford Motor Company. Three of the city’s top six private employers are healthcare-related and the city is increasingly home to a number of fast-growing startups, including PharmaCord, which plans to invest nearly $57 million into a new operations and call center in the area.***

In addition to being the largest city in Kentucky, Louisville is also one of the fastest growing cities in the state, according to the Kentucky League of Cities [8]. 26% of the population in Louisville is between the ages of 20 and 39, which is an optimistic sign for investors targeting the millennial renter market [9]. Given Louisville’s population composition as well as its affordability, accessibility to nature, and active economy, the city has been named one of the top cities for renters by Forbes [2]. This is especially true for single-family homes, given that Louisville renters are increasingly upsizing to bigger homes with more space as households spend more time at home.

According to data from CoStar, the Louisville housing market was fairly resilient in the face of the 2008 Recession, with rent price indexes and occupancy trends remaining relatively steady. However, despite the fact that Louisville’s economy underwent significant growth in the years following the recession, there continue to be substantial disparities in unemployment rates in the region. These economic inequalities have grown even more as a result of COVID-19, and as a result the need for more cost-accessible housing options such as our current assets has never been higher.

[5] “Virtually Every Metro Area Experienced Home Prices Rise in First Quarter of 2021,” National Association of Realtors, May 11, 2021

[6] “Pending Home Sales Grow 1.9% in March,” National Association of Realtors, April 29, 2021

[7] “Rapidly Growing & Recession-Resistant: Interest Spikes for the Single-Family Rental Market,” Trepp, April 22, 2021

[8] “Kentucky Cities Continue Population Growth,” Kentucky League of Cities, June 4, 2020

[9] “What's Attracting Investors to Louisville's Real Estate Market in 2021?,” Roofstock, January 6, 2021

* 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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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