HREV SPONSOR CAPITAL FUND II

Investment Opportunity

Halpern Real Estate Ventures is pleased to present the opportunity to invest in a $100M Sponsor Capital Fund primarily focused on value creation/opportunistic equity investments in Qualified Opportunity Zones, and recognize highly tax efficient value through land appreciation, project execution, and income growth.

Investment Strategy

Geography: Major metropolitan centers and urban lifestyles cores in the Northeast, and other high growth markets

Asset Profile: Ground up or adaptive reuse development

Hold Term: 10 Years+ Horizon. HREV will continuously evaluate for a sale leading to outsized returns during the life of the fund

Target Returns: Substantially after-tax returns in excess of 14% IRR

What is an Opportunity Fund, and why invest?

As a part of the Tax Cuts and Jobs Act of 2017, an Opportunity Fund was created as a new yet little-known investment vehicle that encourages and incentivizes investment in real estate and businesses located in targeted communities. These targeted communities are also known as Opportunity Zones, which are census tracts designated by state and federal governments targeted for economic development. As an investor, benefits are at least threefold: deferring federal taxes on any recent capital gains until December 31, 2026, reducing that tax payment by up to 15%, and paying as little as zero taxes on potential profits on gains invested into an Opportunity Fund if the investment is held for 10 years. This provision in the $1.5 trillion tax cut is projected to save investors $1.6 billion in capital gains taxes over the next 10 years.

Investment Drivers

In evaluating the Opportunity Fund, we have found that this investment actualizes advantages in the areas of accessibility, appreciation, value creation, driving additional demand, barriers to entry, and tax efficiency.

Accessibility: Provides tax deferral and abatement to both real estate and non-real estate investors alike, qualifying trillions of dollars in capital gains for potential investment.

Appreciation: Funds with first mover advantage will recognize appreciation resulting from the estimated tens of billions of dollars of capital to be deployed by investors seeking to eliminate or significantly reduce capital gains.

Value Creation: Participation is limited to development platforms that can execute on ground up development and heavy repositioning, generating opportunistic returns through stabilization

Driving Additional Demand: Real Estate and businesses that form within or relocate to Opportunity Zones will realize significant tax savings upon the exit or sale of the company and will likely select space in Opportunity Zones over other locations

Barriers to Entry: Program creates scarcity as zones are tightly defined and is only available to platforms with both complex execution capability and solid compliance experience

Tax Efficient: Investors defer current gains and potentially pay zero taxes on the exit from the Fund investment

Halpern Real Estate Ventures

Halpern Real Estate is constructed on a foundation of knowledge and experience, especially in the arena of Opportunity Zones, leadership in real estate portfolio management, development of ground up projects in various different stages, and private and public market interactions on the large scale. Those credentials in tandem with our methodology and our recent exposure to a multitude of lucrative investments warrants the launch of this compelling Opportunity Fund.

Tenure: Halpern Real Estate Ventures senior team has successfully managed billions of dollars in institutional and high net worth capital, coupled with over three decades of development experience, in areas similar to or currently designated as Opportunity Zones.

Track Record: Recently executed on 12 successful investments across neighborhoods similar to Qualified Opportunity Zones.

Leadership: Principals with over 30 years individual experience, successfully managing portfolios through multiple real estate cycles and capitalizing on recoveries.

Capabilities: HREV has sponsored multiple ground up developments, representing over $800 million of costs, including mixed-use and residential projects which are recently completed or currently in development.

Governance: Private and public market experience as large-scale owners, operators, developers, and fiduciaries of real estate in the US and internationally.

Methodology: Conservative underwriting approach emphasizes returns based on today’s markets values and fundamentals – not financial engineering.