Why the RealtyMogul Apartment Growth REIT is Well Positioned in this Macro Environment

Dear Investor-

Forward-thinking investors deserve smart alternatives outside the volatility of the stock market and public exchanges in this challenging macro environment. Investing in real estate may provide a solution. ¹

On the RealtyMogul Platform, members can evaluate a broad range of investment options, including Real Estate Investment Trusts (REITs).

By way of disclosure, we have an advertising relationship with RealtyMogul, meaning we get paid for making this introduction and sharing this content. As always with these types of deals, consider this an introduction and not a recommendation. Every deal is unique and the responsibility to vet any and every deal you invest in still lies with you. This opportunity is available to accredited investors only.

The RealtyMogul Apartment Growth REIT seeks to provide long-term capital appreciation and pay stable cash distributions to investors. With prior market conditions, the REIT primarily invested in JV equity multifamily investment opportunities; however, the current macroeconomic environment is presenting compelling preferred equity opportunities as well. While demand for multifamily housing continues to be strong, senior lenders have cut back on the leverage they will provide in this elevated interest rate environment. This dynamic has created a need from sponsors for preferred equity to solve the capital requirements and target return metrics for their equity investments.

How the RealtyMogul Apartment Growth REIT Is Looking to Take Advantage of this Market Dynamic

• Long Standing Relationships with Sponsors: To date, RM Adviser, the manager of RealtyMogul's two REITs, has partnered with over 30 experienced real estate companies to facilitate transactions valued at over $1.0 billion across multifamily, retail, self-storage, office, industrial, and mixed-use. ² The volatility of the debt markets has led to a higher demand for many sponsors who are looking to close quickly and with certainty. In these uncertain times, having a trusted partner with the knowledge and means to execute is key.
• Cash Available to be Deployed: In the current economic environment, many institutional capital sources have pulled back. RealtyMogul Apartment Growth REIT currently has cash ready to be deployed, which is a huge driver for sponsors to want to work with the REIT.

Putting this Strategy into Action:

RM Adviser recently added a compelling preferred equity investment to the Apartment Growth REIT for its investors. Restoration on Candlewood is a 328-unit, Class B apartment community in Oklahoma City, OK, and this investment is a great example that even in a challenging macroeconomic environment, deals can be found that make sense across geographies, partners, and deal structures.

Preferred equity sits between debt and common equity in the capital stack. Preferred equity holders typically require a lower return than common equity holders, but in return, have priority over common equity for distributions, which mitigates the risk on the preferred equity investment. Upon a capital event such as a refinance or sale, the preferred equity investment must be paid off in full, including accrued interest, before the common equity investors receive any distributions. As a result, the basis on a preferred equity investment is lower than the basis on a common equity investment.

In the case of Restoration on Candlewood, because of a preexisting relationship with the real estate sponsor and the REIT's ability to transact on a shorter timeline, the Apartment Growth REIT secured what they believe to be a strong risk-adjusted return of a 15.5% preferred return for its investment.³ Preferred equity typically targets a range of 10% to 15% returns. Restoration on Candlewood is offering a risk-adjusted return typically only seen at the higher risk common equity level.⁴ Additionally, upon refinance or sale, Apartment Growth REIT has priority of all distribution proceeds until it receives its principal and accrued interest.

At $82,000/unit, the REIT's basis is over $12,000/unit below any of the property's sales comparables, which also provides downside protection.

Discover why over 3,500 investors are invested in RealtyMogul's Apartment Growth REIT and learn how to invest in real estate on the RealtyMogul Platform.

Get to know RealtyMogul today!

Have a great day!

Jim and Brett

James M. Dahle, MD, FACEP
Founder, The White Coat Investor

Brett Stevens, MBA
COO, The White Coat Investor

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¹ This information should not be used as a basis for an investor's decision to invest. Investment opportunities on the RealtyMogul Platform are speculative and involve substantial risk. Real Estate investments are inherently illiquid and are generally considered a long-term investment strategy. Past performance is not indicative of future results. Nothing in this email should be regarded as investment advice. Please carefully review all Defined Terms and the additional Disclosures on the RealtyMogul website. All information and any calculations used herein is based on information from inception through May 2023.

² RealtyMogul's two REITs are RealtyMogul Income REIT, LLC ("Income REIT") and RealtyMogul Apartment Growth REIT, Inc. ("Growth REIT"). The aggregate value of properties owned by or underlying loans and other investments made by Income REIT is based on the most recent internal valuations as of the end of the fiscal quarter upon which Income REIT's most recently announced NAV per share is based pursuant to Income REIT's valuation policies provided, however, the value of properties underlying.

³ The preferred return is not required to be paid current; interest accrues on a monthly basis and is cumulative and compounding to the extent unpaid. All accrued interest must be paid in full before the common equity receives a distribution.

⁴ https://fnrpusa.com/blog/what-is-preferred-equity/

Disclaimers:

This message is for informational purposes only and should not be regarded as a recommendation, an offer to sell, or a solicitation of an offer to buy any security. Any investment information contained herein has been secured from sources RealtyMogul believes are reliable, but we make no representations or warranties as to the accuracy of such information and accept no liability therefor. No part of this email is intended to be binding on RealtyMogul or to supersede any issuer offering materials.

Investing in the REIT's common shares is speculative and involves substantial risks. The payment of distributions is not guaranteed and may fluctuate. Review the "Risk Factors" section of the REIT's offering circular for a discussion of risks that should be considered before you invest. You should not invest unless you can sustain the risk of total loss of capital. Past performance is not necessarily indicative of future results. For additional information on risks and disclosures visit https://www.realtymogul.com/investment-disclosure.

RealtyMogul is not a registered broker-dealer, investment adviser or crowdfunding portal. We recommend that you consult with a financial advisor, attorney, accountant, and any other professional that can help you to understand and assess the risks associated with any investment opportunity.

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