NBPC Student Housing Fund III

BRIGHAM YOUNG UNIVERSITY www.nbprivatecapital.com

The Student Housing

Fund III is intended to

target a tax sheltered

monthly income to

investors with modest

long term growth and

preservation of capital.

130 Vantis suite 160 Aliso Viejo, Ca 92656 • (877) 827-NBPC (6272)

INVESTMENT STRATEGYOur primary goal is to invest with the highest conviction in what we believe to be well located student housing properties in favorable market conditions. Secondly, we align ourselves with property operators having strong track records that will continue to have a long term focus on the property performance to attempt to achieve investor goals.

The majority of student housing assets in Fund III will include Class A core pedestrian, however; it will have the option to include investments in Class B or C properties that capture the more affordable rental rate market and have a potential upside after modest capital expenditures. On less frequent occasions up to 20 percent can be invested in development projects if it is within the Funds risk and return profile.

NB Private Capital believes the Fund can also largely benefit from short term financing with thirty to ninety day bridge loans on real estate acquisitions at a high interest rate.

STUDENT HOUSING BIG PICTURECollege enrollment has increased by approximately 6.4 million students during the last 20 years and is expected to continue to grow at an average annualized rate of 1.5% over the next 10 years. As the job market improves, younger people are continuing to seek out university education so they can improve their job prospects and earn a potentially higher income. Studies show students with college degrees make an average of $1,000,000 over their lifetime of work. Additionally, with a positive growth in the 14- to 17-year-old age group there is plenty of future potential college students. We believe this growth will continue to drive the need for new supply and help with the overall absorption rate of new units.

Location and proximity to campus and entertainment venues are key elements when looking for student property investments. Students like to be able to walk or bike to campus and they also enjoy the convenience of a dedicated shuttle bus route. The Fund plans to focus on properties that fit these criteria especially if they can be acquired at what we feel is a fair price.

Much of the newer product coming online is being built closer to campus and is replacing older, obsolete product, such as houses or run-down apartments. In many cases, the new product isn’t necessarily adding as much new supply as it is replacing the existing units. NB Private Capital will continue to research market conditions to evaluate how to maintain the property’s competitiveness.

U . S . C O L L E G E E N R O L L M E N T

P O P U L AT I O N G R O W T H

24

22

20

18

16

14Po

pu

lati

on

(in

mill

ion

s)

1990 2000 2010 2020 2030

$3,648,000

$3,252,000

$2,671,000

$2,268,000

$1,727,000

$1,547,000

$1,304,000

$973,000

Less than High

School

High School

Diploma

Some College/

No Degree

Associate’s Degree

Bachelor’s Degree

Master’s Degree

Doctoral Degree

Professional Degree

M E D I A N L I F E T I M E E A R N I N G S * B Y H I G H E S T E D U C A T I O N A L A T T A I N M E N T 2 0 0 9 D O L L A R S

*Source: The College Payoff

· College enrollment over the past few decades shows almost no correlation to the economy.

· Student enrollment expected to grow 13% over the next 10 years*

*Source: National Center for Education Statistics

TARGETED BENEFITS• Monthly income with an annualized

cash-on-cash of 6.5 percent

• Long-Term appreciation potential

• Tax Efficiency thru depreciation

• Diversification by university and regional submarket: 20+ properties, 10+ states

• Direct investment in brick and mortar assets

• Historical track record of performance

• An asset class driven by the demand for a college education

• Minimum Investment $100,000

OPPORTUNITYFUND III OverviewNB Private Capital is a LLC designed to invest and hold ownership in past, present and future student housing properties. Fund III is a limited partnership with the intention of investing and maintaining ownership in future student housing properties, as well as certain assets of our predecessor, Nelson Brothers Professional Real Estate.

What is the short-term goal?Our objective is to potentially optimize the risk-adjusted return through greater diversification and the historical performance of the collective properties. Fund III is planned to have indirect ownership in properties owned by Fund II through an ownership stake in Fund II.

What is the Exit Strategy?The advantage of multi-property funds is the immediate diversification and how it can help mitigate the risk of an investment. The downside is that the exit can be complicated. However, we believe institutional and large private equity interest in student housing properties may present several exit options, though these are not guaranteed.

The targeted strategy of NB Private Capital / NBPC is to continue to grow the Fund, increase the share price each year to benefit the initial investors, and attract larger investors such as pension funds, insurance companies, etc as the Fund grows larger. If successful, the next goal is for the Fund to start acquiring and owning its own properties outright. By year four, the target strategy is to pursue options to either take the Fund public, sell investor interests to large institutions or sell most of the Fund to a publicly traded REIT with the goal of providing a full exit option to investors by year four or five of ownership with appreciation potential.

TARGETED BALANCE

n Stability

n Income

n Growth Tax Savings

n Low Correlation

R E A L E S TAT E I N C O M E A N D I N F L AT I O N * I N D E X E D , 19 9 5 =10 0H I S T O R I C A L Y I E L D C O M PA R I S O N *

2 0 0 8 – 2 017 A V E R A G E A N N U A L Y I E L D5.1%

4.0%

2.4%0.4%

COMMERCIAL REAL ESTATE

INVESTMENT- GRADE BONDS EQUITIES T-BILLS

Income derived from commercial real estate has exceeded that from other asset classes.

The majority of total return comes from income.

AN ALTERNATIVE SOURCE OF INCOME

Commercial real estate income has increased faster than inflation over the past 20+ years.

Growth in real estate income was driven by a number of factors, including market rent growth and rent escalation clauses.

Bonds generally have fixed coupons.

200

175

150

125

100

75

Real estate net operating income

U.S. CPI

‘95 ‘97 ‘99 ‘01 ‘03 ‘05 ‘07 ‘09 ‘11 ‘13 ‘15 ‘17

*Source: Blackstone BREIT brochure

STUDENT HOUSING Brigham Young University (Provo, UT)

►9&9 ►Park Plaza

Utah State University (Logan, UT) ►Factory

Dixie State University (St. George, UT) ►Avalon Apartments

Oregon University (Eugene, OR) ►Duck Flats ►Duck Lofts

University of Southern California (Los Angeles, CA)

► Tropicana Apartments ►Chateau Sera

Northern Arizona University (Flagstaff, AZ) ► The Commons at Sawmill

University of Colorado at Boulder (Boulder, CO) ► The Plaza on Broadway

Washington State University (Pullman, WA) ►Campus Commons

University of Idaho – BYU (Rexburg, ID) ► Tuscany Place

University of Mississippi (Oxford, MS) ►MollyBarr Trails ►MollyBarr Ridge

Notre Dame University (South Bend, ID) ►Darby Row

University of Cincinnati (Cincinnati, OH) ►CP Cincy

Purdue University (West Lafayette, ID) ►Grant Street Station

ASSISTED LIVING ►West Seneca

MAP OF LOCATIONS NB Private Capital currently manages nearly $470 million in student housing properties throughout the country. Through its predecessor, Nelson Brothers PRE, the Nelson Brothers Private Capital management team has gone full cycle on seven properties; averaging over 50% total return.

S T U D E N T H O U S I N G F U N D I I I

OFFERED ON AN ALL CASH BASIS

1 9 5 E A S T M C M I L L A N S T . C I N C I N N A T I , O H 4 5 2 1 9

1 2 1 U N I T S – 4 4 0 B E D S | U N I V E R S I T Y O F C I N C I N N A T I

WHY STUDENT HOUSING?

► Potential Diversification Away from the Markets:College enrollment has historically been on a steady incline, with almost no previous correlation to economic or real estate cycles

► Historical Stability of Universities Many of them have been around for centuries and are supported by billion dollar endowments, large alumni bases, state budgets, etc.

► Inherent Scarcity of Land Near Campus NBPC believes a majority of students prefer to live near campus and within walking distance. For century-old universities, there is only a finite number of space and suitable housing that can fit that demand. NBPC believes these types of properties coupled with growing enrollment can offer favorable economics where demand constantly outweighs supply, fostering consistently high cash flow and potential rental rate growth; even in a down economy.

► Favorable Lease Structure Most student leases are now full 12-month leases. So even if students go home for the summer, their parents are still paying rent. Also, most leases are by the bed (not by the unit). This allows us to charge more per unit while increasing flexibility for the students.

► Parental GuaranteesNBPC prefers to target more affluent students while requiring parental co-signers. With parents typically paying the rent each month, the credit quality of our tenant base are usually successful, home owning, fully employed, high credit rated parents.

► Need-Driven Demand As college enrollment has shown minimal correlation to the economy, certain markets such as South Bend, IN, Eugene, OR, Oxford, MS, etc, have very small populations. They are primarily college towns. For this reason, students who attend schools in these areas will need a place to live and preferably close to campus

► Revenue DiversificationSince parents co-sign and typically pay the rent for many of our properties, this means our core revenue source comes from diverse and spread out region; catering to parents from different cities/states, working in various industries, etc.

7 R E A S O N S T O C O N S I D E R I N V E S T I N G I N S T U D E N T H O U S I N G

BRIAN NELSON (Principal)

Mr. Nelson has extensive real estate experience and been directly involved in acquiring real estate projects valued at over $300 million. Additionally, he has a proven track record of identifying and syndicating properties that historically have proved a distinct competitive advantage of maintaining value from business and macro-economic cycles. Mr. Nelson worked as a product marketing manager for VERITAS and Symantec Software

(NASDAQ:SYMC) where he specialized in marketing strategy, business development and product positioning. He has a B.A. from UTU, an MBA from BYU and holds a series 7 and 63 registrations.

BLAKE W. WETTENGEL (Chief Executive

Officer)

TANYA MURO

(Chief Operating Officer)

RACHEL JACKSON

(Asset Manager of Investments)

JASON KJELLSON (VP of Sales)

► Manages $470M in real estate assets

► DST collective occupancy +95% for 2017-18 school year

► Redstone is the primary property manager on our existing portfolio (Redstone’s track record includes 16,000 beds nationwide with a 98% occupancy for the 2017-18 school year)

► 15 employees with a collective

experience of 20+ years

► Headquartered in Aliso Viejo, CA

The contents of this communication: (i) do not constitute an offer of securities or a solicitation of an offer to buy securities, (ii) offers can be made only by the confidential Private Placement Memorandum (the “PPM”) which is available upon request, (iii) do not and cannot replace the PPM and is qualified in its entirety by the PPM, and (iv) may not be relied upon in making an investment decision related to any investment offering by the issuing company, or any affiliate, or partner thereof (“NBPC”). All potential investors must read the PPM and no person may invest without acknowledging receipt and complete review of the PPM. With respect to the “targeted” goals and performance levels outlined herein, these do not constitute a promise of performance, nor is there any assurance that the investment objectives of any program will be attained. These “targeted” factors are based upon reasonable assumptions more fully outlined in the Offering Documents/ PPM. Consult the PPM for investment conditions, risk factors, minimum requirements, fees and expenses and other pertinent information with respect to any investment. These investment opportunities have not been registered under the Securities Act of 1933 and are being offered pursuant to an exemption therefrom and from applicable state securities laws. Past performance and statements regarding current occupancy and earnings are no guarantee of future results. All information is subject to change. You should always consult a tax professional prior to investing. Investment offerings and investment decisions may only be made on the basis of a confidential private placement memorandum issued by NBPC, or one of its partner/issuers. NBPC does not warrant the accuracy or completeness of the information contained herein. Thank you for your cooperation.

Securities offered through Emerson Equity LLC Member: FINRA/SIPC. Only available in states where Emerson Equity LLC is registered. Emerson Equity LLC and NBPC are not affiliated.

FundIIIBrchr_BD | 6-19-18

130 Vantis suite 160 Aliso Viejo, Ca 92656 • (877) 827-NBPC (6272)

PAUL PERKINS

(Chief Investment Officer)