capital preservation is a prime directive.

To achieve capital preservation, Allagash employs Risk Management

throughout the investment process.

risk management methodologies

SFM FoCUS:

Affordable Small-Format Multifamily resilience provides intrinsic risk-control

Affordable Small-Format Multifamily rental properties have historically displayed significant market resilience. Driven by the inelastic nature of demand for these properties, housing for low-/moderate-income tenants, of which SFM represents the largest share, was the best performing real estate sector during the recent stress-test environments provided by the Great Financial Crisis and the COVID pandemic. According to CBRE Economic Advisors, the value and gross rental income of these properties dropped less and rebounded more quickly than any other residential sector.

Portfolio diversification: The Highly dispersed and granular nature of Affordable SFM also serves to mitigate risk

Allagash projects that the Fund's Affordable SFM portfolio will include a significant number of assets in multiple markets. The long-term goal of the portfolio is to reach over 10,000 units in over 500 properties in at least 10 markets. SFM's geographically dispersed and highly granular nature should significantly aid the portfolio in reaching those goals, subject to the total amount of capital raised by Allagash for the Affordable SFM strategy.

rigorous Due Diligence & expectation Management:

Initial research and subsequent surveillance can help prepare for even unexpected outcomes

Allagash visits each market multiple times in advance of any purchases being made. Then, based upon the return drivers and the key performance indicators ("KPIs") that Allagash has identified for the Affordable SFM market, Allagash monitors each market and investment to determine how to best construct the portfolio to achieve Allagash's dual objectives, including how to try to minimize the risk of the investments.

Stringent direction:

Allagash sets strict operational guidelines and follows up with close oversight for both construction contractors and property managers

Allagash has created Operation Manuals for both Construction and Property Management in order to ensure that the process both offers the best opportunity for success and is repeatable across markets and over time.

active portfolio culling:

Both underperforming and over=priced properties in the portfolio will become subject to sale

Despite the goal of creating a long term portfolio, subject to the performance of any property with regard to the KPIs and the input from both Construction Management and Portfolio Management teams,  each property is regularly evaluated to see whether it should be sold to reduce downside risk for underperforming assets to better reallocate capital for highly outperforming assets.

SIgnificant Projected

annual Distributions:

income distributions throughout the term of investment should serve to reduce the risk of principal loss

Given that average annual distributions are projected to be over 9%, investors are projected to receive about half of invested capital throughout the life of the Fund, thereby dramatically reducing downside risk of the investment over time.

Impact Through Data: Allagash's Investment Results

Occupancy Rate Improvement

98%

Allagash Portfolio, 2023

Average Rent Growth

7.5% annually

Secondary Metro Markets

Tenant Retention Rate

85%

Managed Properties, 2023

Renovation ROI

120%

Post-Renovation Asset Performance