Griffis Residential Investment Advisor

Item 5. Fees and Compensation

The Advisory Affiliates are generally compensated for advisory services through an asset-based
management fee (the “Management Fee”) and the Affiliated Managers may receive performance-based
compensation in the form of an incentive allocation or carried interest (as described below).

Refer to the Governing Documents for each Advisory Client for a complete understanding of how fees are
paid to the Affiliated Managers, the Advisory Affiliates and other GRIA affiliates. The information
contained herein is a summary only and is qualified in its entirety by such documents.

Payment
Management Fees are typically paid quarterly in advance. The Advisory Affiliates have the right, but not
the obligation, to rebate or refund any such Management Fees to Advisory Clients. The Carried Interest
(as defined below) is typically paid when earned and realized.

Funds
Typically, Advisory Clients are charged a management fee paid to the Advisory Affiliates based on a
percentage of: (i) committed capital; (ii) invested capital; or (iii) investor capital account balances, as
applicable and set forth in the relevant Governing Documents. The Management Fee is payable either
monthly or quarterly in advance or in arrears on a pro-rata basis. All or part of the Management Fee may
be reduced or deferred at the discretion of the Advisory Affiliates, as applicable.

The fee structure for closed-end funds may vary from fund-to-fund and current or prospective Investors
should refer to the Governing Documents of the applicable Advisory Client for the fees paid by such
Advisory Client. A typical fee structure for closed-end Funds includes an annual 1.5% asset management
fee on the amount of committed capital during the commitment period, a 1.5% asset management fee on

the invested equity after the commitment period as well as a 2.0% pro-rata acquisition fee and a 1.0% pro-
rata disposition fee. The fee structure for GRIT (an open-end Fund) ranges from 0.65% to 1.10% of an
investor’s capital account balance. Fees charged to JV Entities vary based on the terms negotiated between
GRIA and its counterpart.

For closed end Funds, the Affiliated Managers are eligible to receive a percentage of investment proceeds
subject to payment of a Preferred Return and the return of Capital Contributions, typically, 20% of profits
(the “Carried Interest”). For GRIT, the Affiliated Managers are eligible to receive an Incentive Allocation
for outperformance relative to an industry index, as detailed in GRIT’s Governing Documents.

The Management Fee, Carried Interest, and other applicable fees are generally paid directly from the assets
of the relevant Advisory Client. On occasion GRIA (or its affiliates) may call capital from Investors to pay
certain expenses, including fees, payable by the Advisory Client.

The Management Fee and Carried Interest, as well as Acquisition Fees as discussed below, are subject to
waiver or reduction by the applicable general partner with respect to some or all of an Advisory Client’s
investors in the Advisory Affiliates’ sole discretion.

Other Fees
GRIA or its affiliates may receive acquisition fees, property management fees, construction management
fees, disposition fees, or similar fees separately agreed in the Governing Documents for each Advisory
Client.

       Acquisition Fees. Upon the closing of any Portfolio Investment, the Advisory Affiliates may be
        entitled to receive from certain Funds an acquisition fee (“Acquisition Fee”) in an amount up to 2%
        of a Fund’s pro-rata share of the full purchase price of any Portfolio Investment acquired (including
        the amount of any debt assumed or borrowed in connection with an acquisition).
       Property Management Fees. If an affiliate of GRIA is appointed as a property manager for any
        Portfolio Investment acquired by the Funds, the affiliate will be entitled to a property management
        fee (“Property Management Fee”) equal to a percentage (typically 3%) of collected revenue,
        payable monthly in arrears. Property Management Fees typically cover a broad range of property-
        related services, including but not limited to, advertising and leasing units to tenants; preparation
        of property operating budgets for approval by the applicable owners; rent and security deposit
        collection and related matters; enforcement of tenant lease terms; various administrative services
        relating to property management such as purchasing necessary supplies, making provision for
        supply of utilities and retention of relevant service providers such as janitors and pest
        exterminators; making, or causing to be made, through contracted services or in-house personnel
        employed by the properties or GRIA or an affiliate thereof, ordinary repairs and alterations; and
        hiring, discharging and supervising all contracted or in-house personnel employed by the properties
        or GRIA or an affiliate thereof required for the operation and maintenance of properties and to pay
        such labor and employees, provided that all costs and expenses incurred in connection with the
        employment of the foregoing persons (including without limitation salary, wages, medical,
        workmen's compensation, disability, or life insurance, placement fees, retirement, pension or profit
        sharing plan contributions, Federal, State, or local taxes, Social Security and other benefits) are
        chargeable to the applicable properties via reimbursement. In situations where one or more in-
        house personnel provided services that benefit personnel of GRIA and/or its affiliates, on the one
        hand and personnel of one or more properties, on the other hand (such as employee benefit
        administration services), the entire overhead costs associated with retaining such personnel
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Item 7. Types of Clients

As stated above in Item 4, the Advisory Affiliates provide investment advisory services to pooled
investment vehicles operating as private investment funds (i.e., the Funds), certain special purpose entities
(i.e., the JV Entities) and other alternative investment vehicles.

Interests in Funds are sold only to Investors who meet qualification requirements under applicable laws.
Generally, Investors must be “accredited investors” as defined in Rule 501 promulgated under Regulation
D of the Securities Act of 1933, as amended, and “qualified purchasers” as defined in Section 2(a)(51) of
the Investment Company Act of 1940, as amended, and Rule 2a51-1 promulgated thereunder or otherwise
“qualified clients” as defined in Rule 205-3 promulgated under the Advisers Act.

The minimum capital commitment of an Investor in a Fund generally ranges from $50,000 to $20,000,000,
although lesser commitment amounts may be accepted in the discretion of GRIA or their affiliates. Third
parties in the JV Entities may be subject to minimum capital commitments, at the discretion of GRIA or its
affiliates.