Item 5 Fees and Compensation
The Adviser and its affiliates that serve as general partners to the Advisory Clients are generally compensated for
advisory services through an asset-based management fee (the “Management Fee”) and acquisition fees (each, an
“Acquisition Fee”) for each asset acquisition (“Acquisition”), and the Adviser and its affiliates may receive
performance-based compensation in the form of an incentive allocation or carried interest (as described below).
The Management Fee payable by the Funds is generally based on a percentage (generally 2% per annum) of called
capital contributions. The Management Fee is typically payable quarterly in advance, commencing on the date on
which capital contributions are formally accepted into a Fund.
Upon the closing of each Acquisition, the Adviser (or its affiliates) will receive an Acquisition Fee currently
equal to 3% of the full purchase price of the asset (including the amounts of any debt assumed or borrowed in
connection with the Acquisition).
The Adviser and its affiliates may be eligible to receive a percentage of investment proceeds currently equal
to 25% of profits subject to payment of a Preferred Return and the return of all Capital Contributions (the
“Manager Promote” or “Carried Interest”).
Affiliates of the Adviser may serve as the construction management and development services for certain real estate
portfolio investments. Such affiliates will be entitled to receive compensation for such services pursuant to
construction management and development agreements with the Adviser or its affiliates, the “Construction
Management and Development Fees”). The construction management and development agreements will be on
terms and conditions that are commercially reasonable and substantially similar to those that would be available in
an arm’s length transaction. The Adviser will adhere to its fiduciary duties to its Advisory Clients when negotiating
any construction management and development agreements with its affiliates. The Adviser may also engage non-
affiliate third parties to provide construction management and development services.
Affiliates of the Adviser may manage chattel assets for certain real estate portfolio investments. The sale of these
chattel assets will be on terms and conditions that are commercially reasonable and substantially similar to those
that would be available in an arm’s length transaction. The Adviser will adhere to its fiduciary duties to its Advisory
Clients when negotiating any sale agreements with its affiliates and these sales will be fully disclosed in writing.
Under certain circumstances, the Management Fee, Manager Promote and other fees may be negotiated in the
sole discretion of the Adviser and its affiliates.
Refer to the Governing Documents for each Advisory Client for a complete understanding of how fees are paid to
the Adviser, and its affiliates. The information contained herein is a summary only and is qualified in its entirety
by such documents.
The Management Fee, Acquisition Fees, Manager Promote/Carried Interest and other applicable fees are
generally paid directly from the assets of the relevant Advisory Client.
An Advisory Client will typically be responsible for certain expenses, including, but not limited to, expenses
incurred in connection with the formation of that Advisory Client and admission of its investors, including,
without limitation, legal fees, registration fees and filing and recording charges, fund administration, fund audit
and other expenses reasonably incurred on behalf of the Advisory Client.
Each Advisory Client may create one or more entities to hold real estate portfolio investments. Such holding entities
may pay (and thus, the Advisory Client may indirectly pay) an affiliate of the Adviser or a non-affiliate third party
for property management services. The amounts of such fees may vary from investment to investment depending
on, among other things, the nature of the real estate property, but the Adviser expects that such property management
fees are not expected to exceed 8% (eight percent) of the monthly rental income of a particular holding entity. The
Adviser has an expectation to contract with M. Shapiro for the existing and future properties in the Fund portfolios
at a contracted rate between 4% (four percent) to 5% (five percent).
Refer to the relevant Governing Documents for each Advisory Client for a more detailed discussion of the
expenses borne by that Advisory Client and its investors. The information contained herein is a summary only
and is qualified in its entirety by such documents.
Management Fees paid by Advisory Clients are paid quarterly in advance. The Acquisition Fees are paid at the
closing of each acquisition. The Manager Promote/Carried Interest is typically paid when earned. The
Construction Management and Development fees are typically paid quarterly in arears.
Neither the Adviser, nor any of its supervised persons accepts compensation for the sale of securities or other
investment products.