Page 4 - Prosper Investor Quarterly Report Academic Year 2021-2022 Quarter 2

Dear Investors,

Prosper on Fayette continues to successfully posture itself in a post-
pandemic lease up market. Below is a brief update on industry trends,
investment return and investment performance.

INDUSTRY TREND

Prosper on Fayette completed construction in August 2021, bringing an
additional 181 units/314 beds to the UMB student housing market. Outside
of Fayette Square and Pascault Row, Prosper on Fayette is the only
other purpose-built student property in the market. Currently, the average
occupancy for all competitors (9 properties totaling 1,829 units) in the
market is 76% with Prosper on Fayette being occupied at 59%. Overall, the
market continues to climb out of pandemic levels and looks to stabilize in
the Fall of 2022.

INVESTMENT RETURN

The Manager will continue to suspend cash distributions to the Members
until the property achieves at least 85% occupancy. Suspending cash
distributions helps to increase operational reserves. Once the property
exceeds the required occupancy, cash distributions to the partnership will
resume. The property is currently stable from a cash flow standpoint. The
Manager does not anticipate the need for a capital call. Additionally, the
less than projected occupancy prohibits the original plan to refinance this
Academic Year. Instead, the Manager will look to refinance the asset next
year upon a successful lease-up.

INVESTMENT PERFORMANCE

Prosper on Fayette is seeing strong interest from current residents to renew
their lease for the upcoming year. The management team is also seeing
new prospects from residents at Fayette Square, UMB’s on campus housing
option, placing Prosper 23% ahead YOY. Based on retention expectations as
well as market information from the 2021 lease up, occupancy is forecasted
to climb, reaching over 90% for the 2022-23 academic year. Prosper is
currently offering renewal incentives in the form of weekly prize giveaways.
The goal is to keep the pace and stay ahead of the fall projections by 15%
each week. The key is keeping the traffic up so that the team has enough
leads to get the property filled.

Thank you for your partnership.