A Path to the U.S. Real Estate Market

The Rhodium SPV Fund has been structured as a special purpose vehicle for the sole purpose of investing in Rhodium Multi-Family II, LLC (“Rhodium Fund”)

Rhodium Fund intends to acquire income producing residential rental apartment buildings in the U.S., with a focus on top performing secondary and tertiary markets
Target properties with favorable risk adjusted returns and measurable downside risk, located in strong growth markets with limited rental apartment supply
Properties will typically have a purchase price in excess of $10 million and will be located in areas which Rhodium Fund believes to have strong long-term demand and positive and upward trending economic conditions
The proceeds of this Offering will be used to purchase the properties, fund capital expenditure reserves, renovate where appropriate, and pay for closing costs and related expenses
Affiliates of the Rhodium Fund Manager will co-invest 20% of the required equity alongside 80% from Rhodium Fund

Features

Offering Size: USD 100,000,000
Minimum Subscription: USD: 250,000
Investment Term: Investors will have the option to transfer ownership of their units beginning year one
Projected Annual Investment Return: 12%
- 7% Preferred Annual Return paid annually, plus 5% Accrued Annual Return, paid upon maturity
- 100% of annual cash flow paid to investors in years 1 through 4 until they receive the 7% Preferred Annual Return; then cash flow and sales will be distributed in the following manner: 75% (investor) 25% (management)
- 100% of sales and refinancing gains paid to investors beginning year 5 through liquidation until investors receive 12% annual return, net of fees, plus 100% of invested capital
- Rhodium Management Co-Investment: 20% of the equity invested in each property, up to an aggregate investment of $25 million
- The Rhodium equity investment of $25 million is subordinate to the Rhodium SPV investment

Features

Offering Size: USD 100,000,000
Minimum Subscription: USD: 250,000
Investment Term: Investors will have the option to transfer ownership of their units beginning year one
Projected Annual Investment Return: 12%
- 7% Preferred Annual Return paid annually, plus 5% Accrued Annual Return, paid upon maturity
- 100% of annual cash flow paid to investors in years 1 through 4 until they receive the 7% Preferred Annual Return; then cash flow and sales will be distributed in the following manner: 75% (investor) 25% (management)
- 100% of sales and refinancing gains paid to investors beginning year 5 through liquidation until investors receive 12% annual return, net of fees, plus 100% of invested capital
- Rhodium Management Co-Investment: 20% of the equity invested in each property, up to an aggregate investment of $25 million
- The Rhodium equity investment of $25 million is subordinate to the Rhodium SPV investment

Investment Considerations

Rhodium Management

Strong alignment of interest with investors; Rhodium Fund affiliates to Co-Invest
Unique investment opportunity with enhanced investor protection
Strong demand for multifamily rental housing; Low correlation with economy and stock market
Disciplined and focused investment strategy; Investment properties are income producing

Transparent and ongoing portfolio monitoring
Dedicated investment team with proven track record
Strong and quality deal flow generated by deep relationships in real estate industry

The U.S. Multifamily Housing Market

Multifamily rental housing is a common form of housing in the U.S., with most of these assets renter-occupied. The multifamily sector includes 14.5 million units across the 62 largest metro markets in the U.S. (population > 1 million)

Over the past 25 years, multifamily investment has had the highest average returns of any commercial real estate asset class
The 9.8% average annual return is slightly ahead of industrial, and more than 100 basis points greater than office
Multifamily can be considered a “defensive play"
Multifamily had the second highest risk-adjusted return (measured by Sharpe Ratio). Using standard deviation as a measure of volatility over the 25-year period, retail and multifamily had the lowest levels of volatility in return performance

Nationally, the homeownership rate descended to a 51-year low of 62.9 percent in 2016 and is projected to remain in the low-60 percent band in the next years
Growing “Millennials” population with high propensity to rent. For the large U.S. millennial population (currently ages 20 to 35) renting is the most common form of housing. There are 71 million in this generation
Millennials are delaying marriage and starting families—traditionally, trigger points for buying a home. The average age of first marriage in the U.S. has risen to 29.5 years for men and 27.4 for women, both up two years from a decade ago. For the first time in history, the birthrate for women aged 30 to 34 was higher than the rate for women aged 25 to 29
Millennials are drowning in debt. Americans owe more than $1.4 trillion in student loans and the majority of that debt belongs to millennials, according to a survey of 1,000 Millennials by ORC International. While millennials are saving their money for retirement and their first home, debt makes it difficult for millennials to buy their first home right away

Source: CBRE Research, NCREIF, Yardi Matrix, US Census Bureau, Federal Student Aid

About Rhodium Fund

Rhodium Capital Advisors (“Rhodium”), a fully integrated real estate owner, operator, manager and developer throughout the entire U.S., is the sponsor of Rhodium Fund

Acquire and operate urban multi-family assets and suburban office assets in New York metropolitan area, and nationally, invest in suburban garden-style apartment communities in select markets
Rhodium has acquired over $1 billion of real estate and is currently holding nearly 100 portfolio properties and approximately 10,000 residential units in the U.S.
With new supply focused on luxury-grade housing and the bulk of the demand in workforce/affordable housing, Rhodium is positioned to capitalize on the under supply by focusing on income producing properties in top performing secondary and tertiary markets

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Disclaimer: Certain information set forth in this presentation contains “forward-looking information”, including “Projected Annual Investment Returns” and future oriented statements and financial information collectively referred to herein as forward-looking statements. Except for statements of historical fact, information contained herein constitutes forward-looking statements and includes, but is not limited to, the (i) projected financial performance of the Company; (ii) completion of, and the use of proceeds from, the sale of the units; (iii) the expected development of the Company’s business, projects and joint ventures; (iv) execution of the Company’s vision and growth strategy, (v) sources and availability of third-party financing for the Company’s projects. Forward-looking statements are provided to allow potential investors the opportunity to understand management’s beliefs and opinions in respect of the future.

These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which will cause actual performance and financial results in future periods to differ materially from any projections of future performance or result expressed or implied by such forward-looking statements.

Although forward-looking statements contained in this presentation are based upon what management of the Company believes are reasonable assumptions, there can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.

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