Investor Presentaiton
41
Footnotes and Definitions
The returns, projected returns and operating metrics shown in the presentation were determined based on the following:
Annualized Quarterly Distributions - Cash distributions to investors during a quarter divided by the weighted average unreturned capital during the quarter, expressed as an annual rate.
Annualized Trailing 3-Month Net Cash return on Total Equity - The sum of property-level net cash flows for the prior three months divided by the weighted average equity invested (including Fund equity and operating partner
equity), expressed as an annual rate. This metric excludes management fees, fund-level expenses, and carried interest. Actual returns to limited partners were lower.
Acquisition to Sale Revenue Growth The difference between (a) the monthly average of trailing 3-month revenue as of the most recent reporting period prior to sale and (b) the monthly average of trailing 3-month revenue as of the
origination date for each investment, expressed as a percentage change.
Acquisition to Sale NOI Growth - The difference between (a) annualized trailing 3-month income as of the most recent reporting period prior to sale minus actual trailing expenses based on the prior 12 months or a shorter period
annualized if less than 12 months have passed since the origination of the investment and (b) net operating income as of the origination date of an investment calculated using trailing 3-month net operating income annualized and
trailing 12-month expenses adjusted for anticipated changes in real estate taxes and insurance expenses, expressed as a percentage change.
Average Hold Period - The difference between (a) the acquisition date and (b) the reporting date for an individual asset. Average portfolio hold period takes (a) individual asset hold periods multiplied by (b) the respective initial equity
investment at acquisition and divided by (c) the total equity investment for all assets included in the reported portfolio.
Cambridge Associates Benchmark - Real Estate Benchmark statistics are provided by Cambridge Associates at no cost and are "as is" as of March 31, 2021. Internal rates of return are net of fees, expenses and carried interest.
Cambridge Associates' research shows that most funds take at least six years to settle into their final ranking, and previous to this settling they typically rank in 2-3 other quartiles; therefore fund or benchmark performance metrics from
more recent vintage years may be less meaningful.
Debt Service Coverage Ration (DSCR) - Trailing NOI on a T3/T12 basis divided by debt service as defined by payments of principal (if applicable) and interest that would have been payable under a hypothetical loan assuming (i) a loan
balance equal to the aggregate loan balance of the portfolio, (ii) and an interest rate equal to 4.35%
Distributions (Quarterly) - Cash distributions to investors during a quarter divided by the weighted average unreturned capital outstanding during the quarter, expressed as an annual rate.
Distributions (Annual) - Cash distributions to investors during the reported period.
Equity Value Increase - The difference between (a) total Fund equity capital invested in transaction and (b) the current GAAP investment value plus any return of capital proceeds, expressed as a percentage change.
Investment Valuation Increase - The percentage increase from the initial cost basis of the Fund's investment to the sum of (a) the current value of the Fund's investment as of the reporting date and (b) returned capital.
Loan to Cost (LTC) - The total outstanding senior loan balance for an investment, divided by the total cost basis of that investment. Aggregated at the Fund level, the LTC is the average of the individual investments' LTC, weighted by
each investment's LEM Fund equity.
NOI Increase - The difference between (a) annualized trailing 3-month income minus actual trailing expenses based on the prior 12 months or a shorter period annualized if less than 12 months have passed since the origination of the
investment and (b) net operating income as of the origination date of an investment calculated using trailing 3-month net operating income annualized and trailing 12-month expenses adjusted for anticipated changes in real estate
taxes and insurance expenses, expressed as a percentage change.
Operating Yield - The sum of operating cashflows from the Fund's investments divided by the weighted average investment cost of the Fund's investments, expressed as an annual rate.
Preferred Return - 8% per annum, compounded annually.
Projected Average Cash-on-Cash Yield - The average of monthly cash-on-cash distribution for the projected hold period, calculated by averaging the percentages obtained by dividing the applicable month's distribution to the Fund
by the outstanding equity investment for the preceding month for all periods of a projected hold period.
Projected Investment-Level IRR and Projected Aggregate Investment-Level IRR - The projected internal rate of return on invested capital, without deduction for management fees, fund-level expenses or carried interest, calculated
using monthly cash flows based on actual contributions and distributions from the initial funding of the given investment (or aggregate investments) through the reporting date and projected contributions thereafter until the investment
(or aggregate investments) are fully realized. The projected contributions and distributions are based on the general partner's estimate of future net cash flow generated from the Fund's investments as of the reporting date.
Projected Net IRR to Limited Partners - The projected internal rate of return on invested capital since inception, net of management fees, fund-level expenses, and net carried interest, based on actual contributions and distributions
since inception of the applicable fund through the reporting date and projected contributions and distributions until the applicable fund is fully liquidated. For Funds I and II, Projected Net IRR to Limited Partners ignores management
fee rebates paid to limited partners. For Fund III, Projected Net IRR to Limited Partners incorporates management fee rebates paid to limited partners. GP and employee contributions and distributions are included in the calculation of
Projected Net IRR for Funds I and II but are disregarded for the Fund III calculation. The projected limited partners' contributions and distributions are based on the applicable general partner's estimate of future net cash flow generated
from the applicable fund's investments.
L.E.M
CAPITALView entire presentation