Strategies for Multi-Family Real Estate Capital Allocation

AIR COMMUNITIES The most efficient and most effective way to allocate capital to multi-family real estate 4 We employ a highly disciplined approach to capital allocation • • • Our weighted average cost of capital ("WACC") implicit in our internal GAV expressed as an unlevered IRR is ~6% A substantial spread to our WACC, generally ~200+ bps of IRR or more, is required for all investment activity Each transaction is recommended first by our Investment Committee, then decided by our independent directors Our Investment Committee - chaired by John McGrath - includes AIR's executive leadership team • External Growth Framework for assessing quality of target opportunities: Markets: Expected growth in local economies, submarket supply constraints, and predictable laws and regulations • Portfolio: Diversification across markets, type, and price point - Capital Enhancements Invest where the expected rent premium (relative to market) drives long-term value Long-term IRR minimum target of ~10% on average - Equates to low double digit NOI yields Rents: Relative to local market averages Operations: Ability to drive higher growth through the AIR Edge, especially when first added to our platform Acquisitions must be accretive to near-term FFO - Underwriting reflects deployment of the AIR Edge to ensure performance levels and returns are achieved We will use leverage only within our targeted range of ~5.0x to ~6.0x We aim to source capital from the broadest range, and develop a menu of low-cost options for AIR Debt • Bank debt: line of credit and term loans Corporate debt: private and public Secured debt Equity • Sale of lower rated properties Sale of JV interest(s) • Issuance of common shares / OP units 16

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