Wealth & Finance May 2017

Wealth & Finance International 48 Investing in Real Estate merican Private Equity is an investor focused on creating significant real value through real physical improvements and renovations of properties, and the related marketing and corporate strategies, all of which result in significantly increased rent revenue, increased cash flow, and increased asset value and returns. Over the past approximately 40 years, the firm’s partners’ value-add properties have outperformed while maintaining low risk; and with consistency. American Private Equity’s principals, the top individuals in the world in each of their areas of multifamily real estate and private equity, consol- idated to begin working together as an integrated and proven team of the most proven US real estate asset managers and the most proven investors in US multifamily. Apartment properties in the US are consistently the most in-demand asset class for worldwide investors. It consistently outperforms: Over a 10, 20, and 30 year time period, $100 invested in real estate significantly outperforms the same $100 invested in either the S&P, Dow Jones, or NASDAQ. (Source: FTSE NAREIT U.S. Real Estate Index Returns, National Association of Real Estate Investment Trusts, S&P 500, Russell, Dow Jones, Nasdaq, FTSE NAREIT equity REIT index.) Additionally, in each of these periods, returns on private real estate investments were higher than for public REITS / publicly traded real estate, and had lower volatility, as measured by the National Council of Real Estate Investment Fiduciaries’ NCREIF National Property Index. Volatility was lowest in the apartment property asset class. In addition to the strong, recession-proof and crisis-proof stability that apartment properties offer, is the following core demographic strength: The age group of individuals age 1-20 currently living in the United States, is far larger than the group of individuals currently age 20-40. As the younger age group “ages into” renting age, replacing the current renting age population, they will comprise a far larger renting age de- mographic. (This only includes young individuals currently living in the U.S., and does not include immigration.) These young people are “the largest demographic wave of the century.” Additionally, they are already consuming at 500% of the level of their parents, age for age, and inflation adjusted. Superior Risk Profile Apartment Properties: Risk is spread out over hundreds of residents, with less than 1% impact if any of these tenants default. Leases are fluid and quickly replaced with a new resident in the normal course of business. In other real estate classes, there is one or a few tenant companies, and usually one large anchor tenant. If one of these tenants or tenant companies goes out of business or breaks a lease, there is a significant negative impact on that retail, office, or single family home property. Favorable Supply-Demand Imbalance Construction of new apartment properties has decreased by about two- thirds over the past three decades, due to an economic environment which made single family homes attractive. Even the highest projections for new construction do not meet even half of the new demand, according to the U.S. Census Bureau. This lack of substantial additional construction will add to the demo- graphic growth, in pushing rents upward and creating a highly favorable environment for this asset class. Owners vs. Renters The U.S. home ownership rate is expected to decline 6%-8% in the coming decade: Owners become Renters. Each 1% decrease in home ownership is 1.1 million new renter house- holds: there are 6.6 – 8.8 million new renter households expected by the U.S. Census bureau, over the next ten years. Additionally, 12.4 million new households will be formed in the next decade, increasing apartment demand. American Private Equity Group is a women-owned private real estate investment company which provides wealth preservation and superior risk adjusted returns in apartment properties. A 1704WF29