Investment strategy

Real estate remains a local business, and a successful real estate investment strategy requires the ability to identify and execute within local markets. We believe that the Partnership is well positioned to capitalize on current opportunities in the Central United States (which we define as South Dakota to Texas, and Utah to Tennessee) and adjacent markets. We have strong relationships in all areas of real estate expertise throughout the targeted investment area. We will leverage these relationships to conservatively underwrite investments in an effort to manage risk and maximize cash flows.

Funds that focus on more nationally competitive markets, where acquisitions are made at lower cap rates, must create value through an exit strategy approach only. Geographically, focusing in the Central United States within specific Metropolitan Statistical Areas (“MSAs”) where the Investment Advisor has strong relationships, we believe will generate more quality investment and development opportunities. We believe that these targeted markets will create opportunities for the Partnership to develop and acquire properties at higher market cap rates, which will provide higher operating cash flows and create less dependence on creating value for investors through a creation of value exit strategy approach.

We believe the Partnership’s targeted markets are more insulated from volatility of the overall U.S. Real Estate economy and generally will continue to operate with relative stability through favorable or unfavorable national market trends. MSAs within the targeted markets that have a growing population, low unemployment, growing median income, and stable housing markets, have shown the ability to acquire and develop at higher cap rates, as compared to the larger U.S. market, and should allow for better acquisition prices and more predictable cash flows for the Partnership. We believe that investments in these geographic areas are sound and will remain good future prospects and that our strategic relationships will continue to create access to attractive transactions at higher-than-market cap rates, thereby delivering higher yields to the Partnership and favorable risk-adjusted returns.

Using a composite scoring criteria from U.S. census data along with what we view as “irreplaceable amenities” (such as State universities and other large NCAA Division I universities, U.S. Military Bases, Fortune 1,000 companies, and top 100 ranked hospitals), Goldenrod has developed a system to identify markets that we believe demonstrate a growing vibrant economy and have the ability to weather a downturn in the real estate market better than the national average. These characteristics in secondary and tertiary markets should result in more favorable capitalization rates during the acquisition and development phase, which results in higher cash flowing assets and solid annual distributions for our investors.

The investment objective of the Partnership is to provide investors with attractive risk-adjusted returns by employing a successful investment philosophy to make equity and debt investments in U.S. real estate assets, concentrated in the Central United States, through development, acquisition, financing, and management of commercial real estate assets with strong cash flow characteristics. The Partnership will acquire and develop income-producing commercial real estate assets in strategic locations in its target geographic areas. The Partnership will manage properties in a way that is designed to minimize risk and maximize current income, creating what we believe will be long-term value for the Partnership’s investors. The Partnership will seek to maximize cash flow distributions to investors by investing in assets with strong cash flow characteristics.

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