 | Confidential |
| Project Investor Update 264 Ridge Road Watchung, New Jersey 07069 | Project type Single-Family Ground-Up Construction | Reporting period September 2026 | Borrowing entity NNG Real Property I, LLC |
|  Completed residence, front elevation. Listing photography supplied by management. | | | Prepared by NNG Capital Fund | As of September 28, 2026 |
| | Project position at a glance Executive Dashboard Current stage For Sale Construction complete; on market since 12/2025 |
| Estimated % complete 100% Completed 12/01/2025 |
| Current loan balance $1,950,000 Kiavi · interest-only · current |
| Construction funds remaining $0 Loan fully advanced at closing |
| Current ARV (base) $2,300,000 Last offer level · Zestimate $2.31M |
| Construction completed 12/01/2025 Listed 12/19/2025 |
| Loan maturity 04/01/2027 ~6 months remaining |
| Projected profit $10K to $259K Base $140K on $1.9M cost |
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| Project Status MONITORING | | Exit timing risk. Construction is complete and the loan is current, but the home has not secured a contract after about nine months on the market. It is now listed at $2,375,000, and a $2,300,000 offer was declined. Management's goal is to close before year-end. The Kiavi loan matures 04/01/2027, and extensions are at the lender's discretion. Status moves to Action Required if no executed contract is in place by 12/31/2026.
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| Executive Summary | Accomplished | Construction of the 6-bedroom colonial on 1.55 acres is complete. The home is on the market with weekly open houses, averaging 4 to 6 couples each weekend, including repeat visitors. | | Key challenge | Sale timing and price. The asking price has moved from $2,800,000 to $2,375,000 (−15.2%). A $2,550,000 contract fell through after inspection when the buyer withdrew agreement to pay the mansion tax. The most recent offer, $2,300,000, was declined. | | What we owe | $1,950,000 to Kiavi Funding at 9.70% interest-only ($15,762.50/month). No construction funds remain undrawn. Balloon due 04/01/2027. | | Value & profit | Appraised at $2,630,000 as-complete (04/2025). Market evidence has weakened, with more sellers than buyers and higher mortgage rates affecting the luxury segment. Preliminary projected profit ranges from about $10K (downside) to $259K (upside), with a base case of about $140K. | | Focus now | Securing a contract in the September to December selling window, with a goal of closing before 12/31/2026 and well ahead of loan maturity. |
| | Kiavi Funding, Inc. · Loan No. 35200353 Loan & Mortgage Summary Lender
Loan No. 35200353 | Kiavi Funding, Inc. | Loan type
Note §2.2.3 to 2.2.4 | Interest-only, balloon at maturity | Original loan amount
Kiavi Promissory Note No. 35200353, dated 03/23/2026 | $1,950,000 | Original principal balance
Note §1.1, full initial advance | $1,950,000 | Current principal balance
Kiavi servicing portal (next due 10/01/2026) | $1,950,000 | Construction funds remaining
Loan fully advanced at closing | $0 | Interest rate
Note §2.1.1 (30/360 basis) | 9.700% | Interest type
Note §2.1.1, single stated rate, no index | Fixed | Monthly payment (interest only)
Note §2.2.3; Kiavi servicing portal | $15,762.50 | Note date
Kiavi Promissory Note No. 35200353 | 03/23/2026 | First payment date
Note §2.2.1 | 05/01/2026 | Loan maturity date
Note §2.2.2; servicer portal agrees | 04/01/2027 | Remaining term
From 10/01/2026 payment to maturity | 6 months | Extension option
Note §2.2.9 | Up to 6 mo. each, lender's discretion | Extension cost
Note §2.2.9(b); later extensions at lender discretion | Up to 1.00% (~$19,500) for first | Prepayment penalty
Note §2.2.5 | None | Estimated payoff at sale
Interest accrues ~$525.42/day | $1,950,000 + accrued interest |
Metric, current information and source document shown for each line. | Loan Maturity Risk Completion cushion Loan maturity 04/01/2027 less construction completion 12/01/2025 16 months of cushion, construction finished |
| Exit cushion Loan maturity 04/01/2027 less projected closing. Goal: 12/31/2026. Base case assumes 03/2027. ≈ 3 months (goal) · ≈ 0 to 1 month (base case) |
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| EXIT TIMING RISK: MONITORING REQUIRED. Construction finished on 12/01/2025, well before maturity. The sale has not. With typical contract-to-closing periods, an executed contract is needed by roughly January 2027 to close before 04/01/2027. |
Extension terms (Note §2.2.9): If the loan is not repaid at maturity, Kiavi may, at its sole discretion, extend the term in increments of up to six months. The first extension fee is up to 1.00% of the outstanding balance (about $19,500); fees for later extensions are set by the lender. Interest continues at 9.70% during any extension. An extension is not a borrower right, so management is not relying on one. Default interest of an additional 10% applies after maturity if the loan is unpaid and not extended (§2.1.3). | | Project Timeline AcquisitionApprovals / PermittingSite WorkFoundationFramingRoof / WindowsMechanical Rough-InsInsulation / DrywallInterior FinishesExterior / LandscapingCOMarketContractClosingLoan Maturity 04/01/27 ■ Completed ■ Current ■ Upcoming ■ Loan maturity 2024 acquired · 04/2025 appraisal at ~45% complete · 12/2025 first listed · 03/23/2026 Kiavi refinance · 04/01/2027 loan maturity. A 6-month extension is at the lender's discretion. | Construction completed | 12/01/2025 | | Listing date | 12/19/2025 | | Projected closing | 12/31/2026 (goal) | | Loan maturity | 04/01/2027 | | Remaining term | 6 months |
| | Video update Project Walkthrough Watch the Current Project Update Video nngcapitalfund.com/264-ridge-proj-update |
Video Highlights | • | Pricing: list price is now $2,375,000, down from $2,800,000 at launch. The launch price was set high for a winter debut, and the first reduction followed in February. | | • | Offers: a $2,550,000 contract ended after the buyer used inspection findings to press on price and then declined to pay the mansion tax. All inspection items had been agreed to. A later $2,300,000 offer was declined. | | • | Buyer traffic: open houses every weekend since relisting, averaging 4 to 6 couples, with repeat visitors. Four couples came through last weekend. | | • | Market: more sellers than buyers. Management noted mortgage rates near 7 to 7.5% weighing on luxury demand, with homes under $2M moving more readily. | | • | Goal: contract in the fall window and close before year-end 2026. The loan balance, mansion tax and commissions set a practical floor on price. |
| | Construction Progress Previous stage Framing / dry-in (~45% complete, 04/2025) | Current stage Completed 12/01/2025, on market | Next stage Contract of sale |
Before · April 2025  BEFORE / PREVIOUS UPDATE, April 2025 (lender appraisal inspection). Rear elevation with framing, sheathing and balcony structure in place; appraiser estimated about 45% completion. | Current progress  CURRENT PROGRESS. Completed rear elevation: board-and-batten siding, black-frame windows, three levels of covered balconies, lower-level patio, fencing, landscaping and the engineered retaining wall. |
The home is built. Per the listing, it has six bedrooms, each with an en-suite bath, a finished walk-out lower level with a gym and recreation room, a three-car garage, and a circular drive. Work has shifted from construction to sale. This period's activity was a further price repositioning to $2,375,000, weekly open houses, and one offer at $2,300,000 that management declined. | Current Challenges & Management Response | Extended marketing period | In progress |
Challenge Listed 12/2025 at $2,800,000. About nine months on market with five price changes; now $2,375,000. A $2,300,000 offer was declined. Impact Each month adds about $15,762.50 in interest carry. Pricing is now 9.7% below the appraised value, compressing projected profit. Management response Weekly open houses with steady traffic (4 to 6 couples per weekend). Price repositioned for the fall selling window. Goal is a contract to close before 12/31/2026. |
| Terminated sale contract | Resolved |
Challenge A $2,550,000 contract was accepted with the buyer paying the ~$50K mansion tax. After inspection, the buyer sought a price reduction and then withdrew from paying the tax, although all repairs had been agreed. Impact Lost time under contract and returned the home to market. Pricing has since moved below the contract price. Management response Management ended the contract rather than absorb the added cost and returned the property to market. |
| Construction cost overruns | Resolved |
Challenge Engineer-required retaining wall changes, a new septic tank, and repairs required to obtain the certificate of occupancy. Impact All-in cost of $1.9M implies about $145K (~12%) above the original $1.19M construction budget. Itemized costs not yet provided. Management response Work completed and CO obtained. Itemized final cost report requested to confirm the variance. |
| Approaching loan maturity | Monitoring |
Challenge Kiavi balloon of $1,950,000 is due 04/01/2027 and there is no contract in place. Impact If the home is not sold in time, an extension (fee up to ~$19,500) or refinance would be needed. Management response Goal is to close by 12/31/2026. Open extension discussion with Kiavi early as a contingency. |
| | Original budget per construction budget in 04/2025 appraisal Construction Budget | Category | Original budget | | Soft costs | $74,250 | | Demolition / trashout | $45,000 | | Site work & landscape | $132,800 | | Foundation | $112,000 | | Structure (framing, windows) | $305,000 | | Exterior | $132,000 | | Systems (MEP) | $109,500 | | Interior | $73,300 | | Finishes | $110,000 | | Flooring | $64,000 | | Appliances | $29,000 | | Final / misc. | $3,500 | | Total construction | $1,190,350 | | Spent / forecast at completion (implied*) | $1,335,000* | | Remaining (all categories) | $0 | | Variance | +$144,650* |
* Implied: management-reported all-in cost basis $1,900,000 less $565,000 acquisition price (tax records). Line-item actuals not provided. Whether the $1.9M includes financing and carry costs is unconfirmed. Budget form lists 6 BR / 6.5 BA / 6,573 sq ft projected vs. appraisal 5,924 sq ft GLA. | Construction Draw Analysis | Loan commitment (Kiavi) | $1,950,000 | | Amount advanced | $1,950,000 | | Undrawn balance | $0 | | Construction costs incurred (implied) | ~$1,335,000 | | Estimated cost to complete | $0 |
% complete vs % budget used vs % facility drawn | % construction complete | | 100% | | % budget used (implied) | | 112% | | % facility drawn (Kiavi) | | 100% |
Construction is complete and the Kiavi loan was fully advanced at closing, so no lender funds remain to draw. Budget use above 100% reflects the reported overruns. | Current Market Value / ARV | Property | Sale date | Sale price | Subject: 264 Ridge Rd
6/7.1 (MLS) · 5,924 sq ft · $401/sq ft at list | Active | $2,375,000 list | 90 Chelsea, Watchung
5/7 | 02/2026 | $2,950,000 | 40 High Oaks Dr, Watchung
6 BR | Closed | $2,500,000 | 53 Canterbury Ln, Watchung
5 BR | 02/2026 | $2,100,000 | 89 Knollwood Dr, Watchung
5/5.1 | 07/28/2026 | $1,930,000 | 138 Oakwood Rd, Watchung
5/5 | 08/19/2026 | $1,925,000 |
Source: GSMLS closed sales as reported on public portals (Movoto, Estately, Trulia, Coldwell Banker, Redfin), retrieved 09/28/2026. Portals do not report square footage, distance or condition; a broker CMA is needed to complete those details. 89 Knollwood sold at $1,930,000 against a $2,398,000 list (about 20% under). For reference, the 04/2025 appraisal comparables were $2,150,000 to $2,650,000 (2024 to early 2025 sales). | Original underwritten ARV (04/2025) | $2,630,000 | | Current conservative | $2,250,000 | | Current base | $2,300,000 | | Current upside | $2,375,000 | | Current list price | $2,375,000 |
Market evidence since underwriting: WEAKENED
The 04/2025 appraisal concluded $2,630,000 as-complete. Since then the home has not sold at asks from $2,800,000 down to $2,425,000. One accepted contract ($2,550,000) failed, and the most recent offer was $2,300,000. The two strongest sales of the summer closed at about $1.93M, one of them 20% below its $2.4M ask, and the only 2026 Watchung sales above $2.1M found closed in early 2026. Redfin reported the median Watchung sale price per sq ft down about 13% year over year as of May 2026. Current values are management scenario values based on listing, offer and sales evidence, not a new appraisal. Third-party automated estimate (Zillow) | Zestimate® | $2,309,500 | | Estimated sales range | $2.19M to $2.42M | | Rent Zestimate® | $5,023/mo |
Captured 09/28/2026. The estimate jumped to roughly $2.9M when the home was listed and has since trended down to about $2.31M, tracking the price reductions. Automated and for reference only; not an appraisal. Consistent with the $2,300,000 base case. |
| | ARV minus mortgage balance is not profit Equity / Value Position | Current base ARV | $2,300,000 | | Less estimated loan payoff | ($1,950,000) | | = Gross project equity | $350,000 | | Remaining construction | $0 | | Estimated remaining carry (6 mo. interest) | ($94,575) | | Estimated selling costs | ($165,000) | | Taxes, insurance, utilities | Not included | | = Estimated cash to fund at closing | $90,425 |
Chart 4: Value vs capital position | Appraised ARV 04/25 | | $2.63M | | Base ARV | | $2.30M | | Kiavi loan payoff | | $1.95M | | All-in project cost | | $1.90M |
Two different figures: $1.95M is what is owed to Kiavi; $1.90M is what the project has cost. |
This is cash left after repaying Kiavi in the base case. Base-case profit is $140,425 (next table). The two differ by $50,000 because the Kiavi loan ($1,950,000) is larger than the all-in project cost ($1,900,000). Property taxes, insurance and utilities during the sale period are not included. | Updated Project Economics | Scenario | Sale price | Net profit | | Downside | $2,250,000 | $10,375 | Selling costs ($162,500) · All-in project cost to date ($1,900,000) · Interest carry from 10/2026 to closing ($157,625) · Extension fee ($19,500)
Cash to fund after $1,950,000 Kiavi payoff: ($39,625) | | Base case | $2,300,000 | $140,425 | Selling costs ($165,000) · All-in project cost to date ($1,900,000) · Interest carry from 10/2026 to closing ($94,575) · Extension fee $0
Cash to fund after $1,950,000 Kiavi payoff: $90,425 | | Upside | $2,375,000 | $258,962 | Selling costs ($168,750) · All-in project cost to date ($1,900,000) · Interest carry from 10/2026 to closing ($47,288) · Extension fee $0
Cash to fund after $1,950,000 Kiavi payoff: $208,962 |
Downside: sale at $2,250,000 (~5% below current list), closing about 07/2027 after one lender extension. 10 months of carry plus a 1% extension fee. The result is close to breakeven.
Base: sale at $2,300,000 (the most recent offer level), closing by 03/2027 before maturity. 6 months of carry.
Upside: sale at the full list price of $2,375,000, closing by 12/31/2026 (management's goal). 3 months of carry. All cases: Profit is measured against the $1.9M all-in project cost. Cash to fund is what remains after selling costs, carry and repaying the $1,950,000 Kiavi loan; it is lower than profit because the loan balance is $50,000 higher than the project cost. 5% brokerage is an assumption. The ~$50K mansion tax varies with price. Figures are estimates, not guarantees. | | Original Plan vs Current Forecast Construction budget Original: $1,190,350 · Current: ~$1,335,000* · Variance: +$144,650 (+12.2%) | Completion date Original: n/a · Current: Completed 12/01/2025 · Variance: n/a | Sale date Original: n/a · Current: Goal 12/31/2026; not under contract · Variance: n/a | ARV Original: $2,630,000 · Current: $2,300,000 (base) · Variance: −$330,000 (−12.5%) | Total project cost Original: $1,755,350** · Current: $1,900,000 · Variance: +$144,650 | Loan payoff Original: $1,950,000 · Current: $1,950,000 + accrued interest · Variance: n/a | Projected profit Original: n/a · Current: $10,375 to $258,962 · Variance: Base case $140,425 |
Overall position BEHIND PLAN Construction is complete, but costs ran about 12% over the original budget and market evidence now points to a sale price about 12% below the appraised value used at underwriting. The sale has taken far longer than the typical 1 to 3 month marketing window. The project remains projected to be profitable in the base and upside cases; the downside case is near breakeven. |
* Implied from management-reported cost basis. ** $565,000 acquisition + $1,190,350 budget; excludes financing costs. Original underwriting memo not provided. | Current Risk Assessment Current situation: Construction complete and CO obtained. Repairs agreed with the prior buyer are being confirmed. Management response: Document all repair items so they cannot delay a future sale. | Current situation: No construction spend remains. The ~12% overrun has already occurred. Management response: Obtain final itemized cost report to confirm the $1.9M basis. | Current situation: About nine months on market; steady showings but no current contract. Management response: Weekly open houses; pricing set for the fall selling window. | Current situation: About six months remain. Extension is discretionary, up to 1% fee. Management response: Goal to close by 12/31/2026; open extension discussion with Kiavi early. | Current situation: Five price changes, one failed contract, latest offer $2.3M. More sellers than buyers; rates weighing on luxury demand. Management response: Price against current closed sales; evaluate offers against net proceeds and carry cost. | Current situation: Base-case closing leaves roughly one month of cushion to maturity. Management response: Escalate to Action Required if no executed contract by 12/31/2026. |
| | Next 30 to 60 days What Happens Next | 1 | Target: 10/05/2026 Obtain relist date for GSMLS #4051479 and confirm Zillow reflects the $2,375,000 price | | 2 | Target: Weekly Continue weekly open houses; report showing and offer activity | | 3 | Target: 10/16/2026 Obtain broker CMA with sq ft, distance and condition for the five comparables shown | | 4 | Target: 10/01 · 11/01/2026 Make 10/01 and 11/01 interest payments ($15,762.50 each) | | 5 | Target: 11/15/2026 Contact Kiavi servicing to confirm extension process, fee and timing | | 6 | Target: 11/15/2026 Executed contract of sale (needed by mid-Nov. for a year-end closing) |
| Message from Management Where are we? The home at 264 Ridge Road is built and on the market at $2,375,000. The loan is current, and no construction funding remains outstanding. This has been the longest marketing period of any project we have built. Buyer interest is steady, but the luxury market has softened, with more sellers than buyers and higher mortgage rates. What are we focused on now? Converting current showing activity into a contract during the September to December window, with the goal of closing before year-end. We will weigh every offer against net proceeds after the loan payoff, mansion tax, commissions and ongoing carry. What should investors expect before the next update? A report on open-house traffic and any offers, updated comparable sales, confirmation of the final project cost, and, if a contract is not in place by year-end, an update on lender extension discussions. We will not rely on an extension that the lender has not granted. |
NNG Capital Fund | Source Documents Kiavi Promissory Note No. 35200353, dated 03/23/2026 (loan terms, rate, payment, maturity, extension)
Kiavi servicing portal (balance, status, maturity; next payment due 10/01/2026)
Appraisal, Ezio S. Creglia for Renovo Financial, effective 04/05/2025, signed 04/13/2025 (as-complete $2,630,000, as-is $1,400,000, comparables, photos, budget $1,190,350)
GSMLS #4051479 (Compass New Jersey), active at $2,375,000; prior listings #4002185 / #4016613 / #4030988 via Zillow, retrieved 09/28/2026
Watchung closed sales 01 to 09/2026, GSMLS via public portals, retrieved 09/28/2026
Zillow Zestimate® and history, captured 09/28/2026
Management walkthrough video (09/2026); management-reported cost basis and overrun causes (07/2026); property photography supplied by management This update is provided to existing investors for information only and is not an offer to sell or a solicitation to buy any security. Projections, values and scenarios are estimates based on the documents listed and on stated assumptions; they are not guarantees of sale price, timing or return. Actual results may differ materially. | | NNG Capital Fund | Confidential, prepared for existing investors only |
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