What Happened in 2025 – The Real Story
The variance against budget was not driven by uncontrolled overhead or weak expense discipline. In fact, the opposite occurred.

• What Management Executed Well
  Operating expenses finished ~35% below budget, reflecting tighter controls and improved systems
• Fund-level cost discipline improved materially year over year
• Capital was deployed into assets with clear stabilization and value-creation upside

• Where Results Lagged the Plan
  Income finished below plan as assets worked through repositioning phases
• Direct costs ran higher than budget due to:
  • Unit turns, deferred maintenance, and construction carry
  • Insurance, taxes, and property-level normalization costs
  • One-time execution items tied to asset improvements

This was a timing and execution issue, not an asset-quality issue.

Why the Setup Is Stronger Going Forward
Multifamily Stabilization → Refinance → Liquidity
The Fund is now firmly focused on stabilizing multifamily assets by improving:

• Physical and economic occupancy
• Collections discipline
• Property-level expense efficiency
• Consistent trailing performance (the primary refinance metric)

As assets demonstrate sustained stability, we intend to:

• Refinance select properties
• Improve liquidity and extend runway
• Reduce balance-sheet pressure while maintaining long-term upside

This marks a clear shift from capital deployment to capital optimization.

New Strategies Supporting Near-Term Cash Flow
1. Quick-Turn Fix & Flip Projects
We are intentionally increasing allocation to short-duration fix-and-flip projects designed to:

• Generate faster realized gains
• Improve capital velocity
• Support liquidity while long-term assets season

These projects are targeted, conservative, and complementary to our core multifamily strategy.

2. Re-Engaging the NNG Mezzanine Fund
With asset performance improving and execution visibility increasing, we are preparing to re-engage marketing for the NNG Mezzanine Fund. The objective is to:

• Introduce aligned, structured capital
• Reduce reliance on higher-cost capital
• Add flexibility as the portfolio stabilizes

This step is being taken because the foundation is materially stronger today than earlier in the cycle.

Momentum & Outlook
There is still work to do, but the direction is clear:

• The heaviest capital lift is behind us
• Cost discipline has materially improved
• Asset performance is stabilizing
• Liquidity strategies are now actionable

2026 is about converting progress into cash flow, liquidity, and durability.

Closing Perspective
We are not claiming victory prematurely. We are claiming control.

The focus, structure, and execution now in place are producing real results, and we are positioned to build on that momentum responsibly.

Q1 2026 KPI Dashboard (Appendix)