Dear Investors,

As we close the third quarter, The Summit Apartments continues to advance toward full stabilization. Occupancy is trending upward, leasing traffic remains steady, and collections have strengthened month-over-month. Renovation work completed earlier this year has supported higher rent potential and positioned us for stronger financial performance heading into Q4.

The property remains a core value-add asset within the NNG Capital Fund, with consistent revenue improvement and disciplined expense control producing a solid NOI margin. Our focus now is on tightening unit-turn timing and maintaining leasing velocity to achieve a sustained occupancy level above 85% before year-end.

1. Occupancy & Leasing Performance

Physical occupancy averaged 64% in September, reflecting both recent move-outs and a batch of units in active turn status. Economic occupancy held in the mid-40% range as we continue to absorb renovated units.

Leasing activity was healthy: 137 new inquiries translated into 28 showings and 10 approved applications, resulting in 9 move-ins against 3 move-outs for a net gain of six occupied units. Web-based marketing and local agent referrals remain the strongest sources of traffic.

We expect October and November to deliver a meaningful increase in occupancy as several ready units complete final touch-ups and enter the market.

2. Collections & Income Activity

Collections performance improved again in September, reaching nearly 87% of total receivables.

• Rent collected: ≈ $58K

• Total collected (including fees): ≈ $68K

• Outstanding balances: ≈ $10K, down from August.

We continue to enforce payment discipline while maintaining open communication with tenants facing temporary hardship. Delinquencies have dropped below 7% of occupied units, and six remaining eviction cases are in process with court dates scheduled in October and November.

Overall, our rent recovery trend has strengthened each month of Q3, and we anticipate surpassing 90% collection efficiency by December as occupancy rises.

3. Financial Highlights

Operating performance remains consistent with our value-add plan.

Metric: Total Income

September 2025: ~$94K

Trailing 12-Month (Pro Forma): ~$940K

Metric: Operating Expenses

September 2025: ~$30K

Trailing 12-Month (Pro Forma): ~$300K

Metric: Net Operating Income (NOI)

September 2025: ~$64K

Trailing 12-Month (Pro Forma): ~$640K

Metric: Cap Rate (at $9.24M basis)

September 2025: 6.9%

Trailing 12-Month (Pro Forma): 6.9%

Metric: Rent per Unit (Avg)

September 2025: $785

Trailing 12-Month (Pro Forma): $910 (target)

Expenses have remained in line with projections, with utilities and payroll tracking closely to budget. The RUBS implementation continues to add incremental revenue, offsetting higher insurance and tax adjustments earlier in the year.

At stabilization, The Summit is expected to generate an annualized NOI of ~$725K, reflecting a 13% uplift from current trailing levels.

4. CapEx & Renovation Progress

During Q3, we completed several deferred-maintenance and enhancement projects, including:

• HVAC replacements and drain line repairs on select buildings.

• Unit interior upgrades (flooring, lighting, and appliance replacements).

• Parking lot patching and restriping.

• Exterior paint touch-ups and signage improvements.

CapEx spend through September totals roughly $210K, primarily allocated toward unit renovations and mechanical systems. Renovated units are commanding rent premiums of $75–$100/month over legacy leases.

5. Outlook for Q4 2025

Our focus for Q4 is clear:

• Increase physical occupancy to 80%+ by year-end through accelerated turn completions and strategic concessions where needed.

• Strengthen collections to sustain >90% rate.

• Prepare the property for refinance positioning in early 2026 by stabilizing NOI above $700K annualized.

With ongoing leasing momentum and completed capital improvements, The Summit Apartments is on track for full operational stabilization within the next two quarters. We remain confident in the property’s long-term potential to deliver strong income growth.