An Expanding Portfolio of Investments - MG3 REIT REIT.pdfHe reviews all capital construction...

An Expanding Portfolio of InvestmentsApril 2019

2Copyright © MG3 Developer Group LLC. 2019. All Rights Reserved

IMPORTANT DISCLOSURES

No Offer. This material is being provided for information and discussion purposes only, is qualified in its entirety by the information included in the confidential offering documents of MG3 REIT, LLC (the “Fund”)and is not intended to be, nor should it be

construed or used as investment, tax or legal advice, any recommendation, or an offer to sell, or a solicitation of any offer to buy, an interest in any security, including an interest in the Fund or , any other private investment vehicle managed by MG3

Developer Group, LLC (the “Sponsor” or “MG3”), MG3 Fund GP, LLC (the “Manager”), the manager of the Fund, MG3 Advisors, LLC (the “Investment Manager”), a wholly-owned subsidiary of MG3, which provides asset and investment management

services to the Fund and a subsidiary Delaware limited partnership through which the Fund will own substantially all its assets (the “Operating Partnership” or “OP”), and/or any of their respective affiliates. Any offer or solicitation of an investment in the

Fund may be made only by delivery of the Fund’s Confidential Private Placement Memorandum (the “Memorandum”) to qualified investors. Prospective investors should rely solely on the Memorandum in making any investment decision. An investment in

the Fund is not suitable for all investors and includes substantial risk, including loss of principal. This presentation has not been prepared for any particular investor or client or necessarily for any particular type of investor or client.

No Guarantees. Any descriptions involving investment process, models, statistical analysis, investment strategies, and styles are provided for illustration purposes only, may not be fully indicative of future investments, and are not intended to reflect actual

performance or to project performance. Investments for the Fund are selected by, and will vary in the sole discretion of, the Investment Manager and are subject to availability and market conditions, among other things. No representation is made that the

Investment Manager’s or the Fund’s risk management, investment process or investment objectives will or are likely to be achieved or successful or that the Fund or any of its investments will make any profit or will not sustain losses.

Performance. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. The Fund has not commenced operations and has no operating history. Unless otherwise indicated, performance results are net of applicable fees and expenses and

presume reinvestment of income. No representation is made that the Fund or underlying investment will make any profit or will not sustain losses, including the full loss of investor principal. Fund portfolio allocations are selected by, and will vary in the sole

discretion of the Investment Manager and are subject to availability and market conditions, among other things.

Target Returns. Fund, portfolio or return targets or objectives are used for illustration, measurement or comparison purposes and only as an aid or guideline for prospective investors to evaluate a particular investment program’s investment strategies and

accompanying information. Such targets or objectives reflect subjective determinations by the Investment Manager based on a variety of factors, including, among others, investment strategy, prior performance of similar products and strategies (if any),

volatility measures, risk tolerance and market conditions. Performance may fluctuate, especially over short periods. Targeted returns should be evaluated over the time period indicated and not over shorter periods. Targeted returns are not intended to be

actual performance and should not be relied upon as an indication of actual or future performance.

Forward-Looking Statements. Any assumptions, assessments, intended targets, statements or the like (collectively, “Statements”) regarding future events or which are forward-looking constitute only subjective views, outlooks, estimations or intentions,

are based upon the Manager’s expectations, intentions or beliefs, should not be relied on, are subject to change due to a variety of factors, including fluctuating market conditions and economic factors, and involve inherent risks and uncertainties, both

general and specific, many of which cannot be predicted or quantified and are beyond the Investment Manager’s or the Fund’s control. Future evidence and actual results (including actual composition and investment characteristics of Fund portfolios) could

differ materially from those set forth in, contemplated by, or underlying these Statements. In light of these risks and uncertainties, there can be no assurance and no representation is given that these Statements are now or will prove to be accurate or

complete in any way. The Investment Manager undertakes no responsibility or obligation to revise or update such Statements.

Projections. Although the projections presented herein are presented with numerical specificity, these projections are not factual. The projections are based on variables and assumptions that were deemed to be reasonable as of the date when the

projections were finalized. These assumptions are inherently uncertain and may be beyond the control of the Manager, the Investment Manager or the Fund. Important factors that may affect actual results and cause the Fund to fail to meet the projections

include, but are not limited to, risks and uncertainties described or referenced under the section entitled “Risk Factors” in the certain Private Placement Memorandum of the Fund. There can be no assurance that the projections will be realized or that the

Fund’s future financial results will not materially vary from the projections. By including the projections in these materials, none of the Manager, the Investment Manager or the Fund make any representation to any person regarding the ultimate performance

of the Fund or that any projected results will be achieved.

Descriptions of Process. Any descriptions or information involving investment objectives or criteria, investment process, or investment strategies are provided for illustration purposes only, may not be fully applicable to the Fund, may not be fully indicative

of any present or future investments, may be changed in the discretion of the Manager or its affiliates and are not intended to reflect actual performance or to project performance.

Risks. This information is as of the date(s) indicated, is not complete, is subject to change, and does not contain material information regarding the Fund, including specific information relating to an investment in the Fund and related important risk

disclosures. Before making any investment, an investor should thoroughly review the Memorandum to determine whether an investment is suitable for such investor. An investment in the Fund may involve a high degree of risk and volatility including,

without limitation, risk of adverse or unanticipated market developments, currency and exchange rate risks, risk of broker or bank failure or counterparty or issuer default, and risk of illiquidity.

Information from Third Parties. Certain information has been provided by and/or is based on third party sources and although believed to be reliable has not been independently verified and its accuracy, timeliness or completeness cannot be

guaranteed.

Confidentiality. This information is confidential, is the property of the Investment Manager, is intended only for intended recipients and their authorized agents or representatives and may not be distributed to any other person without our prior

written consent.


WHAT IS A REIT?

Description of REIT investment process is provided for illustration purposes only. This illustration may not be fully indicative of any present or future investment of the Fund.

Please see “Important Disclosures” for more information.

A REIT is a “real estate investment trust”. A REIT is a company that qualifies for special treatment for federal income tax purposes because it

derives most of its income from real estate-based sources and makes a special election under the Internal Revenue Code. The Fund intends to

operate as a REIT.

A corporation that qualifies as a REIT generally is not subject to federal corporate income taxes on its income and gains that it distributes to its

stockholders, substantially eliminating the “double taxation” of corporate income.

Qualified business income distributed by a REIT to its shareholders is eligible for the 20% “passthrough deduction” under section 199A of the

Internal Revenue Code. The passthrough deduction reduces the maximum federal income tax rate applicable to individual shareholders on this

income from 37% to 29.6% (not taking into account the 3.8% surtax on net investment income).

Investors Assets

Invest in Shares

Distributions

REITs

Acquisitions and/or

Capital Investments

Rental Income from

Tenant Rents or

Interest Payment


Potential for recurring cash flow,

appreciation, and intrinsic value - all

wrapped into one.Real estate is one of the few investments that may provide recurring

cash flow and appreciation potential while being historically less volatile

than other assets such as public equities.

The potential recurring cash flow is expected to come from leases, which

depending on the asset class, can be long-term contracts creating the

potential a source of predictable income. Pair that with the potential

appreciation from rents and land values increasing over time, and the

underlying value of the raw materials with which properties are built, and

you’ve got an investment that may deliver a compelling combination of

return and risk.

RECURRING CASH FLOW POTENTIAL

There can be no guarantee that historical trends will continue and a change in such trends is likely to significantly impact the performance of the Fund and its underlying investments. Past performance is not indicative of future results.

Please see “Important Disclosures” for more information

Equally important, REITs may

also be a suitable choice for

investors seeking:

Capital Preservation

Expected Monthly Income

Growth Potential


POTENTIAL BENEFITS OF INVESTING IN THE FUND

Advantages

of the Fund

Seek to generate secure

income by long-leases (1)

Portfolio

Diversification

Redemption Program

Professional

Management

Audited Financials Potential Tax Advantages

(1) Depending on the assets class..


COMPANYBACKGROUND

MG3 Developer Group, LLC (“MG3”)

A vertically integrated private real estate

company with expertise in investment

management, property management,

development, design, construction, leasing,

and financing.

Since 2003, MG3 has developed

Our strategy of specializing in educational projects complements

our planned future diversification across our key segments.

Our strategy may allow us to develop greater depth of knowledge in

our chosen segments while still benefiting from portfolio diversity

and attempt to limit investment down-side in the case of recession.

34educational projects

throughout Florida

Student stations

38,000Square feet

2,250,000Assets under

management

$540M

MG3 has developed schools, multifamily, high-end single-family

gated communities, governmental DEA facilities, luxury single-

family homes, office buildings and assisted living facilities.


z

SENIOR LEADERSHIP

MARCELO SAIEGHPrincipal

GUSTAVO BOGOMOLNIPrincipal and Certified General Contractor

HERNÁN LEONOFFPrincipal

Marcelo Saiegh facilitates company growth by overseeing

the fiscal health of MG3. With a strong background in commercial

finance, he provides strategic and financial leadership to the

organization through the oversight and development

of the accounting, tax, financial reporting and analysis,

and treasury functions.

Gustavo Bogomolni leads all MG3 development and construction

projects and during his tenure with the company has overseen the

execution of over $700 million in construction projects, ranging

from ground-up development and value creation to customized

tenant interiors.

Hernán Leonoff has extensive experience in real estate investment,

management, market analysis and business development.

Marcelo also provides strategic leadership and management

support to the company’s information technology department,

and co-leads re-development and expansion initiatives

for existing portfolios.

Prior to joining MG3, Marcelo led one of the most successful

textile companies in Argentina and spent more than decade in

real estate investment.

He earned his degree in Marketing and Business Administration

from ORT in Argentina.

He is responsible for business planning, budgeting and operational

activities, and is the pre-planning and pre-construction lead,

responsible for complete delivery chain management.

He reviews all capital construction projects for MG3’s portfolio

of assets. Prior to joining MG3, he led one of Argentina’s most

prominent custom home construction firms, managing the full

development process, from land acquisition to construction to

sales, and was in charge of the construction of more than 800

single-family homes and five condominium developments.

He earned his degree in Construction Engineering from

Universidad Tecnólogica Nacional, and his degree in Marketing

from ORT, both in Argentina. Gustavo is a Certified General

Contractor with the State of Florida.

His broad scope of responsibilities for MG3 includes the

management of new investment initiatives, execution of real estate

transactions, and expanding the company’s investment platform

through acquisitions, as well as the strategy, sourcing, analysis

and development of new opportunities.

Hernán supervises the management of existing properties,

oversees operations, including funding new developments

and lease renewals for existing and new assets, and co-leads

re-development and expansion initiatives for existing portfolios.

In addition to his real estate investment experience,

Hernán is part of long line of entrepreneurs, who built one

of the largest and most renowned chain of retail optical stores

in Argentina over four generations.

From an early age, he was involved in all aspects of the family

business and has played a critical role in maintaining and growing

the family legacy.

Public Charter Schools


DRIVEN BY PARENTAL DEMAND FOR CHOICEOVER 20 YEARS OLD AND GROWING STRONG

3.2M students growing at 12% CAGR

Started in 1992

7,000 schools growing at 7% CAGR

Waiting list of over 1M students

Currently adopted in 44 states and D.C.

0

2,000

4,000

6,000

8,000

NUMBER OF PUBLIC CHARTER SCHOOLS

NUMBER OF PUBLIC CHARTER SCHOOL STUDENTS

0

1,000,000

2,000,000

3,000,000

Source: NAPCS National Alliance for Public Charter Schools




SCHOOL CHOICE FAMILY PROFILE

Parents who want an

alternative to traditional

public schools drive

demand for Charter

Schools

Improves Academic Outcomes

and Saves Taxpayers Money (1)

(1) Source Foundation for Economic Education.



Charter School Trends


CHARTER SCHOOL TRENDS

More than 1 million student names

are on charter school waiting lists. (1)

Approximately 3.2 million students now attend

public charter schools, more than 5.82%

of the total number enrolled in public schools. (1)

Num

ber o

f Stu

dents

(Millio

ns)

7000

6000

5000

4000

3000

2000

1000

0

3.5

3

2.5

2

1.5

1

0.5

020182000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Num

ber

of

Schools

Number of Schools Number of Students

(1) Source: NAPCS National Alliance for Public Charter Schools





25

0

20

10

5

2005 2010 20352030202520202025

Current

Levels

Moderate 27%High 38% Low 22%

If current trends continue, charter schools will

educate 20-40 percent of all U.S. public school

students by 2035

590

364

297

252

165142

115 113

81 81 73 66 61 57 54 50 43 42 40 37 34 33 32 29 25 30

0

100

200

300

400

500

600

700

Numbers of New Schools Opened, by State (2011-2017)



Source: Analysis conducted by Neerav Kingsland Source: NAPCS National Alliance for Public Charter Schools



Number of New Public Charter Schools & Students2016-2017

State New Charter Schools Additional Students

California 65 31,515

Texas 47 33,710

Florida 36 21,140

Arizona 20 1,880

New York 16 14,100

Colorado 15 6,035

Louisiana 10 3,208

Arkansas 9 846

Tennessee 9 9,867

Utah 9 3,740

North Carolina 7 13,637

117,040

137,196

154,780

179,940

203,240

229,428

251,282

270,974

283,755295,814

0

50000

100000

150000

200000

250000

300000

350000

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

Florida PK-12 Enrollment in Charter Schools



Source: Florida Department of Education Source: NAPCS National Alliance for Public Charter Schools

Portfolio

Information provided in this section with respect to the Portfolio Properties indicated herein are

current as of March 31, 2019. The information provided herein is for illustration purposes only,

may not represent all investments that were made by the Fund, may not be fully indicative of

future investments of the Fund, and are not intended to reflect actual performance or to project

performance. Additionally, there can be no guarantee that similar investment opportunities will be

available in the future, or that, if available, the MG3, the Manager, the Investment Manager, or

the Fund will be able to take advantage of such opportunities. It should not be assumed that

investments made in the future will be comparable in quality or performance to the investment

described herein. Past performance is not indicative of future results. Please see “Important

Disclosures” for more information.


PORTFOLIO

Bell CreekAcademy

Total lot size

±10.22 acres

Rentable building area

73,197 SF

13221 Boyette Rd. | Riverview, FL 33569


PORTFOLIO

Total lot size

±9.2 acres


54,778 SF

9659 W. Waters Ave | Tampa, FL 33635

Hillsborough Academy of Math and Science


PORTFOLIO

Total lot size

±10.62 acres


74,196 SF

2251 E Mowry Drive | Homestead, FL 33033

Everglades Preparatory Academy


PORTFOLIO

Total lot size

±10.6 acres


122,175 SF

2025 McKinley St. | Hollywood, FL 33020

Avant Garde Academy Broward


PORTFOLIO

Orange County Prep Academy

Total lot size

±9.75 acres


67,663 SF

10250 University Dr. | Orlando , FL 32817


PORTFOLIO

Total lot size

±13.1 acres


95,469 SF

6309 S. US Highway 301 | Riverview, FL 33578

Bridge Prep Academy of Riverview


PORTFOLIO

Total lot size

±4.60 acres


29,540 SF

5710 La Costa Dr. | Orlando, FL 32807

Bridge Prep Academy Orange County, Inc


PORTFOLIO

Total lot size

±10.0 acres


103,070 SF

6400 Atlantic Blvd. | Jacksonville, FL 32211

Bridge Prep Academy of Duval


PORTFOLIO

Total lot size

±12.80 acres


40,386 SF

3161 Santa Barbara Blvd. | Naples, FL 34116

BridgePrep Academyof Collier


PORTFOLIO


52,960 SF

Total lot size

±6.53 acres

1725 N. Commerce Parkway | Weston, FL

ChangeHealthcare Weston Headquarters

Parking Spaces

250

Development Team Experience

Properties referenced herein represent completed development projects in which MG3 or an

affiliate thereof invested, developed or re-developed. Such properties may include Portfolio

Properties of the Fund as well as investments that are not and will not be investments of the

Fund. MG3’s past projects serve to demonstrate the prior experience of MG3’s team. The

information provided herein is for illustration purposes only, may not be fully indicative of

future investments of the Fund, and is not intended to reflect actual performance or to project

performance or results. Additionally, there can be no guarantee that similar investment

opportunities will be available in the future, or that, if available, the MG3, the Manager, the

Investment Manager, or the Fund will be able to take advantage of such opportunities. It

should not be assumed that investments made in the future will be comparable in quality or

performance to the investments described herein. Past performance is not indicative of

future results. Please see “Important Disclosures” for more information.


DEVELOPMENT TEAM EXPERIENCE

Imagine School at

Boynton Beach, FL

Imagine School at

Broward Coral

Springs, FL

Renaissance Charter

School at Coral

Springs, FL

Sarasota School

of Arts Sarasota, FL

Renaissance Charter

School at Cooper

City, FL

Renaissance

Charter School

at Plantation, FL



Renaissance Charter

School at Tamarac, FL

Kids Community

College at

Tampa, FL

Pinellas Academy

of Math and Science

Largo, FL

International

Bachelorette School

at Tampa

Championship

Academy of Distintion

Davie, FL

Miami Arts Charter

School Homestead, FL



Renaissance

Charter School &

Bright Horizons Day

Care Wellington, FL

Renaissance Charter

School at Central

Palm, FL

Renaissance Charter

School at Goldenrod

Orlando, FL

Independence

Academy Charter

School Tampa, FL

Independence

Academy Charter

School Tampa, FL

Bridge Prep Academy

at Palm Beach, FL



Miami Arts Charter

School Wynwood

Miami, FL

Toras Emes Academy

of Miami, FL

Yeshiva Toras Chaim

North Miami Beach, FL

Residence Golden

Beach, FL

Residence Golden

Beach, FL

Residence Golden

Beach, FL



Havana Towers Miami, FL Assisted Living Facility at Davie, FLThe Preserve at Emerald Hills

Hollywood, FL


INVESTMENT STRUCTURE

Real Estate Real Estate Real Estate

LLC LLC LLC

1 2 3

OP

Investors

General Partner

The Fund has not yet held its initial closing. The structure and terms of the Fund are subject to further change.


NEW TAX ACT MAY PROVIDE SUBSTANTIAL TAX SAVINGS TO FUND INVESTORS SHAREHOLDERS

The Tax Cuts and Jobs Act (TCJA)

provides substantial potential tax savings

to REIT investors.

Qualified business income distributed by a REIT to its

shareholders is eligible for the 20% “passthrough deduction”

under section 199A of the Internal Revenue Code. The

passthrough deduction reduces the maximum federal

income tax rate applicable to individual shareholders on this

income from 37% to 29.6% (not taking into account the 3.8%

surtax on net investment income).

The hypothetical example presented and any description of process are provided for illustration purposes only, may not be fully applicable to the Fund, may not be fully indicative of any present or future results of an investment in the Fund, may be changed

without notice and will be outside the control of MG3, the Manager, the Investment Manager, the Fund and their respective affiliates. Accordingly, investors should not place undue reliance on this illustrative example as an indicator of current or future

economic results or value to the Fund. Past performance is not indicative of future results. Please see “Important Disclosures” for more information.

Comparison of Investment in Rental Real

Estate through a Partnership vs. a REIT

Example REIT investmentInvestment in a Partnership

With Rental Real EstateInvestments in a REIT

Investment $100,000 $100,000

Pre-Tax Ordinary

Distribution$7,000 $7,000

Effective Income

Tax Rate37.0% 29.6%

Tax $2,590 $2,072

After Tax Income $4,410 $4,928

After Tax Yield 4.4% 4.93%

Please check with your individual advisor to determine how your individual tax profile is affected

The hypothetical does not take into account the 3.8% Medicare tax on net investment income or any

applicable state and local taxes

*REIT investments included in the TCJA definition of qualified business income, with qualified cooperative

dividends and qualified publicly traded partnership income specifically identified


2980 NE 207th Street, Suite 603, Aventura, Florida 33180

(954) 929 5229

(954) 929 5226

[email protected]

www.mg3reit.com

mailto:[email protected]

An Expanding Portfolio of Investments - MG3 REIT REIT.pdfHe reviews all capital construction...

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