PANCO STRATEGIC REAL ESTATE FUND I, LP PANCO STRATEGIC REAL ESTATE FUND...

PANCO STRATEGIC REAL ESTATE FUND I, LP PANCO STRATEGIC REAL ESTATE FUND I-QP, LP

REPORT TO INVESTORS FIRST QUARTER 2016

UNAUDITED

CONFIDENTIAL

PANCO STRATEGIC REAL ESTATE FUND I, LP & I-QP, LP

Q1 2016 REPORT TO INVESTORS

TABLE OF CONTENTS

TABLE OF CONTENTS

LETTER FROM PANCO FUND GP, LLC……………………………………………………... ……..1

ACTIVE INVESTMENTS………………………………………………………………………... ……..5

INVESTMENT SUMMARIES…………………………………………………………………… ……..5

The Point at Silver Spring, Silver Spring, MD ........................................................................ 6

The Point at Annapolis, Annapolis, MD ................................................................................ 11

The Point DC Portfolio (Magazine Holdings, LLC) .............................................................. 14

The Point at Alexandria, Alexandria, VA

The Point at Bull Run, Manassas, VA

The Point at Leesburg, Leesburg, VA

The Point at Dulles, Herndon, VA

The Point at McNair Farms, Herndon, VA

The Point at Germantown, Germantown, MD

The Point at Watkins Mill, Gaithersburg, MD

The Point at Laurel Lakes, Laurel, MD ................................................................................. 20

REALIZED INVESTMENTS ……...…………………………………………………………………...24

INVESTMENTS SUMMMARIES……...……………………………………………………………....24

The Grove at Arlington, Arlington, VA ................................................................................. 25

The Point at Fairfax, Fairfax, VA .......................................................................................... 26

The Ellington, Washington, DC ............................................................................................. 28

New York City Apartment Portfolio, New York, NY ........................................................... 30

Acme Commons, Bordentown, NJ......................................................................................... 32

The Point at River Ridge…………………………………………….………………………34

INVESTMENT SUMMARY CHART……………………………………………………………….....36



LETTER FROM PANCO FUND GP, LLC


1

LETTER FROM PANCO FUND GP, LLC April 27, 2016

Dear Investors,

Fund I Update:

Fund I was funded with $100.2 million of capital commitments and successfully invested from 2008 – 2012 in 16 transactions with an approximate total capitalization of $912.5 million. We believe that Fund I prudently accessed the debt markets, direct equity investments and our established joint venture equity relationships to maximize potential investment profitability. Since 4 of the investments were realized during the Fund I investment period, capital was recycled and reused from those investments allowing Fund I to invest approximately $111.5 million of the $100.2 million of capital commitments. Fund I also benefitted from 5 joint ventures, including 2 joint ventures with Fund II, that invested alongside Fund I with approximately an additional $121.0 million of equity, for a combined Fund I and joint venture equity investment of approximately $232.6 million. Of the 16 transactions in Fund I, 13 were investments in tangible real estate and 3 were debt transactions. To date, 6 of the 16 assets have been fully realized. Capital events and cash flow have generated 29 distributions amounting to approximately 56% of the committed capital. The remaining 10 investments in Fund I are comprised of 3,612 multifamily units with approximately 42,000 square feet of retail. The realized and unrealized compounded annual gross returns on Fund I investments are projected to be approximately a 16.1% gross IRR, approximately $231 million of gross proceeds to equity, and an approximate gross total return multiple on committed capital of 2.1x. The 16 transactions are located in New York, New Jersey, Maryland, Virginia and Washington, DC.

We plan to continue making quarterly distributions to our Limited Partners from the Fund I assets

during the holding period of these investments. We are now in the middle of the Fund I lifespan and anticipate holding the majority of the investments for a few more years. We continually evaluate the marketplace for strategic recapitalization and disposition opportunities that would be accretive to Fund I returns. Please note that of the 10 remaining assets in Fund I, 2 were purchased in 2012, 7 in 2011 and 1 in 2010, while 6 investments have been realized. Six of these 10 assets were refinanced in 2015, one added a supplemental mortgage in February 2016, and another asset is anticipated to be refinanced this summer.

Current Activity:

On February 10, 2016, we added a $25,380,000 Freddie Mac Supplemental Mortgage for The Point at Silver Spring. After successfully implementing a value-add program while maximizing operational efficiencies at the property, The Point at Silver Spring has realized 45% NOI growth since acquisition. The property had $8.5 million in NOI when we bought it out of bankruptcy in August 2012, and the NOI at its current 2016 run rate is $12.3 million. This increase in NOI has given us the ability to add this $25,380,000 supplemental loan at a floating interest rate of 1 Month LIBOR + 3.48%. At today’s rates, this equates to an effective interest rate of 3.92%. The supplemental loan is coterminous with the 3.44% fixed rate $120,780,000 first mortgage, and the debt service on the supplemental will be interest only until September 1, 2017. The supplemental is an opportunity to take advantage of the capital markets to provide a lump sum, tax deferred distribution for our limited partners. As part of the underwriting process, we received an appraisal for the property. The appraised value of the property is $203 million and the broker opinion of value is $223 million, which represents a 21% to 33% premium, respectively, to our $168 million purchase price.





2

We are currently considering marketing The Point at Annapolis for sale because the limited supply Annapolis sub-market has demonstrated significant investor demand from institutional, 1031-exchange and international buyers. We had previously run a marketing process for the asset in the second half of 2015 but ultimately decided to hold onto the asset after we didn’t receive an offer that matched what we deemed to be acceptable. With the asset’s continued operational success, it will be accretive to continue to own and operate this asset should bids not meet our sale criteria. The property is over 95% occupied, maintains a renewal percentage above 70%, and is located in a sub-market with high barriers to entry in which we can continue to push revenue. We anticipate refinancing of The Point at Alexandria in the summer of 2016. The current loan which matures on November 1, 2016 can be prepaid without penalty starting on August 1, 2016. The property is 96% [JG1]occupied, maintains a renewal percentage above 70%, and is located in a DC suburb that we feel will continue to demonstrate strong rental growth. Therefore, we can take advantage of the existing capital markets to refinance the asset, which should yield a significant tax efficient distribution to investors.

With the large scale company-wide implementation of the Realpage property management software platform complete, we have overseen the successful roll-out of the YieldStar revenue management system. YieldStar leverages the best practices and experiences of other industries, such as the airline, hotel, and travel industry, and applies them to the multifamily apartment market. YieldStar’s Price Optimizer is a valuable tool to assist our property managers and asset managers in determining the most optimal rent pricing at each of our properties. Thus far YieldStar has enhanced rental revenues and minimized vacancy throughout the portfolio. Portfolio wide occupancy was 96% in 2015, compared to 94% in 2014.

The implementation of Yieldstar is coupled with our new top-down marketing and utility initiatives throughout the portfolio. The new marketing initiatives have improved our branding and customer experience with the intent to further boost revenue through increased yield on traffic and tenant retention. We have enhanced property websites, improved Google search engine optimization, and implemented analytics for lead management. We have also implemented several utility initiatives with an eye toward further reduction of our portfolio expense margin. We introduced Brightpower Energy Scorecards (http://www.brightpower.com/) which tracks utility usage across the portfolio and flags any anomalous usage behavior both compared to the subject property’s historical usage and comparable property usage in the sub-market. The real-time diagnostics provided by Energy Scorecards will facilitate quick management decisions to minimize any utility expense liability and suggest targeted repairs when warranted.

We have also engaged Every Watt Matters (http://www.everywattmatters.com/) to conduct free lighting audits and we will embark on LED lighting retrofit programs with a sub-two year payback on investment through utility savings and reduced equipment needs. Thirdly, we retained Utilisave (http://www.utilisave.com/) to review all property utility bills both retroactively to enroll us in incentive programs that had been available at the time, and forward looking so that we can benefit from any currently available programs. These improved management processes demonstrate our continually evolving asset management analytics platform, which enhances expense management and revenue optimization throughout the portfolio in order to maximize distributable cash flow to our investors.

Multifamily Market Update*:

The multifamily sector has continued to outperform expectations and remains a strong investment choice. According to Yardi Research, multifamily is poised to continue on its growth path and yield a projected 4.6% rent growth nationally, far outpacing the 2.8% eight-year average. This projected rent growth

http://www.brightpower.com/

http://www.everywattmatters.com/

http://www.utilisave.com/





3

is supported by a national vacancy rate that remains low at 4.5%. The multifamily market will continue to benefit from strong demographic and social trends. Through the end of this decade, Millennials, defined as the 73 million young adults who are currently 18-34 years old, will continue to advance into what’s traditionally been considered the prime renter-age cohort, while improving job prospects support an uptick in household formation. “Baby Boomers”, on the other hand, are not only living longer than previous generations but are increasingly likely to rent, for reasons of finance, lifestyle, and convenience.

Homeownership continues to drift lower and is currently at 63.4%, the lowest level since 1967, as a

result of student debt burden and unaffordable mortgage terms. The decline in homeownership rates has been primarily concentrated among Millennials who put a high value on amenities, mobility and flexibility. 78% of households under the age of 25 are renters and 61% of households under the age of 35 are renters. Household formation is set to rise for the rest of the decade due to the growing number of Millennials and the recovery of the job market. We expect household formation to average more than 1 million annually over the next several years, producing robust demand for rental housing.

Since 2008, the year Lehman Brothers collapsed and home prices dropped precipitously, there has

been a steady increase in the number of people ages 20 to 34 renting instead of buying homes. About 875,000 more households are now made up of young adult renters than would have existed if the pre-2008 era trend had held steady. As the economy slowly improves and job growth picks up steam, the millions of Americans who shared living quarters with friends or nestled in their parents’ basements to ride out the economic shock waves from the Great Recession are beginning to branch out on their own; but they are still largely shut out of the mortgage market. Young adults are likely not going to go from living with their parents to buying a home, they’re going to want to rent an apartment. A higher percentage of Millennials have taken on student debt, so affordability of for-sale housing is in question because they cannot afford to take on a home mortgage, which puts them in the rental pool.

*Data from CNBC “Homeownership rate drops to 63.4%, lowest since 1967”July 28, 2015, The New York Times “No Picket Fence Younger Adults Opting to Rent,”, Marcus and Millichap 2016 National Apartment Report, Yardi Matrix 2016 Outlook, Pierce Eisien: US Multifamily Report, Axiometrics Mid-Year Apartment Market Seminar, and the US Census Bureau Washington DC Metro Multifamily Market Update*:

As the top migratory city in the U.S., the Washington DC Metro Area has a 4.1% unemployment rate which is the lowest of the large U.S. Metropolitan areas and 90 basis points lower than the National average unemployment rate of 5.0%. According to Nielsen, Washington DC has the highest concentration of Millennials earning at least $100,000 annually of any major city in the country. With Government as the main demand driver, Washington DC attracts a transient and affluent work force that has produced a large pool of highly compensated “renters by choice.” Due to a confluence of factors, including the Millennial demographic bulge and the increased preference to rent rather than own following the national housing collapse, there is an extremely large cohort of renters expected to emerge that will increase in size for another decade. To further bolster the appeal of the Washington DC market and the rental demand driven by Millennials, no other metropolitan area has a higher proportion of Millennials relative to the rest of the population than Metro Washington DC. As an added benefit, we believe the upcoming 2016 presidential election will lead to even more robust levels of federal spending this year and beyond, ensuring abundant employment opportunities and further strengthening apartment operations.

According to Marcus and Millichap research, the DC metro market is on pace to achieve positive, single-digit effective rental rates increases for the 14th consecutive year. Following a 2.7% increase in average effective rents in 2015, improvement will continue as District of Columbia asking rents are projected to increase by 3.4% in 2016, with suburban Maryland asking rent increases of 2.4%, and suburban Virginia





4

asking rent increases of nearly 3%. Robust net absorption will top 13,100 rentals this year, pushing vacancy down 30 basis points to 4%. In the previous year, vacancy fell 100 basis points as net absorption outpaced new supply by 5,000 units. Suburban Virginia alone showed 12.5% above average absorption in 2015. These favorable trends are being driven mainly by strong job growth as, according to REIS, 61,800 new jobs were created in the DC MSA in the 12 months ending in November 2015, a 2% increase from the previous year. The Washington Post reported March 14, 2016 that unemployment in the D.C. area “continued to fall in January, with Maryland’s rate dropping below 5.0% for the first time since before the 2008 recession.” Meanwhile, the Bureau of Labor and Statistics reported a seasonally unadjusted unemployment rate of 3.2% in November for Northern Virginia, down from 3.8% one year earlier. *Data from Marcus and Millichap 2016 Washington DC Metro Area Outlook, Bureau of Labor Statistics Unemployment Rate for Large Metropolitan Areas, REIS Observer March 29, 2016

We are confident in our strategy and want to thank all Partners for their continued confidence and support. Best regards, ____________________ __________________ ____________________ Edward S. Pantzer Jason M. Pantzer Jordan M. Pantzer (212) 310-6401 (212) 310-6404 (212) 310-6403 [email protected] [email protected] [email protected] Enclosed please find the following attachments to this report:

1. Panco Strategic Real Estate Fund I, LP Investment Summary Chart



ACTIVE INVESTMENTS – INVESTMENT SUMMARIES

5

ACTIVE INVESTMENTS

INVESTMENT SUMMARIES



ACTIVE INVESTMENTS - INVESTMENT SUMMARIES

ACTIVE INVESTMENTS – INVESTMENT SUMMARIES The Point at Silver Spring

6

THE POINT AT SILVER SPRING, SILVER SPRING, MD Current Status

On February 10, 2016, we added a $25,380,000 Freddie Mac Supplemental Mortgage for The Point at Silver Spring. After successfully implementing a value-add program while maximizing operational efficiencies at the property, The Point at Silver Spring has realized 45% NOI growth since acquisition. The property had $8.5 million in NOI when we bought the property out of bankruptcy in August 2012, and the NOI at its current 2016 run rate is $12.3 million. This increase in NOI has given us the ability to add this $25,380,000 supplemental loan at a floating interest rate of 1 Month LIBOR + 3.48%. At today’s rates, this equates to an effective interest rate of 3.92%. The supplemental loan is coterminous with the 3.44% fixed rate $120,780,000 first mortgage, and the debt service on the supplemental will be interest only until September 1, 2017. The supplemental is an opportunity to take advantage of the capital markets to provide a lump sum, tax deferred distribution for our limited partners. As part of the underwriting process, we received an appraisal for the property. The appraised value of the property is $203 million and the broker opinion of value is $223 million, which represents a 21% to 33% premium, respectively, to our $168 million purchase price. Including the proceeds from the refinancing, the property has distributed 61% of its original equity stake, and first quarter distributions equate to an annualized 22% yield on outstanding equity.

Quarter over quarter Net Operating Income has increased by 18% highlighted by across the board

expense savings. With the property now fully stabilized, expense savings measures have been fully implemented. The Point at Silver Spring realized quarter over quarter expense savings highlighted by a 54% reduction of insurance costs, a 45% reduction of Repairs and Maintenance expense, a 39% reduction of General and Administrative costs, and 24% reduction in property taxes, and a 21.5% reduction of utility costs. Meanwhile, occupancy is above 96% and resident satisfaction is extremely high resulting in renewal rates of 70% which are unprecedented in the Silver Spring market, which is highly competitive and somewhat transient.

The large scale capital improvement projects undertaken at the property, detailed in the Investment

Description section below, are largely complete and residents are very pleased with the improvements. A few smaller projects were completed recently including enhancements to the dog parks, around the perimeter of the building, the addition of select new fitness equipment, the renovation of the bathrooms and lobby on the secondary entrance side of the building, and the installation of new carpet tile in the corridors. We have also added interactive touch screens to the leasing office to enhance the leasing experience and enable prospective residents to fill out electronic lease applications. With the capital improvements at the property mostly completed, we are focused on maximizing distributable cash flow while limiting further capital expenditure at the asset.

Unit renovations continue on turnover and to date we have completed approximately 110 apartment

renovations. When combined with the 318 units the prior owner had renovated, the total number of renovated units is 428 or 48.4% of the total property. We have collaborated with our interior designer to reimagine the interior unit finishes in a more contemporary and widely appealing design with enhanced finishes and fixtures to appeal to the sophisticated renters in the area.

Retail leasing efforts have continued to be successful. Our retail occupancy is now at 94% with only

one 1,387 SF space remaining. Retail occupancy was 68% when we closed on the property in 2012.





7

THE POINT AT SILVER SPRING, SILVER SPRING, MD – (CONTINUED)

Investment Description

Fund I acquired The Point at Silver Spring (formerly known as The Georgian) for $168,000,000 in a joint venture partnership with our second fund, Panco Strategic Real Estate Fund II, LP and Panco Strategic Real Estate Fund II-QP (collectively “Fund II”) and Panco Georgian Co-Investment LP on August 14, 2012.

The joint venture bought the property out of bankruptcy where the debt stack was $215 million and

the lenders took a $47 million loss on the sale plus penalties and interest. The former sponsor was Stellar Management, however, the mezzanine lender controlling the sale was Federal Capital Partners. Pantzer tracked this deal for over 15 years since our management arm, Panco Management, was the 3rd party property manager during GE’s ownership in the 1990s. Pantzer diligently followed the property throughout the bankruptcy process and previously bid very close to our joint venture’s final purchase price but was dramatically outbid by other buyers before successfully buying the property. The property was under contract for sale twice in 2012 at prices that greatly exceed the joint venture’s $168 million purchase price – first for $193 million to Lowe Enterprises Real Estate Group, and then for $173 million to Berkshire Property Advisors.

The bankruptcy situation and deal fatigue by the lenders following two failed sale attempts provided an opportune moment for Fund I, Fund II and Co-Investment to acquire this asset well below replacement cost and at the price where Pantzer had seen value throughout the bankruptcy sale process. Pantzer worked with the United States Bankruptcy Court and Kirkland and Ellis LLP to creatively structure the transaction so as not to incur in excess of $5 million of transfer and recordation taxes. We originally financed this transaction with a 10 year $120,780,000 Freddie Mac first mortgage with a fixed interest rate of 3.44%. The debt service is interest only for 5 years after which the loan payments have 30 year amortization. The financing has been extremely accretive to the deal and has maximized cash flow to finance capital improvements in the first few years of the holding period.

The Point at Silver Spring is a 15-story, 891 unit class B+ two-tower highrise apartment community

with approximately 25,255 square feet of urban retail space and a 594-car two-level subterranean parking garage. The property underwent an extensive $35 million renovation in 2008 that included most of the common area spaces, window replacements throughout the buildings, and the renovation of 318 units to a very high finish level that includes granite countertops, European designer cabinets, contemporary tile flooring and high-end lighting fixtures. The prior sponsor, Stellar Management, massively overspent on the most visible capital improvements, over-leveraged the asset, and operated the property inefficiently to the point of bankruptcy. The property was in receivership for almost three years and bankruptcy for one year during which time operations were neglected resulting in high concessions and vacancies that are not in line with the market. Our business plan has been to operate the property more efficiently to maximize income and to execute a unit interior capital improvement program during the holding period and reposition the property to fill a middle segment of the market between older and brand-new product. This value-add approach allows us to ultimately sell the property based on increased net operating income and an improved physical asset.





8

THE POINT AT SILVER SPRING, SILVER SPRING, MD – (CONTINUED) To date, we have spent approximately $7.6 million [JG2]on the capital improvements at The Point at

Silver Spring. The $2 million renovation of the outdoor plaza between the two buildings is complete. The plaza project included significant structural repairs to the expansion joint under the plaza, which sits over the parking structure and to the parking structure itself, as well as a landscaping overhaul and beautification program that has created a new outdoor amenity space for residents. We improved the upper level of the plaza which is contiguous with the first level of the buildings by adding patio enclosures to the first level apartments that have egress onto the second level of the plaza to improve the desirability of those units. We have also installed a professional grade running track around the second level of the plaza which provides a very unique amenity to our residents that none of the competing communities offer. We completed the renovation of the leasing office and resident services space that has made the point of sale more interactive with leasing prospects and residents. We have also completed the updates to several existing amenity spaces throughout the building including the resident lounge, wi-fi and coffee lounges, and billiards lounge.

The Point at Silver Spring is exceptionally well-located in downtown Silver Spring which is inside the Capital Beltway. The property is located 2 blocks from the Silver Spring Metro station; both the Metro and the Beltway provide convenient access throughout the Washington, DC metro area and it is a short 10 minute metro ride to the center of downtown Washington DC. Silver Spring is arguably the most exciting, revitalized urban core in the Washington, DC metro area. Over the past ten years, Silver Spring has undergone over $1 billion in revitalization efforts and Downtown Silver Spring has been developed into a walkable, mixed-use urban center all within close proximity of the Silver Spring Metro Station, creating a true pedestrian “live/work/play” experience. Silver Spring offers an extensive and impressive list of employers, retailers, dining establishments, nightlife, hospitality and cultural venues, many of which are located at the Downtown Silver Spring Shopping Center. This complex spans over 22 acres and consists of significant retail, office and residential mixed-use space.

Silver Spring is in Montgomery County which is one of the most desirable areas in the state of Maryland, evidenced by its affluent demographics and solid apartment fundamentals. As of the time of acquisition, within a five-mile radius of The Georgian, the 2013 average annual household income was $112,167, which is 61% higher than the national average, and there is significant demand for luxury rental housing. Montgomery County is home to a multitude of federal government agencies and numerous corporate headquarters, providing various employment opportunities. The largest employers in Silver Spring include Kaiser Permanente (181,900 employees), Lockheed Martin (132,000 employees) and Marriott International (129,000 employees). Montgomery County is the epicenter for biotechnology in the Mid-Atlantic region, and the third largest biotechnology cluster in the US. Referred to as “DNA Alley,” the I-270 Corridor connects Frederick County with the nation’s capital, and hosts a multitude of highly-acclaimed biotechnology and pharmaceutical companies, federal government laboratories, and educational institutions.





9

THE POINT AT SILVER SPRING, SILVER SPRING, MD – (CONTINUED)

Deal Structure at Acquisition

Purchase Price: $168,000,000Capital for Renovations, Reserves & Other Deal Expenses: $7,780,000Total Initial Capitalized Basis: $175,780,000PSREF I's Initial Equity Investment: $5,000,000PSREF II's Initial Equity Investment: $25,000,000Panco Georgian Co-Investment LP's Initial Equity Investment: $25,000,000First Mortgage Debt: $120,780,000

Deal Level Equity Structure

PSREF I Total Equity

Invested Distributions

August 14, 2012 ($5,000,000) $ - March 5, 2013 $100,000 May 30, 2013 $50,000 May 30, 2014 $100,000 June 30, 2014 $7,570 September 4, 2014 $30,000 December 22, 2014 $107,000 March 5, 2015 $60,000 April 17, 2015 $30,000 June 4, 2015 $60,000 July 1, 2015 $30,000 September 1, 2015 $60,000 October 5, 2015 $30,000 December 14, 2015 $75,000 February 12, 2016 $2,220,000 April 6, 2016 $113,000 Total to Date ($5,000,000) $3,072,570

The property is secured by a $120,780,000 First Mortgage from Freddie Mac due in September 2022.

The loan has a fixed interest rate of 3.44% and is interest only through September 1, 2017 after which the loan payments have 30 year amortization. The property is also secured by a $25,380,000 Supplemental Mortgage from Freddie Mac that is coterminous with the first loan. The supplemental loan has a floating interest rate of 1 Month LIBOR + 3.48% and is interest only through September 1, 2017 after which the loan payments have 30 year amortization.





10

THE POINT AT SILVER SPRING, SILVER SPRING, MD – (CONTINUED) Debt Structure Upon Completion of Supplemental Financing – February 10, 2016:

Before Supplemental:

Balance Term Maturity IO PeriodEnd of IO Period

Fixed/ Floating? Index Spread Rate Lender Notes

Senior Loan $120,780,000 10 Years 9/1/2022 5 Years 9/1/2017 Fixed N/A N/A 3.44%Freddie Mac

After Supplemental:

Balance Term Maturity IO PeriodEnd of IO Period

Fixed/ Floating? Index Spread Rate Lender Notes

Senior Loan $120,780,000 10 Years 9/1/2022 5 Years 9/1/2017 Fixed N/A N/A 3.44%Freddie Mac

Supplemental $25,380,000 ~6.5 Years 9/1/2022 ~1.5 Years 9/1/2017 Floating1 Mo. LIBOR 3.48% 3.92% at today's rates

Freddie Mac

Co-Terminus with 1st

Total $146,160,000 9/1/2022 9/1/2017 3.52% at today's rates [JG3]




ACTIVE INVESTMENTS – INVESTMENT SUMMARIES The Point at Annapolis

11

THE POINT AT ANNAPOLIS, ANNAPOLIS, MD Current Status

The Point at Annapolis continues to make steady distributions to Fund I. The property has distributed

25% of its original equity stake, and first quarter distributions equate to an annualized 10% yield on outstanding equity. Effective Gross Income at the property has increased more than 3.7% on a year over year basis, while Net Operating Income is up over 5% from the previous year. The combination of resident retention and new leasing efforts has resulted in strong occupancy. We have focused heavily on marketing to military personnel for the past few months. Our staff has reached out to all of the local military bases to meet with their heads of housing to promote the property. Another successful leasing strategy has been collaboration with local temporary housing companies, since Annapolis is a somewhat transient renter market.

We are currently considering marketing for sale The Point at Annapolis because the limited supply

Annapolis sub-market has demonstrated significant investor demand from institutional, 1031-exchange and international buyers. We had previously run a marketing process for the asset in the second half of 2015 but ultimately decided to hold onto the asset after we didn’t receive an offer that matched what we deemed to be acceptable. With the asset’s continued operational success, it will be accretive to continue to own and operate this asset should bids again not meet our sale criteria. The property is over 95% occupied, maintains a renewal percentage above 70%, and is located in a sub-market with high barriers to entry in which we can continue to push revenue.


Fund I acquired The Point at Annapolis (formerly known as 1901 West) for $68,000,000 in a 50/50

joint venture partnership with our second fund, Panco Strategic Real Estate Fund II, LP and Panco Strategic Real Estate Fund II-QP (collectively “Fund II”) on March 7, 2012. The seller was a joint venture between Boston Capital and Wood Partners. Boston Capital is one of the nation’s leading real estate financing and investment firms, with multifamily housing and commercial holdings in 49 states and Wood Partners is an experienced developer and has developed and constructed virtually every type of multifamily and mixed-use residential product comprising 40,000+ homes. Boston Capital and Wood Partners sold the property to our joint venture after their original condo sales business plan failed, their previous contract to sell the property to JP Morgan for $86,250,000 fell through, they fired their two previous brokerage firms, and their major international institutional investor required them to sell the property and return their capital. The dissolution of the seller’s partnership provided a unique opportunity to acquire this asset well below replacement cost.

We financed this transaction with a 10 year $51,986,000 Freddie Mac first mortgage with a fixed

interest rate of 3.98%. The debt service is interest only for 5 years through April 1, 2017, after which the loan payments have 30 year amortization. This financing is extremely accretive to the investment.

The Point at Annapolis is a 300 unit Class A apartment community with approximately 19,211 square

feet of retail space and national tenants such as Starbucks. The property, which was originally built as a condo by the seller, was completed in 2007 and has high-end finishes, including 9’ ceilings, granite countertops and stainless steel appliances, as well as premier community amenities that strongly position the property for continued success within the market.





12

THE POINT AT ANNAPOLIS, ANNAPOLIS, MD – (CONTINUED)

The Point at Annapolis is exceptionally well-located. Situated less than 2 miles from historic downtown Annapolis, which is the state capital of Maryland, and proximate to major commuter arteries that include West St., U.S. Route 50 and I-97, The Point at Annapolis provides convenient access throughout Anne Arundel County, as well as to Washington, DC and Baltimore. The Historic Downtown Annapolis waterfront is immediately accessible from the property via West Street, which is the main artery. In addition to the retail tenants at The Point at Annapolis, which include Starbucks and Sylvan Learning Systems, there is a rich amenity base with over 7.2 million square feet of retail within a 5-mile radius of the property, including the high-end Annapolis Town Center which is located 1 mile from the property and features such retailers as Whole Foods, Target, Brooks Brothers, Bed Bath & Beyond, Talbots, Restoration Hardware and Lulu Lemon.

The Point at Annapolis benefits from the economic growth spurred by the massive influx of jobs to

Anne Arundel County, specifically Fort Meade, as part of the Department of Defense’s Base Realignment and Closure (BRAC) initiative. The massive employment influx at Fort Meade is bolstering the local economy and creating a multiplier effect that is expected to generate 2 private sector jobs for every on-base job when defense contractors, the supply chain, and retail and consumer businesses supported by those workers are considered. The property also benefits from its close proximity to the robust economies of Washington, DC and Baltimore which drive the significant luxury rental housing demand in Annapolis. As the state capital of Maryland and the home of the United States Naval Academy, public entities in Annapolis employ over 24,000 people. The City of Annapolis is very protective of its historic roots and severely restricts any new multifamily residential development within its limits, ensuring that there will be very limited new product entering the market. The average household income in Anne Arundel County is over $100,000 and there is significant demand for luxury rental housing.

Deal Structure at Acquisition

Purchase Price: $68,000,000Capital for Renovations, Reserves & Other Deal Expenses: $2,640,824Total Initial Capitalized Basis: $70,640,824PSREF I's Initial Equity Investment: $9,327,412PSREF II's Initial Equity Investment: $9,327,412First Mortgage Debt: $51,986,000





13

THE POINT AT ANNAPOLIS, ANNAPOLIS, MD – (CONTINUED)




March 7, 2012 ($9,327,412) $ - April 18, 2012 $221,842 June 19, 2012 $100,000 July 31, 2012 $50,000 August 24, 2012 $75,000 September 28, 2012 $50,000 October 25, 2012 $50,000 November 26, 2012 $100,000 December 24, 2012 $50,000 January 29, 2013 $75,000 February 26, 2013 $75,000 March 28, 2013 $75,000 May 30, 2013 $75,000 June 28, 2013 $75,000 August 28, 2013 $50,000 September 24, 2013 $25,000 October 25, 2013 $25,000 November 25, 2013 $25,000 December 31, 2013 $25,000 March 31, 2014 $25,000 April 25, 2014 $75,000 May 23, 2014 $50,000 June 30, 2014 $50,000 August 28, 2014 $50,000 September 29, 2014 $50,000 October 29, 2014 $75,000 November 26, 2014 $50,000 January 30, 2015 $50,000 February 27, 2015 $25,000 March 31, 2015 $50,000 May 29, 2015 $50,000 June 30, 2015 $25,000 July 30, 2015 $50,000 August 31, 2015 $25,000 September 29, 2015 $50,000 October 30, 2015 $50,000 November 30, 2015 $50,000 December 9, 2015 $50,000 April 6, 2016 $175,000 Total to Date ($9,327,412) $2,296,842

PANCO STRATEGIC REAL ESTATE FUND I, LP & I-QP



ACTIVE INVESTMENTS – INVESTMENT SUMMARIES The Point DC Portfolio

14

THE POINT DC PORTFOLIO (MAGAZINE HOLDINGS, LLC)

WASHINGTON, DC METRO AREA

Portfolio Summary

# of Units

The Point at Alexandria Alexandria VA 1990 532The Point at Bull Run Manassas VA 1986 408The Point at Leesburg Leesburg VA 1986 134The Point at Dulles Herndon VA 2000 328The Point at McNair Farms Herndon VA 1991 283The Point at River Ridge Ashburn VA 1991 467The Point at Germantown Germantown MD 1990 218The Point at Watkins Mill Gaithersburg MD 1975 210Portfolio Total/Avg -- -- 1990 2,580

Property City State Yr. Built

Current Status

The portfolio is performing very well with rising net effective rents and occupancy holding steady above 96%. Leasing activity has remained strong throughout the portfolio as a result of our recent conversion to Yield Star revenue management. The markets where the portfolio is located are extremely competitive and daily supply and demand driven pricing adjustments have been well received by the market resulting in more leases and higher occupancy at optimized rental rates. The portfolio has distributed 56.5% of its original equity stake, and first quarter distributions equate to an annualized 20% yield on outstanding equity. Effective Gross Income at the property has increased more than 2.7% on a year over year basis, while Net Operating Income is up over 3.7% from the previous year. We anticipate refinancing The Point at Alexandria in the summer of 2016. The current loan which matures on November 1, 2016 can be prepaid without penalty starting on August 1, 2016. The property is 96% occupied[JG4], maintains a renewal percentage above 70%, and is located in a DC suburb that we feel will continue to demonstrate strong rental growth. Therefore, we can take advantage of the existing capital markets to refinance the property, which should yield a significant distribution to investors.

We have spent nearly $10.9 million [JG5]of our $18.6 million value-add capital improvement budget

on interior and exterior property improvements. We have completed a second round of clubhouse, amenity space and leasing office renovations at several of the properties and have streamlined the leasing offices to provide a more contemporary peer to peer sales environment that takes advantage of new leasing technology such as iPad leasing apps.





15


WASHINGTON, DC METRO AREA - (CONTINUED) To date we have renovated 596[JG6] units, including 90 renovated units at The Point at River Ridge, which was sold. The renovations include new kitchens that feature upgraded cabinets and GE CleanSteel appliances, as well as designer lighting throughout the apartments and renovated bathrooms. We have now installed professionally interior designed model apartments at 7 of the properties to appeal to the sophisticated renters in the market. We have introduced a “Platinum Package” at The Point at Dulles and The Point at Alexandria. The Platinum Package offers updated brushed nickel hardware and fixtures instead of the older brass hardware in units that otherwise don’t require renovations. The Platinum Package makes the units more appealing to rental prospects and enables us to achieve additional premium rents on these units. We are well positioned to appeal to various levels of prospective renters. Price conscious customers tend to rent un-renovated units, while more affluent customers tend to rent the renovated and premium units. For renovations going forward we can also mix-and-match upgrades that appeal to certain renters. For instance, some renters may like GE CleanSteel appliances, and others may prefer hardwood floors and be agnostic to whether the appliances are updated.

Many of the planned property improvements have been completed. We enhanced the entrances of several of the clubhouses by adding concrete pavers and new exterior light fixtures. Inside the clubhouses, we repainted the walls and installed premium flooring including wood floors and our signature “Point” blue carpeting. Clubhouses also received new light fixtures, artwork and furniture in both the amenity and leasing spaces. The improvements to these highly visible front-of-the-house spaces are beneficial for marketing and will drive leasing activity. In addition to the visible property improvements, we have focused on improving systems at the properties with several life-safety system upgrades including new fire suppression and alarm systems. We are also programmatically replacing Hydrotherm units which provide heat and hot water to the apartments with modern, energy-efficient equipment. Property-wide window and sliding glass door replacements have been completed at five of the properties for a total cost of approximately $2 million. Window replacements are highly beneficial to properties of this vintage from both an aesthetic standpoint as well as by greatly reducing the energy costs for residents who would then be more included to pay higher rents. We continue to focus on branding the properties through capital improvements including a portfolio-wide program to paint the exterior doors in our signature “Point” blue and replace dated looking hardware with crisp new brushed nickel hardware and unit signage. We have also painted several property exteriors and added new detailing such as awnings and shutters to improve the curb appeal of the properties.

The properties continue to focus on resident retention and attracting new tenants. These methods

include innovating new features and community amenities, beautifying outdoor spaces, installing interactive media stations, implementing package notification systems in club rooms and introducing pet-centric amenities. We have initiated property level social media campaigns which attract a savvy client base and improve the online visibility of the assets. Tenants are reminded to “like” a property and in doing so are given access to local deals and promotions. The establishment of a social media platform is essential for the increasingly tech savvy renter.

There is continued strong demand for well-located renovated product which offers a comparative value to newer Class A apartments. Millions of Gen-Y workers and Millennials demand the flexibility of rental housing and as these age groups grow out of roommate situations, they are increasingly looking for their own[JG7] apartments, which is an additional driver of demand. The unique position in the market that we fill by providing both renovated and amenitized product in premier locations is very appealing to this demographic who recognizes the value provided and is willing to pay a premium for it.





16


WASHINGTON, DC METRO AREA – (CONTINUED)


Fund I acquired The Point DC Portfolio (Magazine Holdings LLC) for $460,000,000 in 50/50 joint

venture partnership with Dune Real Estate Partners LP on March 1, 2011; this was the Fund’s second 50/50 joint venture partnership with Dune. The Point DC Portfolio consists of 8 institutional quality apartment communities totaling 2,580 units located in the Northern Virginia and Maryland Suburbs of Washington, DC. The portfolio is of institutional quality and has previously been owned/managed by RREEF, Morgan Stanley, and the Town & Country REIT. The seller was RREEF, which is the real estate investment business of Deutsche Bank’s Asset Management Division. RREEF sold the portfolio to our joint venture at over an $80 million loss due to RREEF’s liquidity needs in their global fund.

The March 1, 2011 acquisition was originally structured as an acquisition of membership interests

rather than a fee simple acquisition of the 8 individual properties to realize significant savings in closing costs and to avoid triggering real estate tax reassessments as is typically the case upon the sale of a property. The joint venture acquired the portfolio subject to an extensively modified $390,000,000 securitized loan with a fixed interest rate of 5.47% that was originated in 2006 by Morgan Stanley with maturity in December 2011. The assumed loan was originally $410,000,000, and our joint venture paid down the loan by $20,000,000 to $390,000,000 at closing to de-lever the assets and provide for certain loan modifications including a waiver of the prepayment penalty which was in excess of $20 million at the time of closing. Our joint venture negotiated two 1-year loan extension options with the lender resulting in an extended loan maturity date of December 2013 to provide for a flexible refinancing strategy and timing. The loan carried a fixed interest rate of 5.47% with interest only debt service for the duration of the loan. Our joint venture negotiated flexible terms in conjunction with the loan extension to allow us to time the capital markets to take advantage of the best available financing and refinance during the extension term with no prepayment penalty.

On January 31, 2014, Fund I sold The Point at River Ridge located in Ashburn, Virginia for $89.5 million which resulted in an approximate $12.65 million investment level gross profit to our 50%/50% joint venture with Dune Real Estate Partners. The purchaser was an affiliate of the General Motors pension fund which is reflective of the institutional quality of the asset. Fund I’s initial equity investment of approximately $6.7 million resulted in a total investment level return of approximately $13 million with an approximate gross profit of $6.3 million, a gross IRR of 25.4% and a gross profit multiple of 1.9x. These returns were realized over our short 2 year and 10 month ownership period. The investment level returns net of carried interest are approximately a net profit of $5.1 million, a net IRR of 20.5% and a net profit multiple of 1.76x. The Point at River Ridge is one of the eight properties the Fund purchased for $460 million from RREEF in 2011 in a 50%/50% joint venture with Dune Real Estate Partners, and the first of this pool to be sold. The Point at River Ridge encompasses 467 of the 2,580 unit asset pool. This was a highly successful transaction and an example of the strong acquisition, operational, financing and sale efficiency that we look to achieve.

The business plan for The Point DC Portfolio is to execute an approximately $18.6 million unit

interior and exterior capital improvement program during the holding period and reposition the properties to fill a middle segment of the market between older and brand-new product where there is currently a dearth





17


WASHINGTON, DC METRO AREA – (CONTINUED)

of supply. At this writing, we have spent approximately $10.9 million. This value-add approach allows us to maximize the stable property financials already in place and ultimately sell the Properties based on increased net operating income with improved physical assets and attractive in-place assumable financing.

Deal Structure at Acquisition – March 1, 2011

Purchase Price: $460,000,000Capital for Renovations, Reserves & Other Deal Expenses: $10,340,636Total Initial Capitalized Basis: $470,340,636Fund I's Approximate Initial Equity Investment: $40,170,318Dune's Approximate Initial Equity Investment: $40,170,318Modified First Mortgage Debt: $390,000,000Loan Maturity with Extension Options: December 2013Interest Rate: 5.47% Interest Only for Term

Deal Structure at First Refinancing – October 7, 2011

Purchase Price: $460,000,000Capital Reserves, Closing Costs & Working Capital: $21,890,124Total Peak Capitalized Basis: $481,890,124Fund I's Approximate Peak Equity Investment: $51,605,062Dune's Approximate Peak Equity Investment: $51,605,062Freddie Mac First Mortgage Debt: $328,680,000Malkin Strategic Capital & State of Florida Pension Fund: $50,000,000Loan Maturities: November 2016 and November 2018Blended Fixed Interest Rate: 4.3% Interest Only for 3 to 5 Years





18

THE POINT DC PORTFOLIO (MAGAZINE HOLDINGS, LLC) WASHINGTON, DC METRO AREA – (CONTINUED)

Debt Structure at Second Refinancing – June 10, 2015

Property Name Total Debt Term I/O Maturity Type Interest Rate

Point DC Portfolio - 6 Refinanced Properties Freddie Mac First Mortgage Debt

$244,800,000 10 5 7/1/2025 Floating 1 Mo. LIBOR + 2.02%

The Point at AlexandriaFreddie Mac First Mortgage Debt

$80,292,427 5 3 11/1/2016 Fixed 3.41%

[JG8]





19


WASHINGTON, DC METRO AREA – (CONTINUED) Deal Level Equity Structure

PSREF I Total Equity Invested Distributions March 1, 2011 ($40,170,318) $ - March 31, 2011 ( $1,000,000) $ - August 5, 2011 ( $3,000,000) $ - October 7, 2011 ( $7,434,744) $ - November 15, 2011 $2,500,000 December 2, 2011 $500,000 January 10, 2012 $800,000 February 28, 2012 $350,000 March 12, 2012 $500,000 April 16, 2012 $350,000 May 21, 2012 $350,000 June 21, 2012 $750,000 September 21, 2012 $250,000 October 26, 2012 $350,000 December 18, 2012 $250,000 January 30, 2012 $150,000 January 10, 2012 $800,000 February 26, 2013 $400,000 March 28, 2013 $600,000 May 21, 2013 $250,000 June 7, 2013 $700,000 August 28, 2013 $200,000 September 24, 2013 $300,000 October 25, 2013 $300,000 November 26, 2013 $500,000 December 26, 2013 $425,000 January 31, 2014 $12,384,409 February 24, 2014 $450,000 March 19, 2014 $150,000 April 25, 2014 $150,000 May 23, 2014 $200,000 June 27, 2014 $350,000 August 28, 2014 $350,000 September 29, 2014 $250,000 November 25, 2014 $400,000 February 27, 2015 $150,000 July 9, 2015 $1,000,000 August 31, 2015 $400,000 September 29, 2015 $400,000 October 30, 2015 $400,000 December 1, 2015 $800,000 February 12, 2016 $300,000 April 6, 2016 $900,000 Total to Date ($51,605,062) $29,161,409




ACTIVE INVESTMENTS – INVESTMENT SUMMARIES The Point at Laurel Lakes

20

THE POINT AT LAUREL LAKES, LAUREL, MD Current Status

The Point at Laurel Lakes continues to reap the benefits of the capital improvement programs that

were put in place. The favorable market response of these programs has enabled The Point at Laurel Lakes to approach and in some cases even exceed rents in the newer product in the market. The property is over 97% occupied, which is a dramatic increase over the 87% occupancy that was in-place when we bought the property in December 2010. Net Operating Income since inception has increased by 48% from $2.1 million to over $3.1 million on an annual run rate. Additionally, Year over Year Effective Gross Income has increased 4.4%, while Year over Year Net Operating Income has increased by 6.1%. The property has distributed 31% of its original equity stake, and first quarter distributions equate to an annualized 5% yield on outstanding equity, without factoring in the effects of amortization on the existing loans.

We have completed approximately $3.3 million of capital improvement work including property-wide

window and sliding glass door replacements and exterior painting. We have renovated 241 of the 308 total [JG9]apartments with new kitchens that feature upgraded cabinets and GE CleanSteel appliances, as well as designer lighting throughout the apartments and renovated bathrooms. The occupied apartments, including the unrenovated apartments, are achieving 5% average rent increases on turnover and resident retention remains extremely high. We have now completed the renovation of the clubhouse amenity space and leasing office. The renovated clubhouse features more contemporary furnishings and a larger fitness center with all new equipment. We have received extremely positive feedback from residents, especially regarding the fitness center and we believe these improvements have helped us increase resident retention. The leasing office has been remodeled and opened up to feel more inviting to prospective tenants. We have added a coffee bar in the waiting area and meeting table style desks for leasing consultants.


The Point at Laurel Lakes is a 308 unit luxury garden apartment community. Built in 1987, the ten

acre property has been improved with 12 three story residential buildings and a clubhouse building that contains a leasing office and a fitness center. The Point at Laurel Lakes is strategically located between Washington, DC and Baltimore along the I-95 Corridor with immediate access to major employment centers, premium shopping destinations, and an abundance of recreation and entertainment options. The Point at Laurel Lakes is positioned for continued strong demand growth and sustained performance from an expanding local economy, including the Base Realignment and Closing (BRAC).

Nearby Ft. Meade has become a focal point for our national defense. Fort Meade is Maryland’s largest

employer, with a 5,400-acre campus and the 4th largest Army installation in the United States. Fort Meade has become a nucleus of massive growth due to the expansion of the NSA and US Cyber Command. It is the epicenter of the greatest economic expansion in Maryland since World War II, sparked by Base Realignment and Closure’s (BRAC) relocation of the Defense Information Systems Agency, the new headquarters of U.S. Cyber Command, and a $5.2 billion expansion of the NSA. Maryland, as a state, receives a vast amount of job opportunities from these agencies. Over the past ten years, the local employment base in Odenton has grown from 34,000 to 56,800 and it is expected to top 70,000 by 2020. For every new direct defense employee at Fort Meade, it is estimated, when considering defense contractors, supply chain, and supporting retail and consumer businesses, that two additional private sector jobs are created to support them. Nearly 100 defense contractors





21

THE POINT AT LAUREL LAKES, LAUREL, MD – (CONTINUED)

Fund I acquired the property on December 10, 2010 for $42.9 million from Eaton Vance and assumed a $27.6 million Fannie Mae mortgage with a fixed interest rate of 5.5%, approximately 20 months of interest only debt service remaining and 30 year amortization thereafter maturing in August 2020. On April 16, 2012, we successfully closed on a $3,459,000 supplemental financing from Fannie Mae and two years later, on April 25, 2014 we closed on a second supplemental financing from Fannie Mae for an additional $2,511,600. The supplemental mortgages have fixed interest rates of 4.63% and 4.89%, respectively, both of which are lower than the first mortgage fixed interest rate and results in a reduced blended fixed cost of capital of 5.36%. The second and third mortgages are coterminous with the first mortgage and all mature in August 2020.

Deal Structure at Acquisition – December 10, 2010

Purchase Price: $42,900,000Initial Capital Reserves & Closing Costs: $1,279,247Total Initial Capitalized Basis: $44,179,247PSREF I's Initial Equity Investment: $16,621,447Fannie Mae First Mortgage Debt: $27,557,800

Deal Structure at First Refinancing – April 16, 2012

Total Capitalized Basis as of April 16, 2012: $46,506,181PSREF I's Approximate Equity Investment: $15,489,381Fannie Mae First Mortgage Debt: $27,557,800Fannie Mae Second Mortgage Debt: $3,459,000

Debt Structure After Second Refinancing – April 25, 2014

Mortgage 3/31/16 Debt Balance Term IO Maturity Type Interest RateFannie Mae First Mortgage Debt $26,091,017 7 Years 2 Years 9/1/2020 Fixed 5.50%Fannie Mae Second Mortgage Debt $3,251,368 7 Years 2 Years 9/1/2020 Fixed 4.63%Fannie Mae Third Mortgage Debt $2,437,499 7 Years 2 Years 9/1/2020 Fixed 4.89%Total: $31,779,884 5.36%





22

THE POINT AT LAUREL LAKES, LAUREL, MD – (CONTINUED) Deal Level Equity Structure



December 10 , 2010 ($16,621,447) $ - December 31, 2010 ( $78,461) $ - January 31, 2011 ( $394,473) $ - February 28, 2011 ( $50,000) $ - March 31, 2011 ( $90,000) $ - April 30, 2011 ( $10,000) $ - May 31, 2011 ( $145,000) $ - June 30, 2011 ( $190,000) $ - July 14, 2011 ( $500,000) $ - August 11, 2011 ( $75,000) $ - August 26, 2011 ( $65,000) $ - November 22, 2011 ( $70,000) $ - December 9, 2011 ( $100,000) $ - December 29, 2011 ( $100,000) $ - April 16, 2012 $3,000,000 February 26, 2013 $50,000 March 28, 2013 $50,000 April 29, 2013 $25,000 May 30, 2013 $50,000 June 28, 2013 $50,000 August 28, 2013 $25,000 September 24, 2013 $25,000 October 25, 2013 $50,000 December 31, 2013 $25,000 March 31, 2014 $50,000 April 29, 2014 $2,000,000 May 23, 2014 $25,000 February 27, 2015 $25,000 March 31, 2015 $25,000 April 9, 2015 $3,000 June 30, 2015 $25,000 September 29, 2015 $25,000 October 30, 2015 $25,000 April 6, 2016 $150,000 Total to Date ($18,489,381) $5,703,000





23

THE POINT AT LAUREL LAKES, LAUREL, MD – (CONTINUED)

The property is secured by coterminous first, second and third mortgages from Fannie Mae due in

August 2020. The $27,557,800 First Mortgage loan has a fixed interest rate of 5.5% and is interest only through September 1, 2012 after which the loan payments have 30 year amortization. The $3,459,000 second mortgage has 30 year amortization and a fixed interest rate of 4.63%. The $2,511,600 third mortgage has 30 year amortization and a fixed interest rate of 4.89%. The blended fixed cost of capital is 5.36%. As of December 31, 2015, the total debt has amortized down to $31,870,318.



REALIZED INVESTMENTS - INVESTMENT SUMMARIES 24

REALIZED INVESTMENTS

INVESTMENT SUMMARIES



REALIZED INVESTMENTS - INVESTMENT SUMMARIES The Grove at Arlington

25

REALIZED INVESTMENTS – INVESTMENT SUMMARIES

THE GROVE AT ARLINGTON, ARLINGTON, VA

Realized on February 1, 2010 Transaction Description

Fund I, in 50/50 joint venture partnership with Malkin properties, made an $8 million preferred equity

investment in the Grove at Arlington which is a 190 unit mid-rise luxury condo and apartment community in Arlington, VA. The property is extremely well located just minutes from downtown Washington, DC, the White House, the US Capitol, the Pentagon, Crystal City, Arlington National Cemetery, I-395, Route 1 and Reagan National Airport. Due to financial market conditions, The Athena Group (“the Sponsor”) was unable to refinance their first mortgage debt with Corus Bank on the then remaining 91 units despite having over $28 million of equity invested in the property. The investment thesis provided for the continued sale of the 91 remaining apartment units as condos by the Sponsor during the term of our investment for a highly opportunistic risk adjusted return. Fund I’s preferred equity investment was structured with a 10% current return with an accrued lookback to an 18% return plus origination and exit fees. We increased Fund I’s rate of return from 18% to 23% during the term of the preferred equity investment because the Sponsor triggered certain covenants in the preferred equity documents. Fund I was able to privately negotiate this transaction before it was ever marketed to a broader group of investors, thereby enabling Fund I to dictate its terms and conditions.



Invested Distributions Net Profit

Returned (Equity

Invested) August 5, 2008 ($ 4,000,000) $ - ($ 4,000,000) February 5, 2009 $ 230,000 ($ 3,770,000) October 14, 2009 $ 1,400,000 ($ 2,370,000) November 6, 2009 $ 1,100,000 ($ 1,270,000) March 2, 2010 $ 2,550,932 $ 1,280,932

Realized Returns

Deal Level

Limited Partners

Equity Investment: $ 4,000,000 $ 4,000,000 Profit: $ 1,280,932 * $ 1,000,000 ** IRR: 25.1% 19.9% Total Return Multiple: 1.32x 1.25x

*Gross profit before deal level expenses, reserves and Carried Interest to General Partner. **Net profit after deal level expenses, reserves and Carried Interest to General Partner. Note: Numbers are not final and are subject to change



REALIZED INVESTMENTS - INVESTMENT SUMMARIES The Point at Fairfax

26


THE POINT AT FAIRFAX, FAIRFAX, VA

Realized on September 30, 2010 Transaction Description

The Point at Fairfax is a 364 unit luxury garden apartment community. Fund I acquired the property

from Post Properties, a large NYSE REIT, on July 15, 2009 for $57,500,000. The business plan to add value to the property through an extensive capital improvement program that included interior unit renovations and exterior enhancements was significantly realized and premium rents were regularly achieved on the improved units. Fund I sold the Point at Fairfax to Home Properties, a large NYSE REIT, on September 30, 2010 for $70,100,000.

Built in 1990 by Post Properties, the sixteen acre property has been improved with fifteen three story

residential buildings, eight free-standing detached garage buildings, a leasing office, and a clubhouse building. The Point at Fairfax is located in Fairfax County, VA, which is the largest and one of the wealthiest counties in Northern Virginia and the Washington, DC metropolitan area, and serves as the backbone of economic activity within Northern Virginia. The Point at Fairfax has immediate access to key transportation routes, major employment centers, premium shopping destinations, nationally recognized public schools and an abundance of recreation and entertainment options.




Returned (Equity

Invested) July 15, 2009 ($13,300,000) $ - ($13,300,000) October 14, 2009 $ 100,000 ($13,200,000) November 6, 2009 $ 100,000 ($13,100,000) March 2, 2010 $ 230,000 ($12,870,000) July 21, 2010 $ 425,000 ($12,445,000) October 15, 2010 $ 23,650,000 $ 11,205,000

The property is secured by a $46,000,000 first mortgage from Freddie Mac due in August 2019. The

loan has a fixed interest rate of 5.66% and is interest only through September 1, 2011 with 30 year amortization thereafter. The loan was assumed by the buyer, Home Properties, at the time of disposition.



REALIZED INVESTMENTS - INVESTMENT SUMMARIES The Point at Fairfax

27


THE POINT AT FAIRFAX, FAIRFAX, VA – (CONTINUED) Realized Returns

Deal Level Limited Partners

Equity Investment: 13,300,000$ 13,300,000$ Profit: 11,205,000$ * 9,135,000$ **IRR: 67.1% 55.3%Total Return Multiple: 1.84x 1.69x




REALIZED INVESTMENTS - INVESTMENT SUMMARIES The Ellington

28


THE ELLINGTON, WASHINGTON, DC

Realized on September 21, 2011 Transaction Description

Fund I acquired Note B2 of a First Mortgage Loan secured by The Ellington in Washington, DC.

The Ellington was sold to TIAA – CREF for approximately $100 million on September 16, 2011, at which time Fund I’s Note B2 was paid off in full with all associated premiums and penalties. Fund I’s $5,130,325 investment ($5,000,000 note + $130,325 of closing costs) made on March 12, 2010, resulted in approximately $8.75 million of gross proceeds, a 44.9% gross IRR and a 1.71x gross total return multiple. Net of deal related expenses and the Carried Interest to the GP, the transaction resulted in $7.94 million of net proceeds, a 35.3% net IRR and a 1.55x net total return multiple. While the GP did engage many times with the borrower in an effort to gain control of the real estate, the overall market for real estate in Washington, DC dramatically improved since the time of the investment and the borrower was able to successfully sell the asset sooner than anticipated. At the time of the investment, Fund I underwrote the transaction with 1) a takeover strategy and 2) assuming the debt performed with an early pay off or a pay off at maturity. In all scenarios, the returns to Fund I were highly opportunistic.

The Ellington is a 190 unit Class A high-rise apartment building with 16,740 square feet of prime

ground floor retail and a 176 car parking garage. Built in 2004 and awarded Best Mid-Atlantic High-Rise Apartment Community by Delta Associates in 2004 and Best Mid-Rise Apartment Project by the National Association of Homebuilders in 2005, The Ellington has been one of the most successful new residential projects in Washington, DC, with occupancy consistently near 100% and per square foot rental rates near the top of the market. The U Street Corridor of Washington, DC is bordered by the vibrant neighborhoods of Adams Morgan, Dupont Circle, and Logan Circle, creating a triangle which is the epicenter of the district. The Ellington enjoys convenient vehicular access and is across the street from the U Street Metrorail Station, which provides direct access to downtown Washington, DC and the Maryland suburbs. Transaction Details: • Fund I had the original Note B par balance of $16,500,000 split into an $11,500,000 Note B1 and a

$5,000,000 Note B2.

• Fund I purchased Note B2 with a $6,778,627 balance for $5,000,000 (a 26.2% discount).

• Fund I restructured the original Note B deal of a 7% current return plus a 3% accrued return on the original $16,500,000 principal balance as follows:

o Fund I received a 7% current return on the outstanding balance of Note B2, which was purchased at a discount and grows monthly due to the accrual, so the current yield during the holding period ranged from an initial yield of approximately 10% to 15% by the end of the term; and

o Fund I negotiated that its $5,000,000 investment received 100% of the 3% accrual that was attributable to the entire outstanding Note B balance ($18,278,627 at closing, of which $16,500,000 was the original balance and $1,778,627 was the accrual), yielding Fund I investors an additional return of approximately 11% to 13% by the end of the term.



REALIZED INVESTMENTS - INVESTMENT SUMMARIES The Ellington

29


THE ELLINGTON, WASHINGTON, DC - (CONTINUED) • Fund I was able to negotiate for almost all of the control provisions for both Note B1 and Note B2, as

well as a right of first refusal to purchase the Note B1 and A2 positions.

Debt Structure at Loan Acquisition

Loan to Total Cost: First Mortgage Debt – Note A1 – JP Morgan securitization $ 27,300,000 35.0% First Mortgage Debt – Note A2 – AMAC CDO/Centerline $ 13,500,000 52.3% First Mortgage Debt – Note B1 – AMAC CDO/Centerline $ 11,500,000 67.1% First Mortgage Debt – Note B2 - Panco $ 6,778,627 75.7% Total First Mortgage Debt $ 59,078,627 Borrower Imputed Equity – Donatelli Development Inc. $ 18,921,373 Appraised Value (as of August 2007) $ 78,000,000 100%




Returned (Equity

Invested) March 12 , 2010 ($ 5,130,325) $ - ($ 5,130,325) June 30, 2010 $ 150,000 ($ 4,980,325) September 30, 2010 $ 100,000 ($ 4,880,325) March 31, 2011 $ 300,000 ($ 4,580,325) August 9, 2011 $ 105,000 ($ 4,475,325) September 21, 2011 $ 8,095,973 $ 3,620,648

Realized Returns

Deal Level Limited PartnersEquity Investment: 5,130,325$ 5,130,325$ Profit: 3,620,648$ * 2,809,415$ **IRR: 44.9% 35.3%Total Return Multiple: 1.71x 1.55x




REALIZED INVESTMENTS - INVESTMENT SUMMARIES NYC Apartment Portfolio

30


NEW YORK CITY APARTMENT PORTFOLIO, NEW YORK, NY Realized on November 9, 2011 Transaction Description

Fund I invested in the most senior Mezzanine Loan (Mezzanine 1A Participation, the “Mezzanine” –

please see Debt Structure) secured by a New York City apartment and retail portfolio. The Mezzanine was acquired from The Hartford Insurance Company in 50/50 joint venture partnership with Dune Real Estate Partners LP for $18,016,425, a 19% discount to the original face value of $22,242,500.

Fund I underwrote this transaction with two fundamental scenarios: 1) a debt scenario where Fund I’s

investment is paid off at maturity or as extended – the loan expires in May 2010 and has two one-year extension options which are subject to satisfying certain loan terms; and 2) as a real estate scenario whereupon Fund I gains control of the portfolio if the borrower defaults, and consequently manages the buildings and ultimately sells the assets. Fund I’s low cost basis of approximately $140,000 per apartment unit (after applying a market rate value to the retail) had the potential to give Fund I opportunistic returns in either scenario. Fund I’s position in the capital stack resulted in 55.5% loan to cost of the original debt and equity balances. Fund I was well protected with almost $102 million of Mezzanine debt and the Borrower’s equity behind Mezzanine 1A.

This investment was paid off in full on November 9, 2011. Fund I’s $9,089,581 investment made on

February 18, 2010 resulted in approximately $11.6 million of gross proceeds, a 17.8% IRR and a 1.28x gross total return multiple. Net of deal related expenses and the Carried Interest to the GP, the transaction resulted in $11.0 million of net proceeds, a 13.6% IRR and a 1.21x net total return multiple. This investment achieved returns in excess of our underwriting due to the hyper amortization of Fund I’s investment following the sale of three buildings followed by an early payoff at par value.

The Mezzanine collateral originally consisted of 36 prewar apartment buildings containing 786

apartment units totaling approximately 355,000 net rentable square feet plus 12 retail sites totaling approximately 9,320 square feet. The Portfolio is located almost entirely on the Upper East Side of Manhattan with 34 of the 36 buildings located from East 55th Street to East 89th Street from Third Avenue to York Avenue. Two of the 36 buildings are in the East Village and West Village. New York City is one of the strongest housing markets in the US with high-paying jobs, excellent public transportation, world class retail and cultural attractions, as well as extremely high barriers to entry due to difficult zoning and high land, construction and financing costs.



REALIZED INVESTMENTS - INVESTMENT SUMMARIES NYC Apartment Portfolio

31


NEW YORK CITY APARTMENT PORTFOLIO, NEW YORK, NY - (CONTINUED)

Debt Structure at Loan Acquisition

Loan to Total Cost: First Mortgage Debt – Deutsche Bank $ 105,000,000 45.8% Mezzanine 1 A Participation (Senior) – Panco/Dune $ 22,242,500 55.5% Mezzanine 1 B Participation (Junior) – The Blackstone Group $ 22,242,500 65.2% Mezzanine 2 – Stellar Structured Capital $ 34,000,000 80.1% Mezzanine 3 – Stellar Structured Capital $ 22,935,690 90.1% Total First Mortgage & Mezzanine Debt $ 206,420,690 Borrower Approximate Equity Invested – The Icon Group $ 22,706,523 Total Approximate Cost – Debt & Equity $ 229,127,213 100%




Returned (Equity

Invested) February 18, 2010 ($ 9,089,581) $ - ($ 9,089,581) July 21, 2010 $ 925,000 ($ 8,175,253) October 15, 2010 $ 50,000 ($ 8,125,253) May 2, 2011 $ 200,000 ($ 7,925,253) August 9, 2011 $ 70,000 ($ 7,855,253) November 17, 2011 $ 10,391,179 $ 2,546,598

Realized Returns

Deal Level Limited PartnersEquity Investment: 9,089,581$ 9,089,581$ Profit: 2,546,598$ * 1,927,035$ **IRR: 17.8% 13.6%Total Return Multiple: 1.28x 1.21x




REALIZED INVESTMENTS - INVESTMENT SUMMARIES Acme Commons

32


ACME COMMONS, BORDENTOWN, NJ

Realized on May 7, 2014 Transaction Description

On May 7, 2014, title to Acme Commons was transferred to the lender. Our original loan matured in

August 2012, and the lender was unwilling to consider our repeated requests for a loan extension or modification. Consequently, we relinquished control of the property to the lender. This was our only non-multi-family asset and represents the Fund’s smallest investment. The center is anchored by an Acme supermarket, representing 65% of the total square footage. Supervalu, Acme’s parent company, has reported negative news over the last few years, including financial setbacks, store closings and an ultimate sale to Cerberus. Even with its recent sale, Acme's future uncertainty irreparably hampered our leasing, sale and refinancing opportunities. Although the $16,000,000 conduit loan was in maturity default, we continued to make the monthly interest payments, cooperate with the lender, and manage the asset through foreclosure. Following loan maturity, the lender commenced an action to foreclose which was settled by a consent judgment without either side admitting fault or liability. A public foreclosure auction was conducted on April 10, 2014, resulting in the existing lender obtaining the deed.

Acme Commons is an 85,000 square foot shopping center located in Bordentown, New Jersey, near

Philadelphia and Princeton. Built in 2007, this Class-A grocery anchored center is leased by national tenants including Acme Markets, Wells Fargo, Starbucks, Sleepy’s, UPS, Supercuts, GameStop and Verizon. Acme Markets, which occupies approximately 55,000 square feet (65%) of the property, was founded in 1891, is a subsidiary of Supervalu, and is the leading food and drug retailer in the greater Philadelphia market. Acme Commons was acquired on August 2, 2007, less than one week after the anchor tenants took occupancy, and ownership was transferred to seed Fund I on November 15, 2007 with no mark-up.




November 15, 2007 ($ 3,200,000) $ - 2007-2014 ($ 380,000) $ - May 7, 2014 ($ 3,580,000) $ -

Realized Returns

Deal Level Limited PartnersEquity Investment: 3,580,000$ 3,580,000$ Profit: -$ * -$ **IRR: N/A N/AProfit Multiple: N/A N/A



REALIZED INVESTMENTS - INVESTMENT SUMMARIES The Point at River Ridge

33


THE POINT AT RIVER RIDGE, ASHBURN, VA

Realized on January 31, 2014 Transaction Description

The Point at River Ridge is a 467 unit luxury garden apartment community located in Ashburn,

Virginia in Loudon County. Fund I acquired The Point at River Ridge in the Point DC Portfolio acquisition. The Point DC Portfolio (Magazine Holdings LLC) was acquired for $460,000,000 in 50/50 joint venture partnership with Dune Real Estate Partners LP on March 1, 2011; this was the Fund’s second 50/50 joint venture partnership with Dune. The Point DC Portfolio consists of 8 institutional quality apartment communities totaling 2,580 units located in the Northern Virginia and Maryland Suburbs of Washington, DC. The portfolio is of institutional quality and has previously been owned/managed by RREEF, Morgan Stanley, and the Town & Country REIT. The seller was RREEF, which is the real estate investment business of Deutsche Bank’s Asset Management Division. RREEF sold the portfolio to our joint venture at over an $80 million loss due to RREEF’s liquidity needs in their global fund. The Point at River Ridge sold for $89,500,000 or $191,650 per unit.

The purchaser was an affiliate of General Motors Pension Fund, which is reflective of the quality of

the asset. In the 34 month holding period of The Point at River Ridge, we increased net operating income by 14%, which enabled Fund I to achieve a gross deal level internal rate of return of 25.4% and a gross total return multiple of 1.9x.

Built in 1991, the 25.6 acre property has been improved with nineteen two-four story residential

buildings, and a clubhouse building. The Point at River Ridge is located in Loudon County, VA, which is the largest and one of the wealthiest counties in Northern Virginia and the Washington, DC metropolitan area, and serves as one the backbones of economic activity within Northern Virginia. Located 45 minutes west of downtown Washington, Loudoun County is distinguished as the United States’ fastest-growing county with a projected population growth of 29% over the next ten years. Home to Dulles International Airport, Loudoun is the epicenter of the Washington area’s booming technology 16 industry and is the home to numerous major area employers including Verizon Business, the Howard Hughes Medical Institute Janelia Research Campus and George Washington University Virginia Campus. Loudoun County offers residents an excellent quality of life with an abundance of easily accessible retail, entertainment, and cultural attractions including Loudoun County’s largest retail center, Dulles Town Center, which features over 250 shops and restaurants, and Leesburg Corner Premium Outlets, the Washington area’s premier outlet mall with 110 outlet store.




34


THE POINT AT RIVER RIDGE, ASHBURN, VA (CONTINUED)


PSREF I Total Equity Invested

Distributions Net Proft Returned (Equity Invested)

February 28, 2011 (6,671,507.78)$ -$ (6,671,507.78)$ March 31, 2011 18,458.50$ (6,653,049.28)$ April 30, 2011 21,622.50$ (6,631,426.78)$ May 31, 2011 41,123.00$ (6,590,303.78)$ June 30, 2011 34,152.50$ (6,556,151.28)$ July 31, 2011 27,591.00$ (6,528,560.28)$ August 31, 2011 (490,406.63)$ (7,018,966.91)$ September 30, 2011 (103,720.50)$ (7,122,687.41)$ October 31, 2011 (1,276,194.62)$ (8,398,882.03)$ November 30, 2011 462,188.43$ (7,936,693.60)$ December 31, 2011 (12,473.23)$ (7,949,166.83)$ January 31, 2012 356,352.30$ (7,592,814.53)$ February 29, 2012 152,440.48$ (7,440,374.06)$ March 31, 2012 36,355.50$ (7,404,018.56)$ April 30, 2012 17,729.50$ (7,386,289.06)$ May 31, 2012 53,522.00$ (7,332,767.06)$ June 30, 2012 38,262.33$ (7,294,504.73)$ July 31, 2012 56,507.21$ (7,237,997.53)$ August 31, 2012 23,832.00$ (7,214,165.53)$ September 30, 2012 45,642.00$ (7,168,523.53)$ October 31, 2012 53,991.00$ (7,114,532.53)$ November 30, 2012 95,431.00$ (7,019,101.53)$ December 31, 2012 4,547.00$ (7,014,554.53)$ January 31, 2013 73,387.00$ (6,941,167.53)$ February 28, 2013 73,215.00$ (6,867,952.53)$ March 31, 2013 47,257.50$ (6,820,695.03)$ April 30, 2013 99,687.50$ (6,721,007.53)$ May 31, 2013 77,942.50$ (6,643,065.03)$ June 30, 2013 52,638.50$ (6,590,426.53)$ July 31, 2013 74,203.00$ (6,516,223.53)$ August 31, 2013 94,061.50$ (6,422,162.03)$ September 30, 2013 79,441.50$ (6,342,720.53)$ October 31, 2013 81,631.50$ (6,261,089.03)$ November 30, 2013 68,425.00$ (6,192,664.03)$ December 31, 2013 69,264.50$ (6,123,399.53)$ January 31, 2014 12,453,673.97$ 6,330,274.44$




35


THE POINT AT RIVER RIDGE, ASHBURN, VA (CONTINUED)

Realized Returns

Deal Level Limited Partners

Equity Investment: 7,188,175$ 7,188,175$ Profit: 6,330,274$ * 5,061,280$ **IRR: 25.4% 21.1%Total Return Multiple: 1.88x 1.70x

*Gross profit before deal level expenses, reserves and Carried Interest to General Partner. **Net profit after deal level expenses, reserves and Carried Interest to General Partner. Note: Due to timing of 2011 refinancing deposits, the aggregate invested equity capital may vary slightly.



INVESTMENT SUMMARY CHART 36

Panco Strategic Real Estate Fund I, LP Investment Summary Chart Panco Strategic Real Estate Fund I, LP - As of March 31, 2016

Description Fund I Capital Proceeds to

EquityTotal Return

Multiple IRRGross Investment Level Performance (Projected) 111,532,434$ 231,441,247$ 2.08x 16.1%Investment Level Performance Net of Carried Interest (Projected based on Fund Commitments) 100,200,000$ 192,358,167$ 1.92x 12.7%

Investments (1) Acquisition DateDisposition Date

(2)Fund I Equity

(3)Joint Venture

Equity (4) Total Equity (5) Debt (6)Total

Capitalization (7)Leverage Ratio

(8)Gross Proceeds

to Equity (9)

Gross Total Return Multiple

(10)Gross

IRR (11)

REALIZED INVESTMENTS1 The Grove at Arlington* August 2008 March 2010 $4,000,000 $4,000,000 $8,000,000 $0 $8,000,000 0.0% $5,280,932 1.3x 25.1%2 The Point at Fairfax July 2009 September 2010 $13,300,000 N/A $13,300,000 $46,000,000 $59,300,000 77.6% $24,505,000 1.8x 67.1%3 New York City Apartment Portfolio* February 2010 November 2011 $9,100,253 $9,103,893 $18,204,146 $0 $18,204,146 0.0% $11,636,179 1.3x 17.8%4 The Ellington* March 2010 September 2011 $5,130,325 N/A $5,130,325 $0 $5,130,325 0.0% $8,750,973 1.7x 44.9%5 The Point at River Ridge March 2011 January 2014 $7,188,175 $7,188,175 $14,376,350 $62,740,000 $77,116,350 81.4% $13,514,775 1.9x 25.4%6 Acme Commons November 2007 May 2014 $3,580,000 N/A $3,580,000 $16,000,000 $19,580,000 81.7% N/A N/A N/A

UNREALIZED INVESTMENTS7 The Point at Laurel Lakes December 2010 December 2018 $13,489,381 N/A $13,489,381 $31,963,310 $45,452,691 70.3% $39,059,540 2.3x 12.3%

The Point DC Portfolio March 2011 December 2018 $41,416,888 $41,416,888 $82,833,776 $325,092,457 $407,926,233 79.7% $96,426,760 2.3x 14.1%8 The Point at Alexandria9 The Point at Bull Run

10 The Point at Leesburg 11 The Point at Dulles 12 The Point at McNair Farms 13 The Point at Germantown 14 The Point at Watkins Mill15 The Point at Annapolis March 2012 March 2019 $9,327,412 $9,327,412 $18,654,824 $51,986,000 $70,640,824 73.6% $20,263,955 2.2x 13.7%16 The Point at Silver Spring August 2012 August 2019 $5,000,000 $50,000,000 $55,000,000 $146,160,000 $201,160,000 72.7% $12,003,132 2.4x 16.8%

Gross Investment Level Performance Inclusive of Recallable Capital (Projected) $111,532,434 $121,036,368 $232,568,802 $679,941,767 $912,510,569 74.5% $231,441,247 2.08x 16.1%




ENDNOTES

Panco Strategic Real Estate Fund I, LP Investment Summary Chart

Past performance is not necessarily indicative of future results. The information in the table above speaks as of the date hereof or as of the specific date(s) noted herein, as applicable, and Fund I, the Sponsor and their affiliates, members, partners, stockholders, managers, directors, officers, employees and agents do not have any obligation to update any of such information. Any projections or other estimates included above, including estimates of returns or performance, are forward-looking statements and are based upon certain assumptions. Other events which were not taken into account, including general economic factors which are not predictable, may occur and may significantly affect the actual returns or performance of Fund I and/or any of the properties in which Fund I has invested. Any assumptions should not be construed to be indicative of the actual events which will occur. Actual events are difficult to project and depend upon factors that are beyond the control of Fund I, the Sponsor and their respective affiliates, members, partners, stockholders, managers, directors, officers, employees and agents. Certain assumptions have been made to simplify the presentation and, accordingly, actual results may differ, perhaps materially, from those presented herein. All information with respect to properties has been obtained from sources believed to be reliable and current, but accuracy cannot be guaranteed. 1. There can be no assurances that unrealized investments will perform in accordance with their respective business plans.

2. Disposition Date for realized investments represents the month and year each such investment was sold or paid off. Disposition Date for unrealized investments represents the month and year each such investment is projected to be sold or paid off according to Fund I’s business plan for each investment. There can be no assurances that unrealized investments will perform in accordance with their respective business plans or that such investments will be sold or paid off in the manner or timing contemplated by Fund I’s business plan.

3. Fund I Equity represents the aggregate equity capital invested and projected to be invested, if any, by Fund I in each investment. For investments that were refinanced, Fund I Equity represents stabilized Fund I Equity in that investment, following the refinancing, if applicable.

4. Joint Venture Partner Equity represents the aggregate equity capital invested and projected to be invested, if any, by Fund I’s Joint Venture Equity Partner, if applicable, in each joint venture. For investments that were refinanced within the first eighteen months (The Point DC Portfolio and The Point at Laurel Lakes), Joint Venture Partner Equity represents stabilized Joint Venture Partner Equity in that investment, following the refinancing.

5. Total Equity is the sum of Fund I Equity and Joint Venture Partner Equity. Due to Recallable Capital, the sum of the Fund I Equity in the individual investments is greater than $100.2 million, which is the amount of the total capital commitments for Fund I.

6. Debt is the aggregate amount of current debt capital outstanding attributable to each investment.

7. Total Capitalization equals Debt plus Total Equity. The Total Capitalization of The Point DC Portfolio, The Point at Laurel Lakes, and The Point at Silver Spring equals refinanced Debt plus Total Equity.

8. Leverage Ratio equals Debt divided by Total Capitalization. The Leverage Ratio appears higher in investments that were refinanced (The Point DC Portfolio, The Point at Laurel Lakes, and The Point at Silver Spring) since it includes the new increased debt balance plus Total Equity.




9. Gross Proceeds to Equity for realized investments represents the sum of the net proceeds generated from the disposition of each such investment and distribution of income net of any closing costs and debt repayment at disposition. Gross Proceeds to Equity for unrealized investments represents the sum of the actual and projected distribution of income and projected net proceeds generated from the disposition of each such investment net of any closing costs and debt repayment at disposition. Gross Proceeds to Equity is calculated prior to reduction for applicable carried interest, management fees and fund expenses, which would reduce such amount, and as a result, investors should not expect to receive such proceeds to equity on their investments in Fund I. The sum of the Gross Proceeds to Equity in the individual investments is greater than the Total Gross Proceeds to Equity for Fund I due to Recallable Capital. There can be no assurances that unrealized investments will perform in accordance with their respective business plans.

10. Gross Total Return Multiple for each investment is the ratio between Gross Proceeds to Equity and Fund I Equity. Gross Total Return Multiple for Total Realized and Unrealized Investments is the ratio between Gross Proceeds to Equity and $100.2 million, which is the amount of total capital commitments for Fund I. Gross Total Return Multiple is calculated prior to reduction for applicable carried interest, management fees and fund expenses, which would reduce such amount, and as a result, investors should not expect to receive such a total return multiple on their investments in Fund I. There can be no assurances that unrealized investments will perform in accordance with their respective business plans.

11. Gross Deal IRRs for realized investments are internal rates of return based on actual cash flows consisting of the sum of the net proceeds generated from the disposition of each such investment and distribution of income net of any closing costs and debt repayment at disposition. Gross Deal IRRs for unrealized investments are internal rates of return based on actual and projected cash flows consisting of the sum of the net proceeds generated from the disposition of each such investment and distribution of income net of any closing costs and debt repayment at disposition. These estimates are subject to change and may not be reflective of the actual internal rates of return at the realization of each investment. Gross Deal IRRs are calculated prior to reduction for applicable carried interest, management fees and fund expenses, which would reduce such amounts, and as a result, investors should not expect to receive such IRRs on their investments in Fund I. Gross Deal IRRs are calculated without taking into account any tax benefits, which could potentially increase the effective return; provided that, tax benefits are not guaranteed, and therefore, investors in Fund I should not expect to receive such tax benefits. There can be no assurances that unrealized investments will perform in accordance with their respective business plans.

PANCO STRATEGIC REAL ESTATE FUND I, LP PANCO STRATEGIC REAL ESTATE FUND...

Documents

Transcript of PANCO STRATEGIC REAL ESTATE FUND I, LP PANCO STRATEGIC REAL ESTATE FUND...