GB Ridgepointe Investors, LLC

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1 Buck Blessing Steve Engel Gary Winegar BJ Hybl Dave Bunkers 102 N. Cascade Avenue Suite 550 Colorado Springs, CO Operations & Financial Report Fourth Quarter

2 Property Description Built in 2002 and acquired in December 2013, Ridgepointe at Gleneagle Apartments is a garden-style, Class A, high quality multifamily community, comprised of 240 units. With one to three-bedroom suites, averaging 891 SF in size, Ridgepointe apartments feature nine-foot ceilings, oversized windows and open floor plans extending to private balconies. Many offer mountainous views, including Pikes Peak. Community amenities at Ridgepointe include a clubhouse, a business center, a theater and a fitness facility. There is also a swimming pool, a Jacuzzi hot tub and a children s playground for residents to enjoy. Capital Improvements Two apartment upgrades were completed in the fourth quarter. The average cost per unit upgrade was $4,570 with an average monthly rent increase of $125, resulting in an annual rate of return of 32.8%. The increase in rent is the difference between the new rent for an upgraded unit compared to a recently leased unit that has yet to be upgraded. Modifications included new light fixtures, kitchen cabinet hardware, wood plank flooring, carpeting, twotone paint, brushed nickel hardware, resurfacing of kitchen and bathroom countertops, new faucets, and a glass tile backsplash in the kitchen. 4 th Quarter 2015

3 Operational Performance Year over year rent collections were 8.4% favorable to the 2014 levels. Total revenue exceeded 2014 year-to-date by 10.1% YTD operating expenses were higher than the comparable period in 2014 due to a full year of property tax expense, as Colorado taxes are paid in arrears, and lower operating expenses with the ramp up of property operations in Relative to budget, actual operating expenses were 4.3% unfavorable primarily due to higher than anticipated expenses in building and exterior maintenance. Operating Results Summary YTD ending December 31, 2015 YTD Actual 2015 YTD Actual 2014 Total Rents Collected $ 2,805,789 $ 2,588,672 Total Other Income $ 583,613 $ 488,848 TOTAL OPERATING INCOME $ 3,389,402 $ 3,077,520 *Operating Expenses $ (1,296,166) $ (1,108,393) NET OPERATING INCOME/LOSS $ 2,093,236 $ 1,969,127 The occupancy rate for the fourth quarter averaged 95.1%. Average effective rent was $1.21 per square foot, while the average rent per month was $1,076. *Total Replacements/Debt Service $ (1,233,364) $ (1,160,860) CASH FLOW AFTER DEBT SERVICE $ 859,872 $ 808,267 Distributions Generated from property cash flow, monthly distributions equate to an annualized 7.0% return on invested capital. To date, 14.0% has been returned to investors. Market Overview Apartment Insights, on subsequent pages, provides a fourth quarter summary of the Colorado Springs multifamily market. * Adjusted for lender escrows. Ownership Expenses $ (38,587) $ (42,581) Capital Additions $ (245,607) $ (712,504) NET CASH FLOW $ 575,678 $ 53,182 4 th Qtr th Qtr 2014 Average Occupancy 95.1% 96.4% Average Effective Rent Per SF $ 1.21 $ 1.10 Average Rent Per Month $ 1,076 $ 984 A more comprehensive summary is available in the Budget Comparison Report accessible by clicking here. 24 nd th Quarter

4 S TATISTIC/T RENDS SUMMARY Colorado Springs 50+ Unit Apartment Properties Fourth Quarter 2015 A summary of the Colorado Springs apartment activity for the fourth quarter of 2015, as reported in "APARTMENT INSIGHTS' Statistics/Trends, indicates: VACANCY: 4.22% The stabilized vacancy rate for the Colorado Springs area decreased by 51 basis points (bps) during the quarter to 4.22%, a new low point. This adds to last quarter s sizable decline of 58 bps, resulting in a current vacancy that is 119 bps below the year-ago rate of 5.41%. The trailing four-quarter average vacancy rate decreased by 30 bps to 5.08%, a record low for the 9.5 years of surveying this market. A year ago it stood at 5.40%. Areas: Vacancy decreased in eight of nine submarkets. The largest decrease was in Southwest (SOW), dropping 171 bps to 3.15%. Only two submarkets had rates above 5%, while two posted sub-3% rates - North Central at 2.65%, and Security/Widefield/ Fountain (SWF) at 2.89%. Age: Vacancy decreased across all age groups except the newest, in properties built since The lowest vacancy was found in properties built during the 1980s at 3.83%, while the newest group had the highest vacancy rate of 4.67%. Tax credit: Vacancy for tax credit properties decreased 87 bps to a new record low 2.02%. This is well below the year-ago vacancy rate of 3.44%. ABSORPTION: +244 units The rental market absorbed 244 units during the quarter, bringing the annual gain to 743 units. It was the second best 4 th quarter on record, exceeded only by the 304 units absorbed during the 4 th quarter of The annual gain in occupied units was well above the long term average of 528 units per year, and also well above the 2014 total gain of 580 units. RENTS: $886 per Unit $1.08 per Sq. Ft. The average rent for the metro area increased by $17 this quarter to new record highs of $886 per unit and $1.08 per square foot. The total 12-month increase in rent was $54, which is 6.5% higher than a year ago. This growth rate, while faster than the last three quarters, is below the year ago growth rate of 7.2%. Areas: Most submarkets achieved annual rent increases of 5% to 7% during 2015, but West (WES) was only $2 higher than a year ago, or a nominal 0.2% growth rate. WES saw its rents fall $5 during the quarter to $905, which was still the third highest rent of the nine submarkets. North (NOR) posted the largest dollar gain for the year, up $77 for an 8.0% annual growth rate. The resulting rent of $1,044 is the highest in the region and only one above $1,000. Airport (AIR) had the largest percentage rent increase, up 8.3% for the year to $731, a $56 rise. Age: After a very large increase of $77 last quarter, the group of properties built since 2010 fell back a dollar during the quarter to $1,205. Since the inventory in this group is constantly changing as new properties are 4th Quarter, Apartment Insights Colorado Springs (50+) - I

5 Colorado Springs 50+ Unit Apartment Properties Fourth Quarter 2015 added, the 3.1% annual rent growth is less meaningful. The older age groups achieved annual rent growth ranging from a low of 4.8% for properties built between 2000 and 2009, to a high of 7.1% for properties built during the 1990s, followed by 6.1% for 1980 s product. The latter both had sub-4% vacancy, spurring faster rent growth. Net: The market-wide net or effective rent increased by $15 during the quarter to a new high of $879. This is $62 or 7.6% higher than a year ago. The current concession of $7 is $2 higher than last quarter, but $8 less than a year ago. SALES (arms length): $116,787 per Unit $ per Sq.Ft. As this went to press, there had been three sales during the quarter with a total of just 216 units. The average prices of $116,787 per unit and $ per square foot represent the middle of an extreme range, with one property selling for just $38,679 per unit, and the Pines at Broadmoor Bluffs selling for $187,963 per unit. During 2015 there were 20 transactions of properties with 50 or more units, for a total of $358 million in sales. They averaged $91,215 per unit, and $ per square foot. The volume was less than during 2014, which had 29 transactions totaling $428 million. However, the 2015 average prices were considerable higher than the 2014 averages of $84,075 and $ The average age of sales in both years was the same at added to the Colorado Springs rental inventory, while the northern markets have very active construction pipelines with deliveries exceeding demand. All three markets had reasonably strong absorption from a historical perspective, so renter demand is proportional in each region. However, the larger new additions to supply in the northern areas are exceeding absorption, while that is not the case in the Springs. Over the last several years, all three metro areas have experienced increasing rents and falling vacancy, but Colorado Springs has improved at a much slower pace. It appears that is now beginning to change; the Colorado Springs rental market is poised to begin catching up with its neighbors to the north. Apartment Insights is a web based information and analysis tool used by apartment owners, management companies, brokers, and lenders. For a demonstration or subscription, please call: Apartment Insights Cary Bruteig, MAI 900 E. Louisiana Ave., Suite 110 Denver, CO Phone: (303) Fax: (303) Doug Carter, CCIM 104 S. Cascade Ave., Suite 212 Colorado Springs, CO Phone: (719) Fax: (719) OBSERVATIONS In sharp contrast to significant softening in the Denver and Fort Collins/Loveland/ Greeley rental markets this quarter, Colorado Springs posted a strong performance with substantial improvement in both vacancy and rental rates. Part of the difference in the market areas is the modest new supply being 4th Quarter, Apartment Insights Colorado Springs (50+) - II