THE DEFINITIVE GUIDE TO

DIRECT INVESTMENT IN
REAL ESTATE

A NEW WAY TO INVEST

IN A PROVEN ASSET CLASS

eal estate is an integral part of most well-diversified

portfolios, typically representing 5%-15% of institutionally
managed portfolios. As an asset class, real estate delivers
attractive risk-adjusted returns that are not highly correlated
compared to those of traditional investments like stocks and
bonds, so adding it to a portfolio can reduce overall risk and
potentially provide more consistent returns. Real estate may
also provide additional benefits which include protection
against inflation, delivering steady income, and the potential
for capital appreciation. Real estate has performed especially
well in the last several years, driven by a recovery from the
last recession and continued low interest rates that encourage
property acquisition.
There are many different ways to invest in real estatefrom
buying physical properties, to loaning money to fund or recapitalize
projects, to investing in pooled private funds, to participating
in publicly traded investment vehicles. Some of these strategies
enable you to own an interest in specific properties (or their
ownership entities) directly rather than through a fund.

Depending on the circumstances, these direct investments can

provide additional tax advantages when compared to other
investment vehicles.
If youre working with an investment advisor or consultant,
he or she can provide guidance on how real estate can work
within your portfolio to provide income, inflation protection,
diversification and return potential. A financial advisor can
also recommend appropriate vehicles. If you prefer to manage
this portion of your portfolio yourself, however, Steadfast
Companies, through its affiliated entity, Steadfast Realty Corp.,
is pleased to be providing qualified and accredited investors
with direct access to institutional level offerings previously
available to private equity and hedge fund investors.
Now through our direct investing platform, Steadfast Companies
is enabling small institutions and qualified accredited investors
to participate directly in institutional-quality real estate investments.
Steadfast Companies, is pleased to present institutional level
offerings directly to accredited investors, and to partner with
you in these exciting opportunities.

We invite you to read this guide to gain a more thorough understanding of the benefits of direct
real estate investments and the way that Steadfast Companies unique offerings can meet your
needs for performance and diversification.

Why Real Estate is Such a Popular Investment

for Institutions and Very Wealthy Families
Based on historical performance, real estate offers four main benefits: stable, predictable income higher than what is available
from U.S. Treasuries, high risk-adjusted returns, diversification in a non-correlated asset class and inflation protection when
supply and demand are in balance.

Performance
Real estate has historically provided high risk-adjusted returns
to investors. Since the great recession of 2008, real estate
returns have outpaced stocks and bonds. Significantly, this
added performance has come without materially higher
riska mismatch that benefits real estate investors.

Asset Class Performance, Total Return

Index

Real estate returns have also historically outpaced corporate,

municipal and U.S. bonds, because both the value of buildings
and the income they generate tend to rise with the economy.
Over the past seven years, for example, the returns on the
Dow Jones U.S. Real Estate Total Return Index outperformed
most fixed income indices and the S&P 500 index while providing
a hard asset backstop in most investment scenarios.

Steady Income
Real estate investments can provide steady current income
through dividends (equity) or through regular interest payments
(fixed income) depending upon the offering.

1-Year

3-Year

5-Year

7-Year

U.S. Real Estate 1

2.99%

8.63%

10.34%

22.59%

S&P 500

1.77%

11.77%

11.54%

16.93%

U.S. Aggregate
Bonds 2

1.95%

2.49%

3.77%

4.52%

Liquid Investment
Grade 3

1.32%

3.48%

5.94%

8.30%

Municipal
Bonds 4

3.92%

3.25%

5.44%

5.39%

10 Year U.S.
Treasuries 5

3.01%

2.26%

4.61%

3.86%

Source: Bloomberg. Annualized Performance Total Return Data as of 3/31/16.

1
Dow Jones U.S. Real Estate Total Return Index, 2 Barclays Capital U.S. Aggregate,
3
Liquid Investment Grade Index, 4 S&P National AMT-Free Bond Index, 5 S&P U.S.
Treasury Note Index. All returns are before fees, which would reduce
investor returns.

Diversification

Real estate investments do not perform in sync with more

traditional investments like stocks and bonds. Investment
experts measure this by looking at correlation, or what proportion of one asset class performance reflects the performance
of another asset class. Assets that move in perfect unison have correlations of 1.0; those whose price movements that have
nothing to do with each other have correlations of 0.0.
As you can see in the chart below, real estate has historically had low correlation with stock market performance. That means
when stock prices are volatile, real estate may remain stable and rise and fall at different rates. Real estate and bond performance
is linked more closely, but still, only a third of real estates performance can be explained by looking at bond performance.
By including low-correlated assets in a portfolio, investors can protect themselves from sudden shifts in the value of any single
asset class and potentially benefit when one is delivering superior performance compared to the other assets.

18100 VON KARMAN AVE., SUITE 500

IRVINE, CA 92612 949.852.0700

1.

Two Types of Real Estate Investment

Investors can generally choose between two basic types of real estate investmentsdebt and equity.

In a debt, or fixed income investment, you are lending

In an equity investment, by contrast,

money to a real estate owner, who in turn makes regular

interest payments to you. The investment works like a bond
in that you receive interest and can anticipate receiving
your principal back at the end of the term. Fixed income
real estate returns are typically higher than those offered by
government or investment grade corporate bonds.

you become a partial owner of the real estate

property (or a portfolio of properties).
Depending on the structure, you may
receive regular dividend payments derived
from profit from rent and other sources. Your
main source of long-term return will come
from income generated by the properties
and gains in the value of the underlying
property or properties when they are sold.
These returns are typically higher in the
long-term than the ones available from fixed
income real estate investments, but there is
more risk as the profits generated from rent
and the price of the property or properties
may fluctuate.

Because real estate is a hard asset, its debt can be backed

up with real collateral such as buildings and property, and
in some cases, guarantees that are offered by the issuing
entity. For example, an investment may be guaranteed by
the full faith and balance sheet of an additional guarantor
entity, which is what Steadfast has done in its inaugural
direct offering. This is in stark contrast to most other debt
offerings that have no hard assets or guarantees to protect
investors from risk.

Correlation Matrix
Security
U.S. Real Estate 1

U.S. Real
Estate 1

S&P 500

U.S. Aggregate
Bonds 2

Liquid Investment Municipal

Grade 3
Bonds 4

10 Year U.S.
Treasuries 5

0.761

0.23

0.612

0.356

0.208

0.761

-0.265

0.223

-0.034

0.598

0.23

-0.265

0.817

0.805

-0.811

Liquid Investment
Grade 3

0.612

0.223

0.817

0.771

-0.396

Municipal
Bonds 4

0.356

-0.034

0.805

0.771

-0.626

10 Year U.S.
Treasuries 5

0.208

0.598

-0.811

-0.396

-0.626

S&P 500
U.S. Aggregate
Bonds 2

Source: Bloomberg. Annualized Performance Total Return Data as of 3/31/16.

1
Dow Jones U.S. Real Estate Total Return Index, 2 Barclays Capital U.S. Aggregate, 3 Liquid Investment Grade Index, 4 S&P National
AMT-Free Bond Index, 5 S&P U.S. Treasury Note Index. All returns are before fees, which would reduce investor returns.

2.

C O M P A N I E S

The Benefits of Direct Investment

Direct investment is different from investing through mutual funds and ETFs, which have been up to now, the most common
ways for individuals to gain exposure to real estate.
These are direct investments in projects or properties owned by private partnerships and managed by seasoned professionals.
By contrast, real estate mutual funds and ETFs are typically comprised of REIT stocks and/or real estate-related stocks that have
been pooled together as one security, and are traded on stock exchanges. Depending on the offering, a direct investment could
offer all or some of the following.

Steady Income Real estate fixed income can offer significantly higher returns than Treasuries, along
with lower risk since principal and income payments are often guaranteed by the underlying property. Dividends or
interest is typically paid quarterly or monthly depending upon the offering. This type of steady income can enhance
the fixed income allocation within your portfolio.

Risk-adjusted Returns Real estate can enable you to achieve higher returns for a given level of portfolio risk. Frequently, by adding real estate to a portfolio, you may be able to maintain your portfolio returns while
decreasing risk.

Tax Advantages When you invest directly in an equity

offering, you are responsible for taxes only on the gains you have
realized. By contrast, funds (primarily mutual funds) may have
embedded capital gainspotential gains that occurred before
you invested in them. When you sell, you will be taxed on these
gains, even though you did not benefit from them.

Inflation Hedge When investing in properties equity,

some leases contain provisions for rent increases that are
indexed to inflation or are increased whenever a lease term
expires. Similarly, many property values increase at or above
the rate of inflation.

Ability to Influence Performance When investing

in properties equity, you can benefit from managements efforts
to enhance a property to increase its value or improve its
performance (e.g. by renovations that improve the exterior/
interior increasing its value).

Less Volatile Private investments do not trade on stock

exchanges. Publicly traded funds are susceptible to short-term
stock market movements and are required to price daily. Part of
this is due to being less liquid, and therefore are best suited for
investors with investment horizons that match the offerings that
are typically 2-5 years.

Transparency and Accountability Our direct

investments may be held to the highest institutional standards for
transparency and accountability.

18100 VON KARMAN AVE., SUITE 500

IRVINE, CA 92612 949.852.0700

3.

Types of Direct Real Estate Investments

Direct Lending
Direct lending is for a specific property or project. This is a pool of private capital that generates returns by lending to qualified
borrowers who want to finance real estate investments. These offerings can focus on any sector of the real estate market
including residential, multifamily, commercial or industrial. They traditionally generate returns by charging interest to borrowers,
which is then distributed to investors in the form of monthly, quarterly or annual interest income.
For investors, they function like a bond, that is, they provide a fixed rate of return, distributed at regular intervals. That return is
typically higherand sometimes much higherthan the rate of return on a risk-free U.S. Treasury or money market securities. The
income from direct lending is taxed as ordinary income at the Federal, State and local level.
The debt instrument is typically backed by the underlying property, and potentially also by guarantees from the issuer of the security.
In some cases, a third-party guarantor adds to safety, such as the issuing companys parent or larger affiliated company.
Direct lending securities are not publicly traded. They are less liquid than some other fixed income investments, typically requiring
investors to commit capital for periods of two to four years or longer.

Real Estate Private Equity Funds

Real estate private equity funds are pooled investments that
are not publicly traded. However, instead of lending to real
estate owners, these funds invest directly in properties. They
earn returns when the property value increases, either due to
market forces or through improvements that increase operating
efficiencies or make the properties more desirable.
These investments create most of their returns through a
combination of rental income from properties and capital
appreciation, and generally provide income to investors through
dividend payments. Some real estate private equity funds are
designed to pay dividends generated from improving operating
efficiences, making rent more profitable, and from the proceeds
of early, opportunistic sales of properties.
One benefit is that returns generated when the property is sold
are generally taxed as capital gains. Each investor should consult
with their accountant as to how the returns will be taxed.
These investments are somewhat riskier than direct lending
funds. If the value of the property or portfolio falls, investors
equity is directly impacted.
Real estate private equity funds are also illiquid, requiring investors
to commit capital for anywhere from three to ten years.

4.

C O M P A N I E S

A NEW WAY TO INVEST

DIRECTLY IN REAL ESTATE
At Steadfast Companies, we believe that investors should have access to real estate as an asset class, either
through diversified, broker-sold products like REITs or for seasoned do-it-yourself accredited investors, via
direct investments. For those who want to manage their own real estate investments, we have designed a
direct investment platform that showcases our opportunities and facilitates direct investment.

18100 VON KARMAN AVE., SUITE 500

IRVINE, CA 92612 949.852.0700

5.

How It Works

Consider Direct Investment

in Real Estate if:

You have already taken the first

step in the process by registering
and receiving this guide. The private
portion of our website highlights
our current and completed
offerings for your review.

You are targeting higher returns than

those available from most fixed-income
investments, without undue risk.
Direct investments in real estate
debt can sometimes yield multiples
of bonds, or less than 1% for 2-year
Treasuries and near zero for bank
savings accounts. Your principal may
have guarantors. They may be backed
by the property or a portion of it, a
guarantee from the issuer, and in
some select investments, by the
full faith and balance sheet of
Steadfast Companies.

You are a small institution, qualified

or accredited investor. Direct real
estate investment is only open to,
and appropriate for, institutions and
sophisticated, high-net-worth investors
who, meet the SECs standards for
accreditation. To be an accredited
investor, you must have a net worth of
at least $1 million U.S. dollars, excluding
your primary residence, or have income
of at least $200,000 each year for the
last two years (or $300,000 combined
income if married) and expect to make
the same amount this year.

You are seeking these return profiles

and will not need liquidity for the
duration of the selected investment.
Direct real estate investments are not
as liquid as publicly traded securities
with lock-up periods that are typically
two to four years.

If you have an interest in a specific

offering, simply click on the
offerings Learn More button
to see more details including
financials, photographs, videos
and other information about
the project.
If you are considering investing,
click the Invest button which
will bring you to our partners site.
WealthForge is a FINRA registered
broker-dealer which specializes in
facilitating the online investment
process through an easy-to-use,
streamlined process.
Behind their highly secure firewall
(you will need to establish an
account with them as well) are
all of our private placement
documents along with further
details of the offering.

Benefits

The process we have developed along with our broker-dealer partner

WealthForge is efficient and convenient, making it easy to directly access
our firms compelling, institutional-quality real estate investments.
At Steadfast, we value our client relationships and you can always reach
out to us directly with any questions you may have at 1-855-520-5777
or email us at info@steadfastinvesting.com and a licensed, U.S.-based
person will assist promptly.

6.

C O M P A N I E S

Steadfast is Your Partner in

Direct Real Estate Investment
Since our formation in 1994, Steadfast Companies and its affiliates, including Steadfast Realty Corp., have developed into an
integrated, multifaceted real estate investment management company that today owns and/or operates a diverse portfolio of more
than $4.5 billion across the United States and Mexico. Steadfast Companies is driven by its mission to pursue real estate investment,
development and management opportunities responsibly and with integrity for the benefit of our investors, partners, tenants,
associates and community. Our professionals are dedicated to consistently delivering solutions that produce superior results.
More information about our firm can be found at www.SteadfastCompanies.com.

Areas of Expertise

Steadfast Companies provides a comprehensive spectrum of commercial real estate services that work seamlessly together
to provide our investors, partners and tenants optimum, measurable results.

REAL ESTATE & DEVELOPMENT

Steadfast Companies and its affiliates has acquired, developed or redeveloped more than $5.0 billion
of residential, commercial, and resort property throughout the United States and Mexico.

PROPERTY MANAGEMENT
Steadfast Management Company, Inc. provides property management services for its residential and
commercial properties, with expertise in all categories of multifamily, industrial, retail and office projects.

INVESTMENT MANAGEMENT
Our investment management professionals work diligently to provide direction and oversight
required to execute a comprehensive plan for each of our assets and to responsibly fulfill our
fiduciary duty to our partners, whether institutional or individual.

CAPITAL MARKETS
Steadfast Capital Markets Group is the securities and financial services division of
Steadfast Companies and its our goal to leverage the companys experience and track
record to offer best-in-class investment programs through the retail broker-dealer and
institutional channels.

Track Record

Steadfast Companies in-depth experience, deep industry relationships and market knowledge allow us to consistently
evaluate market trends, optimize performance of each of our investments and readily respond to, and capitalize on, changing
market opportunities.
Steadfast Companies has, directly or indirectly, sponsored 41 privately offered prior real estate programs that have raised
approximately $325 million from investors and completed the initial public offering for two public, non-listed REITs that have
raised approximately $1.5 billion from investors. Some of the countrys largest and most respected institutional investors, like
BlackRock, GE, JP Morgan and Amstar, have invested in Steadfast Companies private real estate funds.

18100 VON KARMAN AVE., SUITE 500

IRVINE, CA 92612 949.852.0700

7.

Steadfast Key Senior Real Estate Professionals

RODNEY F. EMERY, Chairman and Chief Executive Officer
Mr. Emery is the founder of Steadfast Companies and is responsible for the corporate vision and overall
guidance of Steadfast. He has been engaged in all of the $5 billion-plus of real estate the company has
acquired, developed or managed over the past 20 years. Mr. Emery has been instrumental in fostering
key relationships and opportunities that have resulted in Steadfasts development into a vertically
integrated company providing a comprehensive spectrum of commercial real estate services across the
United States and Mexico.
Prior to founding Steadfast Companies in 1994, Mr. Emery served for 17 years as the president of Cove Properties, a diversified
commercial real estate firm specializing in property management, construction and development, where he was responsible for
developing and/or purchasing and renovating over 7 million square feet of office, industrial and retail buildings.
Mr. Emery currently serves on the board of directors for The Rising Tide, a transitional housing and training program for youth
that are emancipated from social services and foster homes. In addition, Mr. Emery serves as Chairman for HomeWord, a
Christian organization designed to provide assistance to adults worldwide as they help young people make wise decisions and
lead positive, vibrant lifestyles. Mr. Emery is a graduate of the University of Southern California.

CHRISTOPHER M. HILBERT, President

Mr. Hilbert is responsible for the strategic planning, oversight and performance of Steadfast
Companies. As president, Mr. Hilbert leads all corporate and real estate related functions including
acquisitions, dispositions, project management and property management. Since joining Steadfast
in 2005, Mr. Hilbert has successfully led his team in the acquisition and development of over 45,000
multifamily units. Mr. Hilbert began his career in property management 24 years ago. Prior to leading
the organization, Mr. Hilbert served in several investment, underwriting and finance roles as senior vice
president with Nations Bank and Bank of America and as chief financial officer of National Housing
Development Corporation. Mr. Hilbert received his Bachelors Degree from San Diego State University and Master of Business
Administration from Queens University of Charlotte. As the chief supporter of Steadfasts Core Values, Mr. Hilbert serves on
the development committee and as the Annual Fund chair at Pacifica Christian High School.

ANA MARIE DEL RIO, Chief Administrative Officer

Ms. del Rio manages the companys corporate services group, including legal, compliance, risk
management, human resources, information technology and internal communications. Prior to
joining Steadfast Companies in 2003, Ms. del Rio was a partner in the public finance group at
Orrick, Herrington & Sutcliffe, LLP for over 10 years, representing both issuers and underwriters in
financing single-family and multifamily housing and other types of public-private and redevelopment
projects. Prior to practicing law, Ms. del Rio co-owned and operated a campaign consulting and
research company specializing in local campaigns and ballot measures for more than 14 years. Ms.
del Rio received a J.D. from the University of the Pacific, McGeorge School of Law and received an M.P.A. and B.A. from the
University of Southern California.

8.

C O M P A N I E S

Steadfast Key Senior Real Estate Professionals (contd.)

DINESH K. DAVAR, Chief Financial Officer
Mr. Davar is responsible for overall accounting and finance operations, including all reporting, budgeting
and treasury functions for Steadfast Companies. Mr. Davar also coordinates financing and accounting
functions for Steadfast Companies properties located throughout the United States and Latin America.
Prior to joining Steadfast Companies in 1996, Mr. Davar was an independent loan consultant handling
both residential and commercial mortgage loans. Mr. Davar served in various roles including Chief
Financial Officer of Cove Properties, a diversified real estate development firm specializing in property
management, construction and development. While at Cove Properties from 1980 to 1992, Mr. Davar
oversaw all aspects of the companys various real estate transactions, including financing, acquisition, development,
property management, and disposition. Mr. Davar was educated as a Chartered Accountant in New Delhi, India, and is a
graduate of Meerut University, in Meerut, India.

TIM MIDDLETON, Chief Investment Officer

Mr. Middleton is responsible for the companys real estate financing activities, including debt and equity,
and oversees the final underwriting of all new acquisitions. Since joining Steadfast in 2004, Mr. Middleton
has closed over $3.5B in transactions. He is also a member of Steadfasts Steering Committee, which
provides strategic planning and support to the company. Prior to joining Steadfast, Mr. Middleton was
with Trammell Crow Company, where he provided real estate advisory services to major corporate clients
located in the Los Angeles area, including L.A. Unified School District and The L.A. Times. Mr. Middleton is
a graduate of the University of New Hampshire, and received his MBA from Vanderbilt University.

CHRISTINE L. SCHOELLHORN, Executive Vice President, Property Management

As Executive Vice President for Steadfast Management Company, Christine is responsible for driving
profitable growth and enabling operational excellence for 35k apartments nationwide. Christine brings
25 years of broad management experience comprised of property and business operations, marketing,
training, recruiting and business development. Known for her strong track record of operational
excellence, innovative problem solving, and talent development, Christine held previous senior
leadership roles with The Irvine Company, BRE Properties, and Greystar. An inspiring leader whose
core competencies encompass development, garden, mixed use, high and mid-rise, HOA/fractured
condo, lender-owned, senior housing and bond financed real estate, her strong commitment to operational excellence,
innovative approach to solving business problems, and aptitude for partnering cross-functionally have reshaped Steadfast
Management Company. Christine earned her MBA at Pepperdines Graziadio School of Business and Management and
holds the Certified Property Manager designation through IREM.

18100 VON KARMAN AVE., SUITE 500

IRVINE, CA 92612 949.852.0700

Community
Guided by both our corporate mission and core values, Steadfast Companies is a loyal advocate of numerous community
outreach organizations that provide a diverse range of housing and social services to the children and families residing in the
communities we do business.

9.

C O M P A N I E S

Take Advantage of Steadfast Companies

Direct Investment Opportunity in Real Estate
Real estate is a critical part of any diversified portfolio, and investing directly in this asset class can magnify
its diversification advantages while providing enhanced risk and return. Steadfast Companies brings you the
benefits of direct investment in real estate through an innovative platform that gives you access to the best
in institutional-quality opportunities with the convenience of online access. For more information about how
direct real estate can help you meet your investment objectives, contact us at:
18100 Von Karman Ave.
Suite 500
Irvine, CA 92612
1-855-520-5777

C O M P A N I E S

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