BR Diversified Industrial Portfolio III, DST

Summary

BR Diversified Industrial Portfolio III, DST (the “Parent Trust”) represents an attractive investment opportunity in an already assembled diverse portfolio of industrial properties located in desirable high growth Sunbelt market locations. The Parent Trust seeks to provide investors with stable monthly cash flow pursuant to in-place, triple net leases to a diverse group of industrial tenants and the potential for capital appreciation due to high demand for industrial properties within these highly sought-after infill locations coupled with the ability to drive future rent and net operating income (NOI) growth with current rents substantially below (approximately 30% on average) market rates.

Investment Considerations

Broad tenant diversification from six industrial buildings home to nine different tenants located in three Sunbelt states with projected outsized population growth compared to the national average.

• All properties are in infill locations within highly sought-after submarkets due to their excellent connectivity to large population centers, with limited development potential limiting new supply.

• Strong market and submarket fundamentals with projected low vacancy rates of less than 4.5% - 6.5% on average and cumulative rent growth of 20% - 24% on average through 2027. (Source: Costar)

• Rental rates substantially below market rates, with current lease rates averaging 30% below current market rental rates providing significant upside rent growth potential. (Source: Appraisals)

• Shorter term leases provide opportunity for outsized NOI growth and appreciation potential.

• The industrial real estate sector is forecasted to have the highest NOI growth among all real estate sectors through 2028. (Source: Green Street, A Great Year Ahead for Commercial Real Estate, September 2023)

Business Plan

BVEX and BIGRX believe the Properties are well positioned for additional rent growth and value creation as a result of the high projected demand for industrial properties in desirable locations within high growth markets and with rents substantially below (approximately 30% on average) current market rates. The Properties are located in some of the strongest industrial markets in the Sunbelt with projected low vacancy rates of less than 4.5% - 6.5% on average and cumulative rent growth of 20% - 24% on average through 2027. Further, BVEX and BIGRX believe that an investment in the Parent Trust will provide investors with an attractive investment opportunity, through the participation in an already-assembled portfolio of industrial real estate assets which are expected to generate a steady and stable stream of income pursuant to in-place, triple net leases to a diverse group of industrial lessees.

The ownership objectives for the Properties will be to (i) preserve the capital investment; (ii) make monthly distributions starting at the annual rate of 4.40% per annum in 2024, which may be partially tax-deferred as a result of depreciation and amortization expenses; (iii) provide institutional property management oversight to maintain the high quality and high marketability of the Properties to maximize future value; and (iv) realize profit through the ownership and eventual sale, disposition, transfer or merger to facilitate a Section 1031 Exchange (under limited circumstances) or an exchange transaction pursuant to Section 721 of the Code with respect to the Properties within approximately seven to ten years.