The Disconnect Between Net Asset Value Versus OZ Class A Unit Price Continues to Narrow

It’s been said that sometimes the market just gets asset valuation wrong. We think this can be particularly accurate when dealing with a non-correlating subset of a larger related category—namely multifamily residential real estate as a subset of the broader commercial real estate asset class.

This column has previously noted that both Blackstone and KKR have recently made big bets in the multifamily apartment sector. In our view, these latest moves acknowledge that much has changed in the high-priced business of home ownership, and when compared to the varied and rising costs associated with ownership—versus the single price one pays to rent a full featured luxury apartment, often situated in the same neighborhood—multifamily residential real estate as an assets class has much upside potential for growth and income.

The current home price appreciation cycle is arguably one of the longest in history without a major correction, and yet many professionals, retirees, and families that demand proximity to work, great schools, excellent health care, top entertainment venues, restaurants, bars, and the best recreation options, continue to opt for a Class A luxury apartment experience in prime urban downtown districts.

As of May 31, 2024, Belpointe PREP, LLC (“Belpointe OZ”), the only publicly traded qualified opportunity fund, announced its unaudited quarterly net asset value (“NAV”) as of March 31, 2024 of $361.66 million, or $99.59 per Class A unit. As of July 31, 2024, Belpointe OZ’s Class A units trade at discount of just over 29% to NAV, up from a discount of over 40%. In our view, investors seeking a discounted real estate investment opportunity should consider exploiting what’s left of the disparity between the current market price of Belpointe OZ’s (NYSE American: “OZ”) Class A units and its NAV, before that gap closes, notwithstanding the tax benefits that Belpointe OZ, as a qualified opportunity fund, has to offer.

Located within two prime opportunity zones in Sarasota and St. Petersburg, Florida, Belpointe OZ is currently moving new residents into its Aster & Links luxury high-rise community, in downtown Sarasota, and plans to open its doors for new residents at Viv, its luxury high-rise community in downtown St. Petersburg, in 2025.

Investors and future tenants can now preview and lease the remaining available units and floorplans on the updated Aster & Links website, which displays the luxurious layouts with living spaces ranging from 865 to 2,820 sq. feet, featuring one-bed/one-bath to four-bed/three-and-a-half-bath units and a wide array of options to fit the needs and wants of all future tenants.

It is our view that the market for Belpointe OZ’s Class A units still fails to adequately price in the fact that Belpointe OZ owns both Aster & Links and Viv, two major assets that could be potentially generating cashflow within the next 18 months; although it seems that some advisors and investors are now starting to recognize the opportunity. What’s more, investors do not need capital gains to take advantage of current the NAV-to-Class A unit price disparity.

We believe advisors and investors seeking real estate assets with income-producing potential, trading at a discount to NAV and located within one of the fastest growing states in the U.S., should examine in detail the progress Belpointe OZ has made during a very challenging time for developers of ground up Class A multifamily communities and give thought to adding Belpointe OZ’s Class A units to a diversified portfolio of investments. You can find out more about Belpointe OZ (NYSE American: “OZ”) at belpointeoz.com.

However, it’s important to remember, without investing capital gains investors will not qualify for any of the Opportunity Zone program tax benefits. But with the stock market gains being what they are year-to-date, we believe investors, particularly those in the tech sector and leading AI stocks who may be enjoying generational wealth-building capital gains, should consider sheltering those gains in a tax-deferred qualified opportunity fund, like Belpointe OZ (NYSE American: “OZ”) who’s Class A units trade on the NYSE American.

Belpointe OZ

255 Glenville Road

Greenwich, CT 06831

T: (203) 883-1944

E: IR@belpointeoz.com

The information in this communication is for illustrative, educational and informational purposes only and is subject to change. Nothing in this communication is or should be construed as an offer to sell or the solicitation of an offer to buy any securities. Offers may only be made by means of a prospectus.

Belpointe PREP, LLC (“Belpointe OZ”) has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Prior to making an investment decision, you should read Belpointe OZ’s prospectus and the other documents that it has filed with the SEC in their entirety, and carefully consider its investment objectives and strategy, risk factors, fees and expenses and any tax consequences that may results from an investment in the offering. Copies of these documents can be obtained free of charge from www.sec.gov or investors.belpointeoz.com or from any broker-dealer participating in the offering.

The information in this communication should not be relied upon as investment or tax advice. You should consult with your own investment and tax advisers concerning the federal, state and local income tax consequences of purchasing, owning or disposing of securities in the offering, and of Belpointe OZ’s election to qualify as a partnership and qualified opportunity fund for federal income tax purposes. There is no guarantee that Belpointe OZ will continue to qualify as a partnership or qualified opportunity fund.

Past performance is not an indicator or a guarantee of future performance. An investment in the offering to which this communication relates involves a high degree of risk, including a complete loss of your investment, and may not be suitable for all investors. The price of Belpointe OZ’s securities will fluctuate in market value and may trade above or below net asset value. Brokerage commissions and expenses will reduce returns.

The offering to which this communication relates is being made on a best-efforts basis on behalf of Belpointe OZ through Emerson Equity, LLC, Member FINRA, SIPC, as managing broker-dealer.

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