Latest Fed Policy Statement Seems to Supports Soft Landing Scenario Underway

We continue to believe that the current pace of the economy remains supportive of the luxury apartment market in those key cities that are enjoying a positive migration of high-income earners and robust job markets. In our opinion there are three primary catalysts driving optimism for both the stock and real estate markets. Tight labor market conditions, the perception among some experts of forthcoming lower interest rates and evidence of cooling inflation – the combination of which seems to have the stock market trading at all-time highs.

Core inflation has been stubbornly high, and finally looks to have shown some plateauing in the latest CPI report for April, coming in at 3.6% year-over-year, down from the 3.8% March reading. The small disinflationary bump lower is a minor step in the right direction but doesn’t change the U.S. Federal Reserve’s (the “Fed’s”) higher-for-longer outlook for rates per the most recent Federal Open Market Committee minutes that shows the Fed remains in a wait-and-see mode.

The yield on the 2-year Treasury has decreased from 5.04% at the end of April to 4.93% as of Friday, May 24, and the 10-year Treasury yield has fallen from 4.69% to 4.46% over the same period. Typically, the direction of the bond market is viewed as leading the direction of monetary policy. The Atlanta Fed GDPNow estimate for the second quarter is 3.5% as of May 24, and down from 4.2% in early May.

For the present time, investor confidence has rebounded with Bank of America's Global Fund Manager Survey showing bullish sentiment among money managers, as 82% of money managers expect the Fed to start cutting rates in the second half of 2024 and 78% expect 2 or more rate cuts in the next 12 months.

The wealth effect is an economic theory that supports the notion that consumers spend more as the value of their assets rise, as the feeling of financial security plays a big role in discretionary spending. Conversely, critics of the theory argue that there is a knock-on effect in that increased spending fuels higher home values, which is a non-starter for those seeking more home affordability. If inflation comes down further with 30-year mortgage rates back under 7.0%, we think the pause in home prices will likely reverse due to what we see as still tight supply in some of the most coveted neighborhoods in the most sought-after cities.

To this point, Belpointe PREP, LLC (“Belpointe OZ”) (NYSE American: “OZ”) has begun receiving its first residents in its multifamily project in downtown Sarasota, Florida – Aster & Links. Investors and future tenants can now preview and pre-lease the available units and floorplans on the updated Aster & Links website, which displays the full-featured, Class A luxury apartment layouts with living spaces from 865 to 2,820 sq. feet, one-bed/one-bath to four-bed/three-and-a-half-bath and a wide array of options to fit the needs and wants of all future tenants.

In our view investors seeking a discounted real estate investment opportunity should consider exploiting the disparity between the current market price of Belpointe OZ’s (NYSE American: “OZ”) Class A units and its net asset value ("NAV”), notwithstanding the tax benefits that Belpointe OZ, as a Qualified Opportunity Zone Fund, has to offer. It remains our view that the market has failed to adequately price in the fact that Belpointe OZ owns a major asset that is in the process of being stabilized within the next 12+ months, and will be potentially generating free cash flow.

What’s more, investors do not need capital gains to take advantage of the NAV-to-Class A unit price disparity. However, 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, locking in capital gains and sheltering those gains through the purchase of Belpointe OZ units is a strategy that we think is worthy of consideration.

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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