FOR BROKER DEALER AND REGISTERED INVESTMENT ADVISOR HOME OFFICE DUE DILIGENCE USE ONLY.

 

DISCLAIMER

The information contained herein is confidential information. The recipient agrees to maintain the confidentiality of the  information and not to disclose it to any other persons. The information contained herein has been prepared solely for informational purposes and is not an offer to buy or sell or a solicitation of an offer to buy or sell any interests. Any such offer or solicitation shall only be made pursuant to the final confidential private placement memorandum relating to the Offering as amended, restated, or supplemented from time to time, (the “Memorandum”).

The Memorandum qualifies in its entirety the information set forth herein and should be read carefully prior to an investment in the Offering for a description of the merits and risks of an investment in the Offering. Investments may be speculative, illiquid, and carry a high degree of risk - including the potential loss of the entire investment. Any indication of interest from prospective investors in response to this presentation involves no obligation or commitment of any kind.

The investments presented herein are suitable only for sophisticated investors and require the financial ability and willingness to accept the high risks inherent in such investments. Any decision to invest should be made after conducting such investigations as the investor deems necessary and consulting the investor’s own investment, legal, accounting and tax advisors in order to
make an independent determination of the suitability and consequences of an investment.

This presentation is not intended to provide, and should not be relied on for, accounting, legal or tax advice or investment recommendations. Any offer will only be made to “accredited investors” in accordance with the rules of Regulation D as promulgated under the Securities Act of 1933, as amended, and “qualified purchasers” under the Investment company Act of 1940, as amended.

The presentation contains information as to the financial condition and results of operations of current and prospective investments. ERP 1031 INDUSTRIAL PORTFOLIO II DST (the “TRUST”) a Delaware Statutory Trust and an affiliate of ERP 1031, LLC, a Delaware limited liability company, (the “Sponsor” or “ERP”), make no representation or warranty as to the completeness or accuracy of such information.

Except where otherwise indicated herein, the information provided herein is based on matters as they exist as of the date of preparation and may not be updated or otherwise revised to reflect information that subsequently becomes available, or circumstances existing or changes occurring after the date hereof.

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Past performance is no indication of future results. There can be no assurance that these investments will achieve any targets or that there will be any return of capital. Historical occupancy rates provide no indication of future occupancy rates. The companies depicted in the photographs herein may have proprietary interests in their names and trademarks. Nothing herein shall be considered an endorsement, authorization, or approval of ERP Industrials, or the investment vehicles they may offer, of the aforementioned companies. Further, none of the aforementioned companies are affiliated with ERP Industrials in any manner.
The companies listed in the Selected Case Studies may vary, due to a number of uncontrollable factors, and may also be significantly different than the names listed herein.

This presentation also contains statements that are forward-looking statements and projections. These forward-looking statements, which are subject to numerous risks, uncertainties and assumptions, include projections of future financial performance, anticipated growth strategies and anticipated trends. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements
expressed or implied by the forward-looking statements. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements.

Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements or has any duty to update such forward-looking statements. Investors should not rely on forward-looking statements in making their investment decisions.

The distribution of this presentation in certain jurisdictions may be restricted by law. This presentation is only directed at persons to whom it may be lawfully distributed, and any investment activity to which this presentation relates will only be available to such persons. It is the responsibility of any potential investor to satisfy itself as to the full compliance with applicable laws and regulations of any relevant jurisdiction, including obtaining any governmental or other consent and observing any other formality prescribed in such jurisdiction. 

Securities offered through American Alternative Capital, LLC, member FINRA.
Only available in states where American Alternative Capital, LLC is registered.
American Alternative Capital, LLC is not affiliated with any other entities identified in this communication.
Additional information is available upon request.

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Past performance is no indication of future results. Past activities of investment entities sponsored by ERP provide no assurance of future results. Historical and present occupancy rates provide no indication of future occupancy rates. There can be no
assurance that an investment in the Interests or the Properties will achieve any targets.

There can be no assurance that there will be any return of capital. An investment should only be considered by persons who can afford a loss of their entire investment. An investment in the Interests is highly speculative and involves substantial risks including,
but not limited to:
• risks associated with investments in real estate; including competition, environmental risks and compliance with the American with Disabilities Act;
• the impact of pandemics, including the COVID-19 pandemic;
• the impact of the oil and gas markets;
• lack of liquidity of the Interests;
• the holding of a beneficial interest in the Trust with limited voting rights;
• risks associated with the limited capitalization of the Master Tenant as the Master Tenant is a newly formed Delaware limited liability company and is owned by the Sponsor. The capitalization of the Master Tenant will be provided solely by rents
received from the Tenant Leases;
• performance of the Master Tenant under the Master Lease;
• risks relating to the terms of the financing for the Properties, including, but not limited to, the risk of rising interest rates and the impact that rising interest rates may have on the Properties’ cash flow and value;
• expiration of the Tenant Leases between the Master Tenant and the Tenants of the Properties or the nonperformance of the Tenants under such Tenant Leases;
• lack of diversity of investment;
• reliance on the Master Tenant (and the Property Manager engaged by the Master Tenant) to manage each Property;
• the Interests being subject to the restrictions in the Trust Agreement;
• the existence of various conflicts of interest among the Sellers of the Properties, the Sponsor, the Trust, the Master Tenant, the Property Manager and their Affiliates;
• significant material tax risks, including treatment of the Interests for Section 1031 exchange purposes;
• the costs and timing of any planned improvements required for a Property might exceed budgeted costs and/or the projected timeframe for such improvements. To the extent reserved equity or surplus cash flow is insufficient to fund such refurbishment costs, the strategic plan relating to each Property or the Portfolio may not be executable;
• there is a limited pool of potential buyers for real estate in the Properties’ geographic area. Real estate in the Permian Basin can at times be difficult to sell at prices that investors in the Trust may find acceptable. The potential difficulties in selling real
estate in the Properties’ geographic area or market may limit the ability to sell the Properties, or any portion thereof. The Trust and/or the Sponsor may be unable to find buyers for the Properties at suitable prices; the Trust expects that its properties will be leased to companies operating directly or indirectly in the energy markets generally and the oil and gas industry specifically
(“Energy Companies”). Energy Companies may be affected by fluctuations in the prices of commodities, including, for example, natural gas, natural gas liquids, and crude oil, in the short and long term. Natural resource and commodity prices have
been very volatile in the past, including significant and prolonged declines in the prices of such commodities, and such volatility is expected to continue;
• the operating results of Energy Companies in the broader energy sector are cyclical, with fluctuations in commodity prices and demand for commodities driven by a variety of factors. The highly cyclical nature of the energy sector may adversely affect the earnings or operating cash flows of Energy Companies, which could have a negative impact on rents paid to the Properties;
• a significant decrease in the production of natural gas, crude oil, or other energy commodities would reduce the revenue, operating income and operating cash flows of certain Energy Companies and, therefore, impede or otherwise totally limit their
ability to make, among other things, rental payments to the Properties;
• a sustained decline in demand for natural gas, natural gas liquids, crude oil and refined petroleum products could adversely affect an Energy Company’s revenues and cash flows and, therefore, impede or otherwise totally limit their ability to make,
among other things, rental payments to the Properties;
• there is an inherent risk that Energy Companies may incur environmental costs and liabilities due to the nature of their business and the substances they handle. Moreover, the possibility exists that stricter laws, regulations, or enforcement policies
could significantly increase the compliance costs of Energy Companies, and the cost of any remediation that may become necessary. To the extent that any of such liabilities, fines, penalties or other costs are significant, they could result in the
bankruptcy of Energy Companies that are tenants of the Properties;
• the profitability of Energy Companies could be adversely affected by changes in the regulatory environment, including, but not limited to, regulations that pertain to climate change. Energy Companies are subject to significant non-U.S., U.S, federal, state and local regulation in virtually every aspect of their operations. Such regulations may impose additional costs or limit certain operations by Energy Companies operating in various sectors and, therefore, impede or otherwise totally limit their ability to make, among other things, rental payments to the Properties;
• the Properties may be subject to various legal proceedings and claims that may arise in the ordinary course of business, some of which raise complex factual and legal issues and are subject to uncertainties;
• cyber security breaches and identity theft; and
• the Trust will be required to indemnify the Trustees, the Master Tenant, the Sponsor, affiliates of the Sponsor, including any ERP and ERP affiliated entity, and each of their respective managers, members, officers, directors, employees, shareholders, board
members, agents and partners (each, an “Indemnified Person”) for liabilities incurred in connection with the affairs of the Trust, the Trust Properties and the transaction documents. Such liabilities may be material. The indemnification obligation of the
Trust would be payable from the assets of the Trust.

INVESTORS MUST READ AND CAREFULLY CONSIDER THE DISCUSSION SET FORTH UNDER “RISK FACTORS” FOR A COMPLETE DISCUSSION OF THESE AND OTHER RISKS PERTAINING TO THIS INVESTMENT.

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Additional information is available upon request.

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ERP 1031, LLC.,  American Alternative Capital LLC and Alts Fund LINK, LLC are not affiliated.