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Best Places To Invest In Real Estate 2025 Last Updated: February 15, 2o25 Steve Nabity February 15, 2025 Wealth Generation with Skyline Point Greater access to real estate investing. Start Investing Best Places To Invest In Real Estate 2025 The highly wealthy people on Earth might be thinking about buying a house on the moon. However, an alert real estate professional would immediately say “Location! Location! Location!”. After all, zero gravity might not be great for hanging pictures on the wall. Knowing what to invest in is important. Knowing WHERE to invest in is also equally important, especially if you are looking to invest in real estate. The winners of the last 10-20 years may not necessarily be the winners of the next 10-20 years. As a business owner or an entrepreneur, you would likely think hard about selecting the right location for setting up your business. Investing in real estate is similar. One has to pick the right asset subclass in real estate along with the right location for a property. Skyline Point Capital analyzes many factors when evaluating markets to invest in. Some key factors in our decision-making process are population dynamics, employment prospects, climate, affordability, and the demand for housing. This process helps us in evaluate some of the most promising markets for real estate investing. In this article, we will look at 5 promising cities that we believe will be the best places to invest in real estate for 2025 and beyond. We will also discuss our investment philosophy and how you can start your real estate investing journey. Phoenix, Arizona Phoenix has seen steady population growth over the past 3-4 decades. The population has grown from around 789,000 in 1980 to over 1.65 million as of 2023. According to data from the Bureau of Labor Statistics, the number of employed persons in the Phoenix MSA has also been growing steadily. The demand for housing has been on a long-term uptrend in the Valley of the Sun. The average sale price per sq ft has tripled in the last 8-10 years. Average rents are also on the rise. However, despite this rise, the average rent in Phoenix is still cheap. It was estimated to be around 24% of median household income compared to a national average of 30%. So, with the local economy growing and inward migration, the demand for housing is expected to remain robust. source: Marcus and Millichap Multifamily 2024 Investment Forecast Such positive trends indicate that Phoenix could be in a longer-term uptrend. It positions the metro area as one of the best places to potentially invest in for 2025 and beyond. Skyline Point Capital currently does not have an investment in Phoenix but is actively looking at promising markets with strong fundamentals. Nashville, Tennessee We covered Nashville in our Best Cities To Invest In Real Estate in 2024 article. Looking ahead to 2025, we continue to believe that Nashville will perform well. The growth in the Music City has been impressive and there is no reason for it to slow down. Job counts in most of the important sectors are at record levels. The economy appears to be as vibrant as the music scene. A high job count points to hiring from within the metro and outside, leading to inward migration. A growing population will likely lead to a strong demand for housing. The average rent over the last 8-odd years has grown by 60%. Home prices have also doubled during that time. source: Marcus and Millichap Multifamily 2024 Investment Forecast The population of the wider Nashville MSA has grown from around 948,000 in 1980 to over 2.1 million in 2023. The growth rate over the past 3 decades has been higher than the national average. Automotive manufacturing and advanced manufacturing play a significant role in the local economy. These sectors are poised to benefit from the reshoring trend and likely policies of the new administration. So, there are a few reasons why we think Nashville, the Music City, could be hitting the right notes in 2025. Skyline Point Capital invested in Keystone Farms, a luxury 90-unit apartment complex located 20 minutes from downtown Nashville and in close proximity to golf courses and beautiful lakes. Nashville City Keystone Farms Atlanta, Georgia The Hollywood of the South, the City in a Forest, and the Birthplace of Coca-Cola, Atlanta is known by many names. It is also known for its hot housing market. The Atlanta metro area is expected to be among the nation’s most active for net inward migration. The population growth rate in the Atlanta metro area has been very robust. From around 2.2 million in 1980, the population has grown to over 6.3 million as of 2023. As per data from the US Bureau of Labor Statistics, the number of employed persons in the Atlanta MSA has grown steadily during the past few decades. Rents and the average sale price per square foot were on an uptrend till about 2022. Since then, they have been pulling back a bit. However, they are still up significantly from the 2014 and 2015 levels. source: Marcus and Millichap Multifamily 2024 Investment Forecast Atlanta has America’s third-largest concentration of Fortune 500 companies and is the global headquarters of several large corporations. IT, Media, and Film Production are growing industries in the Atlanta region.  Atlanta is the sixth-largest metro area in the US and a major economy in the south. We believe that it has the fundamentals in place to perform well over the long term even though the near-term outlook might not look spectacular. Tampa Bay, Florida The Tampa Bay market typically comprises Tampa and St. Petersburg. The population of the Tampa Bay area has doubled over 4 decades. It was around 1.6 million in 1980 and close to 3.3 million in 2022. Tampa Bay’s port is the largest in Florida. Finance, retail, and insurance are major contributors to the local economy. Tampa also has warm weather and scenic beaches. A growing job market,

Why Mixed-Use Properties Are the Future of Commercial Real Estate Last Updated: February 06, 2o25 Steve Nabity February 06, 2025 Wealth Generation with Skyline Point Greater access to real estate investing. Start Investing Introduction If real estate properties were alive and at a party, the mixed-use property would probably be the most popular. Why? Because it would always have the perfect blend of work and play! Mixed-use properties in commercial real estate are those with residential, office, retail, and recreational spaces. Such properties are increasingly becoming popular because the current generation prefers them. Millennials and GenZ prefer convenience and lifestyle integration. They want a comprehensive experience where they can walk from their residence to work and then relax after a long day. There is a shift towards urban living with spaces that combine live, work, and play. In this article, we will discuss changing consumer preferences, why mixed-use properties make commercial sense, and what some of the challenges are in developing/managing mixed-use properties. Urbanization and Changing Consumer Preferences Urbanization has led to lifestyle changes. There is an increasing preference for spaces that blend different aspects of an urban citizen’s life. This means a seamless blend of live, work, and play. GenZ and Millennials value easy access to work, recreation, dining, and retail spaces. They tend to look for environments that support the flexibility of blending various facets of their lifestyle. There is also an aspiration among the younger population for a flexible yet well-connected lifestyle where most areas of interest are within walking distance. Communities, where residential, work, retail, dining, and entertainment spaces coexist, promote a more sustainable lifestyle. Hence, they tend to be very popular. If such communities are built on a large scale, they can significantly shape the urban development of cities. Developers will have to adapt their approach to cater to the evolving needs of the modern citizen. Maximizing Property Value and Revenue Mixed-use properties typically include a combination of commercial, residential, and retail real estate. Each one of these belongs to a different sub-segment of real estate. The income generation and the financial dynamics for each one are different. Residential leases are different from commercial or retail ones. The profile of the tenants is different too. The good thing about earning income from different types of real estate is diversification. Firstly, the owner/investor is not reliant on a single or a few tenants. If some of them default, it does not lead to a complete halt in the cash flow. Secondly, if one sub-segment of real estate goes through a downturn, another sub-segment may offset it in some way. If there is a pandemic, for example, and retail businesses face challenges, people still need a place to stay. So, residential might keep the income flowing in. Single-use spaces like an office building or a shopping center can pose the risk of a sub-segment-driven downturn. However, mixed-use properties can be less vulnerable to market fluctuations and may offer a more stable source of income for investors/owners. Economic Resilience and Diversification Let us talk a little more about how diversification of real estate investments leads to higher economic resilience. If there is a commercial slowdown, as pointed out above, then residential real estate can provide steady income and balance out the volatility. Similarly, if there is a slowdown in the residential segment, a commercial or retail property might balance out the losses as businesses still need to operate. Much depends on the type of tenants and the kind of commercial or retail leases at a property. But, the benefit of diversification exists. As an investor, the ultimate goal is to create a low-correlation low-volatility portfolio that does not have wild drawdowns. Investors spread their risk by investing in equities, bonds, real estate, gold, and other asset classes. Within real estate, a resilient portfolio can be built by considering mixed-use properties. Efficient Land Use and Sustainability Mixed-use properties have the potential to make more efficient use of land by combining residential, commercial, and retail spaces at a single location. It can lead to better planning and better development of common areas. In an urban environment where space is limited, such efficiency can be very beneficial for all the stakeholders. Efficient use of space also helps preserve the surrounding natural environment. Incorporating green building standards like energy-efficient systems, waste-reduction practices, water-conservation systems, and sustainable materials can reduce the carbon footprint and contribute positively to the environment. Eco-conscious tenants and investors may find such well-planned sustainable mixed-use properties an attractive proposition. Ultimately, the longer-term viability of the property is enhanced. Cities that are looking to become more sustainable may also prefer the development of such properties. Get More Content Like This Right to Your Inbox Enhancing Community Engagement and Convenience Mixed-use properties have the potential to foster a stronger sense of community as they seamlessly blend residential, retail, and commercial spaces. They create a comprehensive environment where people can work, live, and socialize in close proximity. The need for long daily commutes is eliminated as people get easy access to all their essential needs within walking distance. More people frequenting retail, dining, and entertainment spaces can generate a more vibrant atmosphere. Frequent interactions among community members can lead to a stronger sense of community. Engagement levels go up not just for people, but also for businesses. Increased visibility and social interaction can ultimately benefit the community as a whole. Attracting Tenants and Long-Term Occupancy Mixed-use developments consist of a variety of properties. So, they tend to attract a broader range of tenants. The presence of a variety of people appeals to many types of businesses too. So, more variety of businesses is great for tenants as they get more choices. More variety of people is great for businesses looking for footfalls. Convenience and better business prospects are what a mixed-use development can offer. Mixed-use developments also have the potential to influence lease terms. If the residents are happy with the convenience and the choices on offer, they may be willing

Your Partner in Exclusive Real Estate Opportunities for Business Owners Last Updated: February 06, 2o25 Steve Nabity February 06, 2025 Wealth Generation with Skyline Point Greater access to real estate investing. Start Investing The Appeal of Exclusive Real Estate Opportunities Real estate is a powerful tool for building wealth. It has the potential to offer capital appreciation, regular rental income, and important tax benefits. Some segments of the real estate asset class also tend to be less volatile than others and can be a stabilizing factor during times of uncertainty. Skyline Point Capital has been in business and real estate investing for a few decades. It has built a portfolio of assets for its investors in different locations across sub-segments. Our team of experts has the experience and expertise to evaluate investment opportunities and successfully execute transactions. Our trusted network of professionals on the ground enables us to efficiently manage our portfolio properties. (The Uptown at Cole Park, Dallas TX – one of our portfolio properties) In this article, we will discuss: Why Real Estate can be an astute investment for achieving your financial goals How Skyline Point Capital works with business owners and entrepreneurs How Real Estate can be part of a business strategy and not just a standalone investment Actions that business owners and entrepreneurs can take right away to get started Why Real Estate is a Smart Investment Is real estate a good investment? Don’t just take our word or anyone’s for it. Let us explore what real estate can offer as an investment vehicle. Firstly, real estate can be a long-term investment as it is less volatile than stocks or cryptocurrency. Apartments, offices, and retail spaces don’t just vanish overnight. A stable asset in a strong location will grow with time and inflation. Its rents will increase progressively and there is strong potential for significant capital appreciation over the long term. Infrastructure developments, changes in the supply-demand dynamics, migration, and economic development can also positively impact real estate. Real estate also offers important tax advantages like accelerated depreciation, interest deduction, and the 1031 exchange to defer capital gains tax. Having good quality tenants on longer leases offers predictability and visibility of rental income. Investors can either be actively involved with their real estate investments or earn a passive income by working with professionals. The following is a study conducted by real estate services firm CBRE where it compared 4-year rolling returns for the S&P 500 and NCREIF indices. Stock returns, in general, were higher than real estate with some exceptions. How Skyline Point Capital Empowers Entrepreneurs to Invest in Real Estate Entrepreneurs and business owners run businesses that generate cash flows. Some of the surplus cash flows need to be invested either to grow the business, execute a strategy, or simply fulfill the financial goals of the owner. Whatever the case, putting the money to work is the most important thing. There are several ways the money can be invested. Skyline Point Capital believes that real estate provides one of the most promising opportunities for entrepreneurs and business owners to reach their business/financial goals. It has been co-investing alongside business owners and entrepreneurs for several years. Skyline Point Capital has built expertise and networks to identify the most promising opportunities, figure out how much to pay for such opportunities, and then operate the assets to receive all the benefits that real estate has to offer. Real estate investing isn’t just about identifying an opportunity, estimating its value, and purchasing it. One has to think broadly about how real estate will fit into an existing portfolio of investments, what it will add to such a portfolio, and what type of real estate to invest in. The investment decisions have to be aligned with the longer-term financial goals of the investor. Skyline Point Capital believes in taking such a broader view and works with business owners and entrepreneurs to achieve investment success rather than simply acting as an intermediary to purchase a property. We believe in tailoring the approach to suit the investor’s needs. Integrating Real Estate Investments into Your Business Strategy Real estate isn’t just an investment asset class for an individual. It can be part of a business strategy. We talked about this in great detail in our previous post on The Power of Real Estate for Small Business Growth.  Real estate investments can actually be a part of a business strategy. Such investments can provide regular cash flow which can be used to fund the working capital requirements of a business. Selling existing real estate investments for capital gains can fund growth capex. Alternatively, regular rental income from real estate can also fund capex or loan payments for any growth capital that is borrowed. Real estate can also add stability to the finances. For example, when there was a pandemic, businesses got disrupted across the board. However, people still needed a place to live, and multifamily apartments generated rental yields. The volatility of business cycles can be offset to some extent by the stability of a good-quality real estate investment. If one knows the rental rates and the term of the lease, then there is a level of predictability. Key business decisions can be made knowing that cash flow from a real estate investment is likely to come in the future. Actionable Steps for Entrepreneurs Are you wondering how to invest in real estate? Maybe you have questions about evaluating the right kind of opportunities for an investment. Or perhaps you just want to know where to get started. Some of the things that Skyline Point looks at when evaluating opportunities are firstly knowing what markets to be in, what the macroeconomic environment is like, what business strategy to execute once a property is acquired, and what sort of returns to expect. There are plenty of markets and metro areas in the US. Skyline Point Capital likes to be in areas that are within its circle of competency. It also looks at the overall

Mastering Business Management and Real Estate: A Winning Strategy for Entrepreneurs Last Updated: February 06, 2o25 Steve Nabity February 06, 2025 Wealth Generation with Skyline Point Greater access to real estate investing. Start Investing Mastering Business Management and Real Estate: A Winning Strategy for Entrepreneurs It is often said that the best entrepreneurs and business owners are adept at allocating capital. They understand what return on capital is and how to put capital to work. Entrepreneurs may either invest the money within their businesses or make strategic allocations to other asset classes. Real estate can be that asset class, though it has its risks and rewards equation. In this blog, we will explore the parallels between managing a business and real estate. We will look at the risks vs reward equation that real estate investments offer to entrepreneurs and business owners. We will discuss some strategies needed to effectively manage real estate investments. Making real estate investments ultimately has to be aligned with the longer-term business and personal goals of the entrepreneur. For those interested in delving deeper into real estate investment management, we will share some tools and resources that help. Lastly, we will talk about how you can get started with your real estate investment journey. The Dual Challenge of Business and Real Estate The Risks vs. Rewards of Real Estate Investments Strategies for Effective Real Estate Investment Management Aligning Real Estate Goals with Business Strategy Tools and Resources for Managing Both Real Estate and Business The Dual Challenge of Business and Real Estate Entrepreneurs turn to real estate investments for a variety of reasons. They may want to diversify their source of income, build generational wealth, achieve personal financial goals, look for stability from a lower-correlation asset class, or make a strategic investment as part of a business strategy. Entrepreneurs who invest in real estate may see the asset class as one that offers the potential for capital appreciation over time, a hedge against inflation, and an offsetting factor in times of market volatility. Some business owners and entrepreneurs prefer real estate for its ability to generate rental yield and a source of consistent passive income. Even businesses offer a lot of the above benefits. A source of income, a hedge against inflation, a means to build generational wealth, and so on. Business and real estate both require strategic planning, effective capital allocation, and consistent oversight. Balancing revenues and expenses, getting the tax planning right, staying on top of negotiations, and maximizing returns are other commonalities between business and real estate investing. Scaling a business or a real estate portfolio requires informed decision-making. By recognizing such parallels between business and real estate, entrepreneurs and business owners can leverage their business acumen to navigate the complexities of real estate investing. The Risks vs. Rewards of Real Estate Investments Before making a real estate investment, entrepreneurs and business owners first need to understand the risks associated with and the rewards offered by real estate as an asset class. Rewards Income-producing real estate offers rental yields. This cash flow can generate consistent monthly income for the investor. If the property is being professionally managed by someone other than the business owner or entrepreneur, then the rental cash flows become passive income. Real estate also has the potential to appreciate in value over time. The appreciation can happen due to upgrades/improvements made to the property which boosts the rents, market trends, certain developments in the micromarket which boosts demand, or due to inflation. Whatever the reason, an appreciation in the value of a property drives investment returns in a big way. Real estate offers a few important tax benefits to its investors. One of them is depreciation (including accelerated depreciation) which can bring down the taxable income. The interest paid on mortgages can also lead to a deduction and reduce tax liabilities. Risks The rewards offered by real estate also come with some risks. The first risk is that of managing the tenants. Making sure that the leases are renewed at market rents, timely payment of rent, and maintaining high satisfaction among the tenants all require time and effort. Another key risk is that of managing the financial side of a real estate investment. Vacancies and rent payment defaults can reduce cash flows. Having high tenant concentration can also pose the risk of default. Unexpected repairs or capital expenditures can put a strain on the cash flows further. Certain expenses like taxes and insurance are fixed no matter what happens on the income side. Lastly, there is market-level risk. Real estate is not disconnected from the overall economy. Economic downturns can cause volatility in several sectors including real estate. While real estate might have a lower correlation to popular asset classes like stocks, its value can change unfavorably if the economic situation or the macro environment is unfavorable. Strategies for Effective Real Estate Investment Management While the risk from any investment cannot be completely avoided, it can be managed. It is often said that risk management is as important a skill (if not more important) as choosing what to invest in. In real estate too, there are certain strategies that business owners and entrepreneurs can follow to mitigate risk and maximize returns. Those who can balance the risks and rewards of an asset class can become successful investors of that asset class. Risk Mitigation One of the most common errors real estate investors make is underestimating expenses for repairs and maintenance. Not accounting for them can artificially boost the net operating income. However, when such expenses catch up, it can throw off all return projections and lead to severe financial strain. So, it’s best to be conservative when budgeting for repairs, maintenance, and capital expenditures. Investors also need to stay abreast with the latest market trends. While it does not have to be analyst-level knowledge, one should be aware of where interest rates are, how the demand for real estate is, and any neighborhood/location-specific developments. Lastly, many of the risks

5 Reasons Investing in Nashville Real Estate Is a Smart Move Last Updated: February 06, 2o25 Steve Nabity February 06, 2025 Wealth Generation with Skyline Point Greater access to real estate investing. Start Investing 5 Reasons Investing in Nashville Real Estate Is a Smart Move Nashville aka “The Music City” is best known for being the birthplace of country music. It does have a thriving music scene even today and a strong economy to go along with it. The population in the Nashville MSA has been growing at over 20% every decade for the past 3 decades. This number is far higher than the national average. Advanced manufacturing and automotive manufacturing are among the largest employment-providing sectors in the area. Educational institutions like Vanderbilt University provide the STEM talent needed to fuel the growth of the technology and healthcare-related industries. Home prices, as per the Zillow Home Index, have shot up from around $225,000 in 2016 to well over $440,000 in 2024. There is an influx of new residents seeking a vibrant lifestyle and new construction to support the growth. Demand for housing has also led to an increase in rents. Nashville has lately been ranking among the top cities for the highest year-on-year rent increases. Job counts in most of the important sectors are at record levels. The economy appears to be as vibrant as the music scene. A high job count points to hiring from within the metro and outside, leading to inward migration. In short, what is there not to like about Nashville from a real estate perspective? In this article, we will look at Nashville’s population growth, one of the key factors driving the demand for residential and commercial real estate. A growing population also needs to be supported by a growing economy. So, we will discuss Nashville’s economy and job market. Next, we will explore Nashville’s rental demand and policy environment. We will also look at the diverse residential and commercial real estate investment opportunities that Nashville can offer investors. We will end the article by highlighting some important trends in the Nashville real estate market. Strong Population Growth Booming Economy and Job Market High Rental Demand Diverse Real Estate Investment Opportunities Nashville’s Real Estate Market Trends 1. Strong Population Growth Nashville’s population increased by 14.7% from 2010 to 2020. The population growth for the 10-year period was the highest since 1960-70. The Nashville metropolitan area (MSA) had 10-year population growth rates of over 20% since 1990. So, while the population growth has been healthy in the city, the suburban areas seem to have experienced even stronger growth rates. The population of the MSA doubled from over a million in 1990 to over 2 million by 2020. The population of Nashville, as of 2023, was 687,788 as per data from the US Census Bureau. The population growth in the Nashville area is driven by a combination of factors. There is no state income tax in Tennessee. Companies have also been relocating from more expensive, regulated, and denser parts of the country. Job opportunities, especially high-skilled jobs in emerging areas such as technology and manufacturing are also key drivers of population growth. The average home value in Nashville, as per Zillow’s Home Value Index, was $428,358 in November 2024. Nashville offers a dynamic lifestyle with a thriving music scene, diverse cultural attractions, vibrant nightlife, outdoor spaces, and a relatively lower cost of living. 2. Booming Economy and Job Market Nashville is home to four major country music labels. The city is often called the home of country music. The music industry is a big part of the local economy. However, the largest employer is HCA Healthcare, the largest private hospital operator in the world. Besides HCA, there are 300 healthcare companies operating in the Nashville area. The Vanderbilt University Medical Center is also among the top employers in Nashville. The technology sector in Nashville has been a growing one in recent years. Software giant Oracle is setting up a 65-acre campus in Nashville while Amazon already has an established facility in Nashville which serves as a bug of the southeastern US. Health-tech startups are also increasingly locating themselves in Nashville. The strong local economy of Nashville is reflected in the low unemployment rate of the MSA compared to the national average. The unemployment rate in the Nashville MSA was 2.9% as of November 2024, much below the national average of 4.2%. Strong population growth and job creation ultimately lead to higher demand for residential and commercial real estate. There has been an influx of professionals looking for career opportunities. Such migration leads to more people looking for rental housing. Strong job growth also leads to consumer spending, benefitting retail properties. The median income in Davidson County, where Nashville is located, has doubled from $40,000 in 2005 to over $80,000 in 2023. (Luxe Apartments – One of our portfolio multifamily properties in Nashville, TN) Get More Content Like This Right to Your Inbox 3. High Rental Demand The growing population of Nashville and a strong economy has resulted in an influx of young professionals and their families. Migrants tend to favor renting a home, especially when they are in the process of building their careers. This has resulted in a strong demand for rental housing and pushed up occupancy rates. With higher occupancy rates, rental yields have increased and attracted investors to the residential sub-segment of real estate. Nashville’s thriving music scene has driven tourism as well. Short-term rentals on platforms like Airbnb have also become lucrative investment options for some investors. Such short-term rentals often cater to those coming into the city for events and festivals. Short-term rentals from such audiences tend to do well in specific pockets. Locations where visitors are willing to pay a premium by staying closer to their areas of interest are the ones that do well. For longer-term renters, affordability and connectivity matter. Nashville has specific laws relating to short-term rentals. Factors like occupancy limits, registration of the property and

Commercial vs. Residential Real Estate: Which is Right for Entrepreneurs? Last Updated: December 24, 2o24 Steve Nabity December 24, 2024 Wealth Generation with Skyline Point Greater access to real estate investing. Start Investing Commercial vs. Residential Real Estate: Which is Right for Entrepreneurs? Entrepreneurs can invest in real estate to create a source of cash flow, support an existing business financially, house an existing business, or build an alternate business altogether. Real estate can be a strategic and powerful tool for entrepreneurs to grow their businesses and/or wealth.  Real estate is a broad asset class. It includes commercial and residential real estate. Commercial real estate covers office, retail, industrial, and warehouse. Emerging areas of commercial real estate include data centers and self-storage facilities. Commercial real estate can be more complex to analyze but can also offer high returns. Residential real estate includes single-family and multi-family properties. They are viewed as being more stable than commercial real estate, though market cycles can mean otherwise. So which one is right? Commercial vs residential is the topic of discussion for this article. We will explore: The characteristics of a commercial real estate investment The advantages and challenges of residential real estate How to make the right investment choice based on business as well as personal goals Some key questions to ask yourself before investing in real estate Commercial Real Estate: A Business Opportunity Commercial real estate offers several advantages to investors looking for long-term wealth creation. However, there are challenges along with opportunity. A commercial property with an anchor tenant can mean a stable source of income. A large tenant will most likely be looking to sign a long-term lease. The benefit of such a lease, if executed correctly, is a predictable source of income for years to come. There is no pressure to re-lease or look for a new tenant. Rent escalations built into the lease can offset some if not all of the inflation. As the income generated from a commercial property increases, so does its value. This leads to capital appreciation. A successful sale at a higher price than the acquisition price can lead to substantial profits, sometimes much more than all the rental income earned throughout the hold period. Commercial real estate investing also has its challenges. Handling larger tenants with intricate lease agreements can be an expensive and time-consuming process. The economic cycle and downturns affect commercial real estate more than residential real estate. The upfront costs for executing a commercial real estate deal can also be relatively high. Skyline Point Capital has acquired commercial properties in the past and is well-positioned to guide its investors in future deals. A few years ago, it invested in a Class-A industrial property along with business owners and entrepreneurs. The property is in South Carolina and is still part of our portfolio. Residential Real Estate: A Scalable Entry Point Residential real estate tends to have lower upfront costs than commercial real estate. So, new investors or those with limited capital can also participate in residential deals. The barriers to entry are relatively lower and one does not have to deal with large tenant entities and intricate lease agreements. Residential real estate also tends to be less sensitive to the economic cycle and downturns. People always need a place to live and the demand for housing tends to be more consistent than the demand for commercial real estate. A strategically located property with good-quality tenants tends to provide consistent cash flow to investors. Residential real estate does have its challenges. Firstly, the property owner has to manage tenant relationships and ensure lower turnover. A high vacancy and turnover rate will disrupt the stability of cash flows. Significant time is also required for maintenance and general upkeep of the property. Managing residential real estate tends to be more hands-on than commercial real estate. Skyline Point Capital has invested in several multifamily properties across geographies. It has done so along with entrepreneurs and business owners who have invested with us with different financial goals in mind. Skyline Point Capital has leveraged its expertise and networks to acquire, manage, and sell residential properties. Our most recent investment was the Cortland Med Center in Houston, a 344-unit property in the heart of Houston. Aligning Investments with Business Goals Different business owners will have different expectations from their strategic business investments. If a business requires stability and some shielding from volatility, then the goal of a real estate investment would be to generate stable long-term income. If the goal of a business owner is to house its employees in a safe and well-connected neighborhood or to start the investment journey with small steps, then residential real estate makes sense. A commercial property like a warehouse, office premises, or retail stores in prominent locations can be great for a brand’s visibility. Long-term leases signed by large tenants provide predictable cash flow for years. Residential real estate is flexible in terms of its uses. It can be an affordable place for employees or business owners to live. The residential real estate can later be sold at a capital gain to fund the growth of a business. Business owners and entrepreneurs can leverage real estate ownership and integrate such an investment into their longer-term business strategy. Real estate can be viewed either as an investment or an operational asset. Creating an income stream from real estate can provide cash flow for funding growth initiatives. Using real estate for operations or otherwise can lead to lower expenses. Get More Content Like This Right to Your Inbox Key Questions to Help Entrepreneurs Decide Before investing in real estate, there are some key questions that business owners and entrepreneurs should ask themselves. What is my budget for the investment? In order to identify the right investment opportunity, there needs to be clarity on how much capital is available for investment. You need to ask yourself how much capital you are willing to commit and filter out deals accordingly. How much time can

How Inflation and Interest Rates Affect Commercial Real Estate Investments Last Updated: December 23, 2o24 Steve Nabity December 09, 2024 Wealth Generation with Skyline Point Greater access to real estate investing. Start Investing Introduction “The value of every business, the value of a farm, the value of an apartment, the value of any economic asset is 100% sensitive to interest rates.” This is what Warren Buffet once said about interest rates. Here is what he said about inflation – “Inflation Is Never Gone It’s Always In Remission. It’s Something That Is Human-Made And Governments Can Create.” When investing in commercial real estate, understanding inflation and interest rates is critical for making informed decisions. Interest rates and inflation impact financing costs, property values, and the rental income potential. Interest rates impact cap rates, a valuation metric used in real estate. So, acquisition and strategies are affected by interest rates. As inflation and interest rates change, they create opportunities or risks that commercial real estate investors should be alert to. In this article, we will explore how the economic forces of inflation and interest rates impact real estate, access to capital, and investment opportunities. We will also discuss what you can do to hedge against inflation, how to think about long-term investing in an inflationary environment, and how you can stay proactive about future economic shifts. Understanding Inflation and Its Impact on CRE Inflation and commercial real estate have an interesting relationship. Inflation erodes the purchasing power of the dollar that you hold. It causes prices to rise including those of commercial real estate assets. Rents also go up as lease agreements may have clauses that adjust rent in line with inflation to account for the declining value of money. On the negative side, if there is no rent increase, then it results in lower returns for the landlord. Also, if the price of everything goes up, construction costs and materials become more expensive. This may reduce the margins for developers of commercial real estate. Operational expenses including salaries of maintenance folks and a property manager also go up. Higher expenses may eat into the net operating income margins delivered by a property. So, inflation has positive and negative impacts on commercial real estate. Interest Rates and Financing Costs in CRE Real estate is more often a leveraged asset than not. This means a lot of real estate deals are financed using debt. These loans are either fixed rate or variable/floating rate. Interest rates impact the cost of borrowing. If rates go up, new loans cost more while existing floating rate loans also become dearer. If rates go down, it becomes easier to service the debt. If interest rates rise, then the debt service coverage needed to obtain a loan goes up. Some properties may not have high enough income to provide the necessary coverage which results in fewer borrowers being eligible for loans. If a loan is towards the end of its term, refinancing can also get difficult if the borrowing isn’t conservative. Commercial real estate investors must recognize how interest rate impacts assets and adjust their strategies accordingly. Inflation as a Hedge: CRE as a Safe Investment Inflation is a reality that we all live with. It usually does not disappear and is somewhat of a permanent fixture. To hedge against this economic force, lease agreements have a clause for rent increases. Usually, landlords look to increase rents every year or every few years to keep pace with inflation. This ability to raise the rental income of property makes commercial real estate an interesting prospect for investors during times of sustained high inflation.  Real estate as an inflation hedge is possible. Stocks and bonds may not have the same ability to raise the income/dividends/yield that they provide to investors. In fact, higher costs may squeeze the profit margins of large corporations operating in industries with low pricing power. Therefore, hard assets like commercial real estate may favorably be viewed by investors looking to hedge against inflation. Get More Content Like This Right to Your Inbox Impact of Interest Rate Hikes on Property Values When interest rates rise, they impact the property values as well as the ability of purchasers to fund acquisitions. As mentioned above, real estate is valued based on a metric called capitalization rate or cap rate. If interest rates rise, so do cap rates. The cap rate is calculated by dividing the net operating income by the property value. So, if cap rates go up, it implies that property values have decreased. If you think about it, the way cap rates work is logical. If it becomes more expensive to borrow due to higher interest rates, investors won’t be willing or able to pay as much for a property. They may target a higher rate of return due to higher interest rates. Even if they pay up, servicing the higher-interest debt will eat into margins. So, sellers may end up lowering their asking price to a level that provides comfort to the buyer. Access to Capital and Investment Opportunities Interest rates directly impact the cost of capital. So, if the cost of capital goes up due to rising interest rates, banks tighten their lending standards. This makes it more difficult for investors and developers to fund their acquisitions/projects using debt financing. If access to capital becomes difficult, projects and investments may be delayed or scrapped altogether. Investors may be forced to find opportunities with a higher margin of safety. That may not be possible if the bidding for properties is competitive. Developers may experience their margins getting compressed if the construction cost goes up. Those investors with idle cash will be at an advantage during times of high interest rates and tight credit. They may be able to execute deals that the competition may not. CRE Sectors Most Affected by Inflation and Interest Rates Commercial real estate is highly sensitive to interest rates and inflation. Some sectors within commercial real estate are impacted more than others.

The Future of Sustainable Real Estate: Green Building Practices Driving Investment Growth Last Updated: December 09, 2o24 Steve Nabity December 09, 2024 Wealth Generation with Skyline Point Greater access to real estate investing. Start Investing The Future of Sustainable Real Estate: Green Building Practices Driving Investment Growth Sustainability has been an emerging trend for quite some time. During the last few years, events like the COP as well as various government-driven policies have put sustainable development to the forefront of the global economy. Several entrepreneurs and business owners have leveraged this trend to create emerging industries. Real estate is also evolving as an industry when it comes to sustainability and green building practices. Sustainability isn’t just about reducing emissions and carbon footprints. It also makes business sense as sustainable developments attract eco-conscious buyers and tenants. The use of energy-efficient systems and sustainable materials also optimizes expenses. Sustainability achieves three goals, contribution to a sustainable future, enhancement of the overall appeal of a property, and optimizing costs. In this article, we will explore why sustainability is gaining momentum in the real estate industry. Next, we will touch upon Skyline Point Capital’s approach to sustainable development. We will discuss the financial benefits of green building practices. Lastly, we will look at what the future holds for sustainability in real estate. We will end the article with how you can get started on your real estate investing journey and how Skyline Point Capital can help you in that journey. Why Sustainable Real Estate is Gaining Momentum Real estate developers as well as investors are progressively recognizing that sustainable developments provide relevance, resiliency, and help enhance the quality of life for tenants. By building and investing in sustainable green buildings, assets can maintain and enhance their values over longer periods of time. They also appeal to prospective renters, make financial sense, and help the country meet its sustainability goals. With the United Nations driving Sustainable Development Goals and countries also making commitments on the climate front, several policies and regulatory frameworks have been constructed worldwide to reduce carbon footprints and optimize energy consumption. This trend is not just an American one, but a global one. The shift is inevitable and investors need to look at sustainable eco-friendly properties to mitigate potential risks from a compliance viewpoint. Sustainable properties might even become a point of differentiation in the competitive and constantly-evolving world of real estate. In specific cases, it can have enhanced marketability and economics. Investors may view sustainable real estate as an opportunity to align financial growth with social responsibility. By financial growth we mean a potentially higher yield earned by reducing operating expenses. Reduced water and energy usage, reduced maintenance costs, and operational efficiencies can result in a higher net operating income of the property. A higher yield can also come from higher rents and lower vacancy levels by positioning the property favorably among renters who value a green building and are willing to pay a premium for the benefits it offers. The ultimate conclusion is that a shift towards sustainable real estate signifies a recognition that environmental responsibility and long-term profitability are not mutually exclusive and they can both go hand-in-hand. Skyline Point Capital’s Approach to Sustainable Real Estate Development Once Skyline Point Capital takes over the management of a property, it works towards incorporating some of the elements of sustainable real estate. We don’t just do it for the sake of sustainability, but we do it because it also makes economic sense. Following certain green building guidelines allows us to create short-term as well as long-term value. For example, we invested in a 90-unit property called Keystone Farms in Nashville. After taking over the property, we implemented a water-saving program to reduce the amount of water being used across the property. We also installed LED lighting throughout the property. Such measures not only helped conserve a valuable natural resource like water, but also helped lower utility bills. In the long-term, it created value for us and our residents. In another case, also in Nashville, we invested in a 94-unit property called Luxe Apartments. We liked the fact that this property already had low-flow toilets in all of the units. So, the water conservation part was addressed to some extent. We went ahead and installed EV chargers at the property to encourage the use of electric vehicles and support residents who wished to drive EVs. At Luxe, we installed LED lighting to help conserve electricity and lower utility bills. For our future investments, we are always looking to incorporate low-flow toilets, LED lighting, remote-controlled thermostats, and Energy Star appliances. The Financial Benefits of Green Building Practices We have mentioned a few times how green building practices lead to operational efficiencies and higher yields. Let us look at specific examples and strategies as to how the financial benefits of green building practices get created. Energy consumption is a significant part of climate discussions. Besides the actual usage, the source from which the energy is produced is of tremendous importance. Green building developments use solar panels to generate electricity from solar energy. They also extensively use LED lighting, smart appliances, and high-efficiency HVAC systems to reduce the consumption of energy. Water consumption is also a key aspect of green building practices. Faucets that minimize water wastage and other design aspects that reduce water usage and involve using recycled water can also help lower utility bills. Getting a building certified by LEED or BREEAM gives a sustainable development the credibility that it needs to position itself as a green development. Such certifications help enhance the value of the asset and can also become a marketing point when interacting with prospective renters. The certifications and the operational cost benefits can persuade renters to even pay a premium on market rents, thereby enhancing the top line for the property. Over the long term, the benefits on the cost and revenue sides can compound. Additionally, investors may also view a green development favorably from a risk viewpoint.

The Power of Commercial Real Estate for Small Business Growth Last Updated: December 09, 2o24 Steve Nabity December 09, 2024 Wealth Generation with Skyline Point Greater access to real estate investing. Start Investing The Power of Commercial Real Estate for Small Business Growth The life of a small business owner is fast-paced. The focus is on operations, customer acquisition, product development, finance, marketing, and anything else that needs to be tackled. A small business owner tends to wear many hats trying to run and grow the business. In such a scenario, wouldn’t it be helpful if there was a stable stream of cash flow coming in from another asset outside the business? Working capital flows and cash conversion cycles vary a lot in a business, but a steady income stream can help even things out a bit. Commercial real estate is one asset class that has the potential to provide steady cash flows. If investing in commercial real estate sounds daunting to you, or if you are wondering why invest in real estate, then this article is for you. We will discuss how Skyline Point Capital works with small business owners and entrepreneurs to invest in real estate assets. Stability in an Uncertain Market Running a small business is tough. There are plenty of uncertainties and moving parts that constantly impact the business and its finances. Collecting receivables from large customers, paying suppliers, managing regulatory changes, and handling the working capital cycle can be tricky. If any of these get stretched and elongate the cash conversion cycle, it can push the business owner into a tight spot. Then, there are also black swan events like a pandemic or a major financial crisis that can hugely impact demand. Customer acquisition is always an ongoing endeavor that constantly requires time and resources. Knowing when to make capital investments by understanding the overall business cycle is also a skill business owners hone over years of experience. Amidst all these uncertainties and challenges, some predictability and stability on the financial side of things can be a great leveler. It can give business owners some comfort and allow them to focus on things that matter the most to a business: long-term strategic planning, expansion, and growth. It allows the business owner to free up some mind space from the day-to-day pressures and dedicate that freed-up space to instead think about the longer-term direction of the business. An investment in commercial real estate can provide consistent and predictable cash flows. If good quality tenants with long-term leases are in place, then a steady income stream can be expected. Such cash flows can help maintain operational stability, especially during market uncertainty. ( source: https://russellinvestments.com/au/blog/private-markets-total-portfolio-strategies ) Passive Income Opportunities There is a completely different way that business owners can think about real estate investments. By investing in a commercial property which can then be leased out to a business, an investor can create a business with an income stream without actually getting into the day-to-day operational demands of running it. Business owners can appoint a professional property manager to handle the day-to-day operations. Skyline Point Capital works with entrepreneurs and business owners where it acts as the sponsor and manages the property while investors participate passively and earn regular cash flow. A passive income stream can either be personal income from a real estate investment business or a source to fund the growth of another business an investor may own. It can also be used to pursue completely new ideas. Whatever the end use of the income, it certainly helps ease any financial pressures. It allows a business owner to move away from constant cashflow management and focus more effectively on his/her business, or to fund a new venture. If time is money, then a passive investment in commercial real estate creates more time for a business owner. Scalability Potential Scalability is an important aspect of any growing business. Successful entrepreneurs tend to pursue scalable business ideas. The cost of scaling up a business is also of great importance. Expanding an office, hiring more employees, setting up plants and machinery, etc. all cost money. The day-to-day running of a business also requires working capital. So, to fund growth, there needs to be cash flow. This capital can come from the existing business that earns a rate of return superior to the cost of capital. Alternatively, growth capital has to come from outside the business. Seeking capital from outside involves either giving up equity or taking on debt. But, if a business owner has an additional income stream from a real estate investment, then there may be a possibility of funding business growth from such cashflows. If the business owner views the real estate investment as a business and wants to scale up the investment business, then cashflows from his/her traditional business can be used to purchase properties in newer geographies or in newer subsegments to diversify. For example, if an investor has a multifamily investment in Nebraska, he/she can diversify by buying properties in Iowa, Texas, or elsewhere. Alternatively, the business owner can invest in a retail or industrial property. Such diversification acts as a hedge and mitigates the risk of owning a property in a particular city or a particular segment (e.g. residential). Get More Content Like This Right to Your Inbox Tax Benefits for Investors We have discussed the stability and predictability of income generated from real estate. But, commercial real estate also offers some important tax benefits for investors. Skyline Point Capital has worked with its investors to take advantage of them. Depreciation is an accounting expense that can help lower the taxable income. A commercial property (the structure and not the land) can be depreciated over 39 years. So, the value of the building divided by 39 is the amount of depreciation that can be claimed when filing the tax return. If applicable, a real estate investment may also be eligible for accelerated depreciation. In such a case, a higher depreciation can be