Mr. Evan Kirsh reports

STARLIGHT U.S. MULTI-FAMILY CORE FUND AND STARLIGHT U.S. MULTI-FAMILY (NO. 3) CORE FUND TO ACQUIRE APARTMENT COMPLEX IN RAPIDLY GROWING CHARLOTTE, NORTH CAROLINA SUBMARKET

Starlight U.S. Multi-Family Core Fund (fund No. 1) and Starlight U.S. Multi-Family (No. 3) Core Fund (fund No. 3) have entered into an agreement to acquire Belle Haven Apartments, a certified-LEED-silver (Leadership in Energy and Environmental Design), 176-unit, garden-style, Class A apartment complex, completed in 2014 and located in a rapidly growing area in northeast Charlotte, N.C., at 9005 Post Canyon Lane. LEED silver certifies that the property is environmentally efficient, and provides its residents with the benefit of reduced energy and water costs, as well as a lower carbon and pollution footprint.

In connection with the acquisition of Belle Haven Apartments, fund No. 1 has agreed to acquire an indirect 66-2/3-per-cent interest, and fund No. 3 has agreed to acquire an indirect 33-1/3-per-cent interest. All decision making in respect of Belle Haven Apartments, including day-to-day and material decisions, will be jointly made by fund No. 1 and fund No. 3 through established governance practices.

Pursuant to a purchase and sale agreement effective Jan. 16, 2015, as amended from time to time, Belle Haven Acquisition LLC, an indirect, wholly owned subsidiary of fund No. 1 and fund No. 3, has agreed to purchase Belle Haven Apartments unencumbered for the purchase price of approximately $26.4-million (U.S.). The purchase agreement contains customary representations and warranties for a transaction of this nature. Subject to the satisfaction or waiver of conditions precedent, the purchase of Belle Haven Apartments is scheduled to close on or about Feb. 17, 2015.

In connection with the acquisition of Belle Haven Apartments, new financing in the amount of approximately $22.9-million (U.S.) has been secured for a three-year term with two one-year extensions available. Subject to certain conditions, financing will be interest only and will be payable at a blended rate of approximately 3.68 per cent. Fund No. 1 and fund No. 3 have each assumed responsibility for the liabilities of Belle Haven Apartments on a pro rata ownership basis.

Belle Haven Apartments

Belle Haven Apartments consists of seven, three-storey walk-up buildings on a 12.89-acre site comprising one-, two- and three-bedroom units. Each apartment unit at Belle Haven Apartments contains modern features, including Energy Star stainless-steel appliances, designer dark-espresso kitchen cabinetry, granite countertops, upgraded track lighting, and private patios or balconies. Amenities at Belle Haven Apartments include a central clubhouse containing a state-of-the-art fitness centre with yoga studio, a sports and entertainment lounge, a games room, and a business centre. Exterior features include a swimming pool with water trellis, barbeque grills, a dog park with a pet washing station, and a car care centre. As of Jan. 12, 2015, Belle Haven Apartments' occupancy was 94.3 per cent.

Following completion of the acquisition, the funds expect to retain Greystar Real Estate Partners, the largest third party, multifamily property manager in the United States, as the property manager at Belle Haven Apartments. Greystar is currently managing five communities for fund No. 1 and fund No. 3.

Fund No. 1 and fund No. 3 portfolio

Following completion of the acquisition of Belle Haven Apartments, fund No. 1 expects to have interests in, and operate, a portfolio comprising 2,180 recently constructed, Class A, stabilized, income-producing, multifamily real estate units located in Dallas and Houston, Tex., and Charlotte, N.C.

Following completion of the acquisition of Belle Haven Apartments, fund No. 3 expects to have interests in, and operate, a portfolio comprising 1,493 recently constructed, Class A, stabilized, income-producing, multifamily real estate units located in Dallas, Austin and Houston, Tex., and Charlotte, N.C.

We seek Safe Harbor.