Important Disclosure Statement for Catalyst:
An investment in the units of Catalyst is speculative and risky. No assurance can be given that investors will realize their investment objectives or will realize a substantial return (if any) on their investment. Investors should be able to bear the complete loss of their investment in Catalyst. For this reason, each prospective subscriber for Catalyst should carefully read Catalyst’s Private Placement Memorandum (“Memorandum”) and all Exhibits to the Memorandum. Each prospective subscriber should consult with his attorneys, accountants, and business advisors prior to making an investment in Catalyst. Only qualified, eligible investors may invest in Catalyst.
Catalyst will invest in multifamily, residential real estate, which includes apartment and student housing. As such, investment in the Units does not constitute a diversified investment. Catalyst intends to diversify its investments by investing in multiple multifamily residential properties throughout the United States. Catalyst intends to hold approximately 20 properties with no single investment representing more than 20% of Catalyst's total invested capital. Anticipated portfolio characteristics may differ from actual portfolio holdings. An inability to raise substantial funds in this Offering could also result in substantial limitations on Catalyst’s ability to achieve a diversified portfolio of assets.
Because this is a blind pool offering, investors will not have the opportunity to evaluate investments before Catalyst makes them, which makes an investment in Catalyst more speculative. The investors must rely on the management of Catalyst and to make all investment decisions. There can be no assurances or guarantees that Catalyst’s investment objectives will be realized or Catalyst’s investment strategy will prove successful.
An investment in Catalyst may be affected by a number of factors beyond the control of the management of Catalyst that will affect the value of Catalyst’s investments. These include risks typically associated with investments in residential real estate that produce income such as increased vacancy rates, re-letting risk, or decreased rental rates, adverse changes in general economic conditions or local conditions that may reduce the demand for multifamily residential properties, changes in the demand for or supply of competing properties in an area, unanticipated holding costs, the availability and cost of necessary utilities and services, changes in real estate tax rates and other operating expenses, changes in governmental rules and fiscal policies, changes in zoning and other land use regulations, environmental risks such as mold contamination or environmental claims that could be made against Catalyst, and natural disasters, most of which are not covered by insurance.
Catalyst will operate in a highly competitive market for investment opportunities. Catalyst's profitability depends, in large part, on the ability to acquire profitable investments. In doing so, Catalyst will compete with numerous other entities and individuals engaged in real estate investment activities, many of which have greater financial, technical, marketing, and other resources than Catalyst. Poor performance of the investment management in selecting investments for Catalyst, or poor performance of any investment, could adversely affect the profitability
of Catalyst and the overall return to the investors.
Catalyst may make investments through a joint venture or co-investment arrangement. Such arrangements may be on terms that limit Catalyst’s ability to control the investments and to receive returns on those investments.
Adverse economic conditions may adversely affect the ability of Catalyst to obtain financing. Unfavorable financing terms or the inability to obtain financing would adversely affect the operating results of Catalyst. The high level of leverage on the properties increases the debt service risks and the likelihood of foreclosure. Catalyst's borrowing of capital increases the risks of adverse effects on Catalyst's financial condition.
The investment manager of Catalyst has a limited operating history and track record upon which prospective investors may base an evaluation of its likely performance. Prospective investors should not rely on the past success of the investment manager's affiliates. The success of Catalyst is significantly dependent upon the expertise of certain investment or support personnel and any future unavailability of their services could have an adverse impact on the Catalyst’s performance. The General Partner and a majority of Limited Partners may agree to amend the Catalyst Agreement, which could be adverse to some limited partners. It is impossible to predict accurately the results from an investment in the Catalyst because of general risks associated with the complete reliance on the General Partner and its affiliates to identify and negotiate the investments to be acquired by Catalyst.
The proposed method of operation of Catalyst creates certain inherent conflicts of interest among the Catalyst, Catalyst, the General Partner and their affiliates. The liability of the investment manager is limited. Catalyst and its affiliates may compete with Catalyst's investments and may provide services to the Catalyst or Property Owners. Catalyst may make direct investments in affiliates of the investment manager. The investment manager may have conflicting fiduciary obligations with respect to the allocation of investment opportunities. The investment manager and its affiliates will receive compensation and reimbursements. Certain compensation to the investment manager and its affiliates has not been established by arms-length agreement. Catalyst's and the investment manager's officers and agents will engage in other management activities. A single legal counsel will represent Catalyst, the investment manager, Catalyst and their affiliates.
The investment manager may have conflicting fiduciary obligations when making investments through a joint venture or co-investment with an affiliate of the investment manager. These transactions may not be the result of arm's-length negotiations and may involve conflicts between the Catalyst's interests and the interests of the investment manager and its affiliates. The investment manager will use reasonable efforts to ensure that the terms and conditions of such transactions will be no more favorable to the affiliate than could be obtained by arms-length negotiations with an independent third party.
An investment in Catalyst is illiquid. No public or other market will develop for the Units. These securities are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under the Securities Act of 1933, as amended and the applicable State securities laws, pursuant to registration or exemption there from. Prospective investors should be aware that they will be required to bear the financial risks of any investment in these securities for an indefinite period of time.
Units of Catalyst are offered without registration under any securities laws due to a reliance on an available exemption. Although, Catalyst’s offering documents are not reviewed or approved by federal or state regulators, Catalyst must comply with a variety of legal and compliance requirements. Failure to comply with the requirements for a private offering exemption would adversely affect Catalyst. Maintenance of an Investment Company Act exemption may impose limits on Catalyst's operations, and if Catalyst becomes subject to the Act, Catalyst would likely be unable to continue its business.
To the extent Fund cash flow permits, the investment manager intends to make monthly distributions to the Limited Partners, however, the investment manager may reinvest all or a portion of proceeds received from CityVest on or before December 31 2020, rather than using such proceeds to make distributions to the Limited Partners. Prospective investors should be aware that the sole source of cash from which Catalyst will make cash distributions on the Units will be from revenues received from investments made by Catalyst. No assurance can be made that Catalyst will receive sufficient return on its investments to enable it to make any distributions to the Limited Partners.
Certain statements included in this presentation constitute "forward-looking statements" and are subject to a number of significant risks and uncertainties. Any such forward-looking statements contained herein should not be relied upon as predictions of future events. Certain such forward-looking statements can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "will," "could" "would likely," "should," "seeks," "approximately," "intends," "plans," "estimates," "anticipates," "continue" or the negative thereof or other variations thereof or comparable terminology, or by discussions of strategy, plans or intentions. Such forward-looking statements are subject to numerous risks and are necessarily dependent on assumptions, data or methods that may be incorrect or imprecise and may not be realized. In that regard, actual results may differ materially from those in forward-looking statements. As a result of the foregoing, no assurances can be or are given as to future results of operations or financial condition of Catalyst.
Catalyst’s investment approach has complex tax implications for investors. These ramifications should be reviewed carefully and applied to each investor’s individual circumstances. Catalyst may involve structures or strategies that may cause delays in important tax information being sent to investors. You should obtain investment and tax advice from your advisers before deciding to invest.
This material includes certain statements, estimates and projections of Catalyst with respect to the anticipated future performance of Catalyst. Such statements, estimates and projections reflect various assumptions of the investment manager that may or may not prove to be correct, and no assurance can be made that Catalyst can or will attain such results. Nothing contained herein is or should be relied on as a promise or representations as to the future performance of Catalyst.
These materials (the “Presentation”) have been provided for informational purposes only and neither constitutes the Memorandum of Catalyst nor provide a comprehensive disclosure of both the terms of investment and risk disclosures associated with an investment in Catalyst. This Presentation is not a complete summary of the terms of Catalyst or the background information of persons associated with the Investment Manager and is qualified in its entirety by, and must be read in conjunction with, the more detailed information included in the Memorandum, the governing documents of Catalyst, the Subscription Agreement of Catalyst and other related documentation.
This Presentation, furnished on a confidential basis to the recipient, is neither an offer to sell nor a solicitation of any offer to buy any securities, investment products or investment advisory services, including units of Catalyst. This presentation is not an advertisement and is not intended for public use or distribution and is intended exclusively for the use of the person to whom it has been delivered. An Offer may be made only by means of the Memorandum. This sales literature must be accompanied or preceded by that memorandum and read in conjunction therewith to fully understand the implications and risks of the securities to which it relates.