kw-20231231

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No.1

Form 10-K/A

(Mark One)


☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-33824

Kennedy-Wilson Holdings, Inc.

(Exact Name of Registrant as Specified in Its Charter)


Delaware						26-0508760
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

151 S El Camino Drive

Beverly Hills, CA 90212

(Address of principal executive offices)

(310) 887-6400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

______________________________________________________________________


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on which Registered
Common Stock, $.0001 par value	KW	NYSE

Securities registered pursuant to Section 12(g) of the Act: None

______________________________________________________________________

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

Based on the last sale at the close of business on June 30, 2023, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $1,716,285,368.

The number of shares of common stock outstanding as of February 21, 2024 was 138,977,698.

DOCUMENTS INCORPORATED BY REFERENCE

Part III of this report incorporates certain information by reference from the registrant’s definitive proxy statement for the annual meeting of stockholders to be held on or around June 6, 2024, which proxy statement will be filed no later than 120 days after the close of the registrant’s fiscal year ended December 31, 2023.

EXPLANATORY NOTE

Kennedy-Wilson Holdings, Inc., a Delaware corporation (the “Company”), is filing this Amendment No. 1 (this “Amendment”) to its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was originally filed with the Securities and Exchange Commission (the “SEC”) on February 22, 2024 (the “Original Report”), to amend Item 15 of the Original Report and include separate financial statements of KW-G Multifamily Venture 1, LLC and Vintage Housing Holdings, LLC as required pursuant to Rule 3-09 of Regulation S-X under the Securities Exchange Act of 1934.

Other than as set forth herein, this Amendment does not affect any other parts of, or exhibits to, the Original Report, and those unaffected parts or exhibits are not included in this Amendment. This Amendment continues to speak as of the date of the Original Report, and the Company has not updated the disclosure contained in this Amendment or the Original Report to reflect events that have occurred since the filing of the Original Report. Accordingly, this Amendment should be read in conjunction with the Company's other filings with the SEC since the filing of the Original Report.

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PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) The following documents are filed as part of this annual report:

(1) Financial Statements. The consolidated financial statements of the Company, as listed in Item 8 of the Original Report, are included in Item 8 of the Original Report

(2) Financial Statement Schedules. The financial statement schedules of the Company, as listed in Item 8 of the Original Report, are included in Item 8 of the Original Report.

(3) Exhibits. See the Exhibit List beginning of page 5 of this Amendment.

(b) Exhibits. The exhibits listed on the Exhibit Index set forth below on page 6 are filed as part of, or are incorporated by reference into, this annual report on Form 10-K.

(c) Financial Statements Required by Rule 3-09 of Regulation S-X. The financial statements required by Rule 3-09 of Regulation S-X under the Securities Exchange Act of 1934, as amended, are filed as schedules to this report and are incorporated by reference into this Item 15.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 29th day of March 2024.

KENNEDY -WILSON HOLDINGS, INC.,

a Delaware corporation

By:

/s/ WILLIAM J. MCMORROW

William J. McMorrow

Chief Executive Officer

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EXHIBIT INDEX


Exhibit No.	Description	Location
3.1	Amended and Restated Certificate of Incorporation.	Filed as Exhibit 3.1 to Registrant’s Current Report on Form 8-K (File No.: 001-33824) filed June 19, 2014.
3.2	Third Amended and Restated Bylaws.	Filed as Exhibit 3.1 to Registrant’s Current Report on Form 8-K (001-33824) filed February 21, 2023.
3.3	Certificate of Designations Establishing the 5.75% Series A Cumulative Perpetual Convertible Preferred Stock.	Filed as Exhibit 3.3 to Registrant's Registration Statement on Form S-3 (File No. 333-235472) filed December 12, 2019
3.4	Certificate of Designations Establishing the 4.75% Series B Cumulative Perpetual Preferred Stock.	Filed as Exhibit 4.1 of Registrant's Current Report on Form 8-K (File No. 001-33824) filed February 23, 2022
3.5	Certificate of Designations Establishing the 6.00% Series C Cumulative Perpetual Preferred Stock.	Filed as Exhibit 3.1 of Registrant’s Current Report on Form 8-K (File No. 001-33824) filed June 16, 2023
4.1	Specimen Common Stock Certificate.	Filed as an Exhibit to the Registrant's Registration Statement on Amendment no. 1 to Form 8-A (File No.: 333-145110) filed on November 16, 2009 and incorporated by reference herein.
4.2	Base Indenture, dated as of March 25, 2014, between Kennedy-Wilson, Inc. and Wilmington Trust, National Association, as trustee.	Filed as Exhibit 4.1 to Registrant’s Quarterly Report on Form 10-Q (001-33824) filed May 12, 2014
4.3	Supplemental Indenture No. 1, dated as of March 25, 2014, among Kennedy-Wilson Holdings, Inc., the guarantors named therein and Wilmington Trust, National Association, as trustee.	Filed as Exhibit 4.2 to Registrant’s Current Report on Form 8-K (001-33824) filed March 26, 2014.
4.4	Supplemental Indenture No. 2029-1 dated as of February 11, 2021, among Kennedy-Wilson Holdings, Inc., the subsidiary guarantors named therein and Wilmington Trust, National Association, as trustee.	Filed as Exhibit 4.2 to Registrant's Current Report on Form 8-K (001-33824) filed February 11, 2021
4.5	Supplemental Indenture No. 2031-1, dated as of February 11, 2021 among Kennedy-Wilson Holdings, Inc., the subsidiary guarantors named therein and Wilmington Trust, National Association, as trustee.	Filed as Exhibit 4.3 to Registrant's Current Report on Form 8-K (001-33824) filed February 11, 2021
4.6	Supplemental Indenture No. 2029-2, dated as of August 4, 2021 among Kennedy-Wilson, Inc., Kennedy-Wilson Holdings, Inc., the related entity names there in, the subsidiary guarantors named therein and Wilmington Trust, National Association, as trustee.	Filed as Exhibit 4.1 to Registrant’s Quarterly Report on Form 10-Q (001-33824) filed November 4, 2021.
4.7	Supplemental Indenture No. 2031-2, dated as of August 4, 2021 among Kennedy-Wilson, Inc., Kennedy-Wilson Holdings, Inc., the subsidiary guarantor named therein and Wilmington Trust, National Association, as trustee.	Filed as Exhibit 4.2 to Registrant’s Quarterly Report on Form 10-Q (001-33824) filed November 4, 2021.
4.8	Supplemental Indenture No. 2030-1, dated as of August 23, 2021 among Kennedy-Wilson, Inc., Kennedy-Wilson Holdings, Inc., the related entity names there in, the subsidiary guarantors named therein and Wilmington Trust, National Association, as trustee.	Filed as Exhibit 4.2 to Registrant’s Current Report on Form 8-K (001-33824) filed August 23, 2021.
4.9	Supplemental Indenture No. 2029-3, dated as of May 12, 2022, among Kennedy-Wilson, Inc., Kennedy-Wilson Holdings, Inc., the subsidiary guarantors named therein and Wilmington Trust, National Association, as trustee.	Filed as Exhibit 4.1 to Registrant’s Quarterly Report on Form 10-Q (File No. 001-33824) filed August 5, 2022.
4.10	Supplemental Indenture No. 2031-3, dated as of May 12, 2022, among Kennedy-Wilson, Inc., Kennedy-Wilson Holdings, Inc., the subsidiary guarantors named therein and Wilmington Trust, National Association, as trustee.	Filed as Exhibit 4.2 to Registrant’s Quarterly Report on Form 10-Q (File No. 001-33824) filed August 5, 2022.

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4.11	Supplemental Indenture No. 2030-2, dated as of May 12, 2022 among Kennedy-Wilson, Inc., Kennedy-Wilson Holdings, Inc., the subsidiary guarantors named therein and Wilmington Trust, National Association, as trustee.	Filed as Exhibit 4.3 to Registrant’s Quarterly Report on Form 10-Q (File No. 001-33824) filed August 5, 2022.
4.12	Supplemental Indenture No. 2029-4, dated as of December 14, 2023, among Kennedy-Wilson, Inc., Kennedy-Wilson Holdings, Inc., the subsidiary guarantors named therein and Wilmington Trust, National Association, as trustee.	Filed with Original Report
4.13	Supplemental Indenture No. 2031-4, dated as of December 14, 2023, among Kennedy-Wilson, Inc., Kennedy-Wilson Holdings, Inc., the subsidiary guarantors named therein and Wilmington Trust, National Association, as trustee.	Filed with Original Report
4.14	Supplemental Indenture No. 2030-3, dated as of December 14, 2023, among Kennedy-Wilson, Inc., Kennedy-Wilson Holdings, Inc., the subsidiary guarantors named therein and Wilmington Trust, National Association, as trustee.	Filed with Original Report
4.15	Registration Rights Agreement, dated November 7, 2019, between the registrant and the purchasers named therein.	Filed as Exhibit 4.2 to Registrants Registration Statement on Form S-3 (File No. 333-235472) filed December 12, 2019.
4.16	Warrant Agreement, dated March 8, 2022, between Kennedy-Wilson Holdings, Inc. and the purchasers named therein.	Filed as Exhibit 4.1 to Registrant’s Quarterly Report on Form 10-Q (File No. 001-33824) filed May 5, 2022.
4.17	Registration Rights Agreement, dated March 8, 2022, between Kennedy-Wilson Holdings, Inc. and the purchasers named therein.	Filed as Exhibit 4.2 to Registrant’s Quarterly Report on Form 10-Q (File No. 001-33824) filed May 5, 2022.
4.18	Warrant Agreement, dated June 16, 2023, between Kennedy-Wilson Holdings, Inc. and the purchasers named therein.	Filed as Exhibit 4.2 to Registrant’s Quarterly Report on Form 10-Q (File No. 001-33824) filed August 4, 2023
4.19	Registration Rights Agreement, dated June 16, 2023, between Kennedy-Wilson Holdings, Inc. and the purchasers named therein.	Filed as Exhibit 4.1 to Registrant’s Quarterly Report on Form 10-Q (File No. 001-33824) filed August 4, 2023
4.20	Description of Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934	Filed with Original Report
10.1†	Employment Agreement dated September 29, 2023 between Kennedy-Wilson and William J. McMorrow.	Filed as Exhibit 10.1 to Registrant's Current Report on Form 8-K (File No. 001-33824) filed September 29, 2023
10.2†	Kennedy-Wilson Holdings, Inc. Amended and Restated 2009 Equity Participation Plan.	Filed as Exhibit to the Registrant's Current Report on Form 8-K (File No.: 001-33824) filed January 30, 2012.
10.3†	First Amendment to Amended and Restated 2009 Equity Participation Plan.	Filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K (001-33824) filed June 19, 2014.
10.5†	Second Amended and Restated 2009 Equity Participation Plan.	Filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K (001-33824) filed June 16, 2017.
10.6†	Second Amendment to the Second Amended and Restated 2009 Equity Participation Plan.	Filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K (File No. 001-33824) filed June 10, 2022.
10.7†	Form of Kennedy-Wilson Holdings, Inc. Amended and Restated 2009 Equity Participation Plan Consultant Restricted Stock Award Agreement	Filed as Exhibit 10.116 to Registrant’s Annual Report on Form 10-K filed March 12, 2013.
10.8†	Form of Kennedy-Wilson Holdings, Inc. Amended and Restated 2009 Equity Participation Plan Director Restricted Stock Award Agreement	Filed as Exhibit 10.30 to Registrant's Annual Report on Form 10-K (001-33824) filed February 27, 2018
10.9†	Employment Agreement dated September 29, 2023 between Kennedy-Wilson, Inc. and Kent Mouton	Filed as Exhibit 10.4 to Registrant’s Current Report on Form 8-K (001-33824) filed September 29, 2023.
10.10†	Employment Agreement dated September 29, 2023 between Kennedy-Wilson, Inc. and Matt Windisch	Filed as Exhibit 10.3 to Registrant’s Current Report on Form 8-K (001-33824) filed September 29, 2023.

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10.11†	Employment Agreement dated September 29, 2023 between Kennedy-Wilson, Inc. and Justin Enbody	Filed as Exhibit 10.2 to Registrant’s Current Report on Form 8-K (001-33824) filed September 29, 2023
10.12†	Form of Total Shareholder Return Performance-Based Employee Restricted Stock Award Agreement.	Filed as Exhibit 10.1 to Registrant's Current Report on Form 8-K (001-33824) filed January 24, 2019
10.13†	Form of Return on Equity Performance-Based Employee Restricted Stock Award Agreement.	Filed as Exhibit 10.2 to Registrant's Current Report on Form 8-K (001-33824) filed January 24, 2019
10.14†	Form of Time-Based Employee Restricted Stock Award Agreement	Filed as Exhibit 10.3 to Registrant's Current Report on Form 8-K (001-33824) filed January 24, 2019
10.15	Securities Purchase Agreement, dated October 17, 2019 between Kennedy-Wilson Holdings, Inc. and the purchasers named therein.	Filed as Exhibit 10.1 to Registrants Current Report on Form 8-K (File No 001-33824) filed October 18, 2019.
10.16††	4.75% Series B Cumulative Perpetual Preferred Stock and Warrant Purchase Agreement, dated February 23, 2022, between Kennedy-Wilson Holdings, Inc. and the purchasers named therein.	Filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K (File No 001-33824) filed February 23, 2022
10.17	Amendment No. 1 to the 4.75% Series B Cumulative Perpetual Preferred Stock and Warrant Purchase Agreement, dated December 6, 2023, between Kennedy-Wilson Holdings, Inc. and the purchasers named therein	Filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K (File No 001-33824) filed December 6, 2023
10.18	6.00% Series C Cumulative Perpetual Preferred Stock and Warrant Purchase Agreement, dated June 4, 2023, between Kennedy-Wilson Holdings, Inc. and the purchasers named therein.	Filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K (File No 001-33824) filed June 5, 2023
10.19	Amendment No. 1 to the 6.00% Series C Cumulative Perpetual Preferred Stock and Warrant Purchase Agreement, dated June 16, 2023, by and among the Kennedy-Wilson Holdings, Inc. and the purchasers named therein.	Filed as Exhibit 10.2 to Registrant’s Quarterly Report on Form 10-Q (File No 001-33824) filed August 4, 2023
10.20	Amendment No. 2 to the 6.00% Series C Cumulative Perpetual Preferred Stock and Warrant Purchase Agreement, dated December 6, 2023, between Kennedy-Wilson Holdings, Inc. and the purchasers named therein	Filed as Exhibit 10.2 to Registrant’s Current Report on Form 8-K (File No 001-33824) filed December 6, 2023
10.21	Second Amended and Restated Credit Agreement, dated March 25, 2020, among Kennedy-Wilson, Inc., as borrower, Kennedy-Wilson Holdings, Inc. and certain subsidiaries of Kennedy-Wilson Holdings, Inc. from time to time party thereto as guarantors, the lenders from time to time party thereto, Bank of America, N.A., administrative agent and Bank of America, N.A. and JP Morgan Chase Bank, N.A., as letter of credit issuers.	Filed as Exhibit 10.1 to Registrant's Current Report on Form 8-K (001-33824) filed March 26, 2020.
10.22	Joinder Agreement, dated as of January 19, 2021 among Kennedy-Wilson, Inc., the subsidiary guarantors named therein and Bank of America, N.A., as administrative agent	Filed as Exhibit 10.56 to Registrant's Annual Report on Form 10-K (001-33824) filed February 26, 2021.
10.23	Joinder Agreement, dated as of August 4, 2021, among Kennedy-Wilson, Inc., the subsidiary guarantors named therein and Bank of America, N.A.	Filed as Exhibit 10.1 to Registrant's Quarterly Report on Form 10-Q (001-33824) filed November 4, 2021.
10.24	First Amendment to the Second Amended and Restated Credit Agreement, dated as of October 12, 2021, among Kennedy-Wilson Holdings, Inc., Kennedy-Wilson, Inc., the subsidiaries party thereto and Bank of America, N.A., as administrative agent	Filed as Exhibit 10.55 to Registrant's Annual Report on Form 10-K (001-33824) filed February 22, 2023
10.25	Joinder Agreement, dated as of May 12, 2022, among Kennedy-Wilson, Inc., the subsidiary guarantors named therein and Bank of America, N.A., as administrative agent	Filed as Exhibit 10.1 to Registrants Quarterly Report on Form 10-Q (File No. 001-33824) filed August 5, 2022.
10.26	Second Amendment to the Second Amended and Restated Credit Agreement, dated as of June 12, 2023, among Kennedy-Wilson Holdings, Inc., Kennedy-Wilson, Inc., the subsidiaries party thereto and Bank of America, N.A., as administrative agent	Filed as Exhibit 10.3 to Registrants Quarterly Report on Form 10-Q (File No. 001-33824) filed August 4, 2023
10.27	Joinder Agreement, dated as of December 14, 2023, among Kennedy-Wilson, Inc., the subsidiary guarantors named therein and Bank of America, N.A., as administrative agent	Filed with Original Report

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10.28	Distribution Agreement, dated as of May 6, 2022, by and among Kennedy-Wilson Holdings, Inc., and J.P. Morgan Securities LLC, BofA Securities, Inc., Deutsche Bank Securities Inc. and Evercore Group L.L.C., as agents and/or principals and (except in the case of Evercore Group L.L.C.) forward sellers, and JPMorgan Chase Bank, National Association, Bank of America, N.A. and Deutsche Bank AG, London Branch, as forward purchasers.	Filed as Exhibit 1.1 to the Registrant’s Current Report on Form 8-K (File No. 001-33824) filed May 6, 2022.
10.29	Letter Agreement, dated August 3, 2022, by and among Kennedy-Wilson Holdings, Inc., Quinton Heights, LLC and Security Benefit Life Insurance Company.	Filed as Exhibit 10.4 to Registrants Quarterly Report on Form 10-Q (File No. 001-33824) filed August 5, 2022.
21	List of Subsidiaries	Filed with Original Report
23.1	Consent of Independent Registered Public Accounting Firm	Filed with Original Report
23.2	Consent of Independent Registered Public Accounting Firm	Filed herewith.
23.3	Consent of Independent Registered Public Accounting Firm	Filed herewith.
24.1	Power of Attorney (included on signature page).	Filed with Original Report
31.1	Certification Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 of the Principal Executive Officer.	Filed herewith.
31.2	Certification Pursuant to Rule 13a-14(a) under Securities Exchange Act of 1934 of the Principal Financial Officer.	Filed herewith.
32.1	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer.	Filed herewith.
32.2	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the Principal Financial Officer.	Filed herewith.
97	Kennedy-Wilson Holdings, Inc. Amended and Restated Compensation Recovery Policy	Filed herewith.
101	The following materials from Kennedy-Wilson Holdings, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2023 formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets (ii) the Consolidated Statements of Operations and Comprehensive (Loss) Income (iii) the Consolidated Statements of Equity (iv) the Consolidated Statements of Cash Flows (v) related notes to those financial statements, (vi) Schedule III - Real Estate and Accumulated Depreciation and (v) Schedule IV - Loans	Filed with Original Report

__________

† Management Contract, Compensation Plan or Agreement.

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KW-G MULTIFAMILY VENTURE 1, LLC

(A Delaware Limited Liability Company)

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Page

Independent Auditors’ Report (PCAOB ID 185) 1

Consolidated Financial Statements:

Consolidated Statements of Assets, Liabilities, and Net Assets 3

Consolidated Schedules of Investments 4

Consolidated Statements of Operations 5

Consolidated Statements of Changes in Net Assets 6

Consolidated Statements of Cash Flows 7

Notes to Consolidated Financial Statements 8

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Independent Auditors’ Report

To the Members

KW-G Multifamily Venture I, LLC:

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements of KW-G Multifamily Venture I, LLC and its subsidiaries (the Company), which comprise the consolidated statements of assets, liabilities, and net assets, including the consolidated schedules of investments, as of December 31, 2023 and 2022, and the related consolidated statements of operations, changes in net assets, and cash flows for the years ended December 31, 2023 and 2022, and the period from June 25, 2021 (inception) through December 31, 2021 and the related notes to the consolidated financial statements.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years ended December 31, 2023 and 2022 and the period from June 25, 2021 (inception) through December 31, 2021 in accordance with U.S. generally accepted accounting principles.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with U.S. generally accepted accounting principles, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that the consolidated financial statements are issued.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

In performing an audit in accordance with GAAS, we:

•Exercise professional judgment and maintain professional skepticism throughout the audit.

•Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

•Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.

•Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.

•Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.

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We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

/s/ KPMG LLP

Los Angeles, California

March 29, 2024

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KW-G MULTIFAMILY VENTURE 1, LLC

(A Delaware Limited Liability Company)

Consolidated Statements of Assets, Liabilities, and Net Assets


	December 31,
	2023		2022
Assets
Real estate and improvements, at fair value (cost of $831,578,163 and $816,534,912 as of December 31, 2023 and 2022)	$	898,300,000	$	970,450,000
Cash and cash equivalents	7,182,498		10,599,559
Restricted cash	2,803,781		2,868,629
Tenant receivables, net	1,167,161		2,001,914
Prepaid expenses and other assets	2,083,956		1,070,126
Total assets	$	911,537,396	$	986,990,228

Liabilities and Net Assets
Notes payable, at fair value	439,728,467		448,709,940
Accounts payable and accrued expenses	4,244,947		3,177,392
Security deposits and prepaid rent	2,511,097		2,332,148
Total liabilities	446,484,511		454,219,480
Members' net assets	464,096,725		531,814,588
Noncontrolling interests	956,160		956,160
Total liabilities and net assets	$	911,537,396	$	986,990,228

See accompanying notes to consolidated financial statements.

KW-G MULTIFAMILY VENTURE 1, LLC

(A Delaware Limited Liability Company)

Consolidated Schedules of Investments


			December 31, 2023						December 31, 2022
Property	Location	Units	Cost		Fair Value		% Net assets		Cost		Fair Value		% Net assets
Alpine	Salt Lake City, UT	222	$	58,882,200	$	65,100,000	14.0	%	$	58,153,233	$	68,800,000	12.9	%
Apex	Tacoma, WA	209	46,834,808		50,200,000		10.8		45,131,967		54,800,000		10.3
Arya	Tualatin, OR	408	106,871,052		120,000,000		25.9		105,536,219		134,500,000		25.3
Bella Sonoma	Fife, WA	280	82,110,456		96,100,000		20.7		80,211,170		93,200,000		17.5
Foothill	Salt Lake City, UT	450	124,065,730		131,900,000		28.4		122,936,113		147,400,000		27.7
Harrington Square	Renton, WA	217	71,418,178		74,800,000		16.1		70,771,769		79,700,000		15.0
Kirker Creek	Pittsburg, CA	542	180,529,073		185,000,000		39.9		174,882,584		193,400,000		36.4
Townhomes at Lost Canyon	Santa Clarita, CA	157	79,962,840		89,100,000		19.2		79,053,952		92,800,000		17.4
Whitewater Park	Boise, ID	324	80,903,826		86,100,000		18.6		79,857,905		105,850,000		19.9
	Total	2,809	$	831,578,163	$	898,300,000	193.6	%	$	816,534,912	$	970,450,000	182.4	%

See accompanying notes to consolidated financial statements.

KW-G MULTIFAMILY VENTURE 1, LLC

(A Delaware Limited Liability Company)

Consolidated Statements of Operations


	Year Ended December 31, 2023		Year Ended December 31, 2022		Period from June 25, 2021 (Inception) through December 31, 2021
Investment income:
Rent	$	60,913,728	$	57,804,287	$	28,302,866
Other income	7,532,283		6,959,992		3,264,757
Total investment income	68,446,011		64,764,279		31,567,623

Expenses:
Interest expense	17,991,255		17,745,894		8,170,575
Property taxes	7,076,603		6,895,704		3,194,432
General and administrative	5,524,587		3,869,477		1,660,582
Repairs and maintenance	4,549,323		4,064,840		1,937,651
Utilities	4,386,263		3,590,477		1,881,774
Asset management fees	2,162,128		2,138,169		1,104,233
Insurance	2,013,731		1,555,490		784,310
Marketing and promotion	1,823,356		1,657,576		787,490
Property management fees	1,488,367		1,457,122		693,623
Transaction related costs	—		—		8,273,077
Other expenses	—		—		11,860
Total expenses	47,015,613		42,974,749		28,499,607
Net investment income	21,430,398		21,789,530		3,068,016
Unrealized fair value and realized (loss) gains:
Unrealized fair value (loss) gain on real estate and improvements	(87,193,248)		15,242,476		138,672,611
Unrealized fair value gain on notes payable	6,505,000		39,782,000		1,902,999
Unrealized fair value (loss) gain on interest rate cap	—		(15,963)		15,963
Realized loss on notes payable	—		(346,000)		—
Realized gain on interest rate cap	—		190,000		—
Unrealized fair value and realized (losses) gains	(80,688,248)		54,852,513		140,591,573
(Decrease) increase in net assets resulting from operations	(59,257,850)		76,642,043		143,659,589
Increase in net assets resulting from operations attributable to noncontrolling interests	(135,000)		(125,629)		—
(Decrease) increase in net assets resulting from operations attributable to members	$	(59,392,850)	$	76,516,414	$	143,659,589

See accompanying notes to consolidated financial statements.

KW-G MULTIFAMILY VENTURE 1, LLC

(A Delaware Limited Liability Company)

Consolidated Statements of Changes in Net Assets


	KW-G Multifamily Venture 1 Manager, LLC		KW-G Blocker, LLC		Members' Net Assets		Noncontrolling Interests		Total
Net assets, June 25, 2021 (Inception)	$	—	$	—	$	—	$	—	$	—
Change in net assets resulting from operations:
Net investment income	1,564,688		1,503,328		3,068,016		—		3,068,016
Unrealized fair value gain on real estate and improvements	70,723,032		67,949,579		138,672,611		—		138,672,611
Unrealized fair value gain on notes payable	970,529		932,470		1,902,999		—		1,902,999
Unrealized fair value gain on interest rate cap	8,141		7,822		15,963		—		15,963
Increase in net assets resulting from operations	73,266,390		70,393,199		143,659,589		—		143,659,589
Potential incentive allocation	15,670,000		(15,670,000)		—		—		—
Change in net assets resulting from capital transactions:
Contributions	181,744,132		174,616,912		356,361,044		—		356,361,044
Distributions	(2,024,700)		(1,945,300)		(3,970,000)		—		(3,970,000)
Increase in net assets resulting from capital transactions	195,389,432		157,001,612		352,391,044		—		352,391,044
Increase in net assets	268,655,822		227,394,811		496,050,633		—		496,050,633
Net assets, December 31, 2021	268,655,822		227,394,811		496,050,633		—		496,050,633
Change in net assets resulting from operations:
Net investment income	11,048,590		10,615,311		21,663,901		125,629		21,789,530
Unrealized fair value gain on real estate and improvements	7,773,663		7,468,813		15,242,476		—		15,242,476
Unrealized fair value gain on notes payable	20,288,820		19,493,180		39,782,000		—		39,782,000
Unrealized fair value loss on interest rate cap	(8,141)		(7,822)		(15,963)		—		(15,963)
Realized loss on notes payable	(176,460)		(169,540)		(346,000)		—		(346,000)
Realized gain on interest rate cap	96,900		93,100		190,000		—		190,000
Increase in net assets resulting from operations	39,023,372		37,493,042		76,516,414		125,629		76,642,043
Potential incentive allocation	5,226,000		(5,226,000)		—		—		—
Change in net assets resulting from capital transactions:
Contributions	1,804,146		1,733,395		3,537,541		956,160		4,493,701
Distributions	(22,587,900)		(21,702,100)		(44,290,000)		(125,629)		(44,415,629)
(Decrease) increase in net assets resulting from capital transactions	(15,557,754)		(25,194,705)		(40,752,459)		830,531		(39,921,928)
Increase in net assets	23,465,618		12,298,337		35,763,955		956,160		36,720,115
Net assets, December 31, 2022	$	292,121,440	$	239,693,148	$	531,814,588	$	956,160	$	532,770,748

KW-G MULTIFAMILY VENTURE 1, LLC

(A Delaware Limited Liability Company)

Consolidated Statements of Changes in Net Assets


	KW-G Multifamily Venture 1 Manager, LLC		KW-G Blocker, LLC		Members' Net Assets		Noncontrolling Interests		Total
Net assets, December 31, 2022	$	292,121,440	$	239,693,148	$	531,814,588	$	956,160	$	532,770,748
Change in net assets resulting from operations:
Net investment income	10,860,653		10,434,745		21,295,398		135,000		21,430,398
Unrealized fair value loss on real estate and improvements	(44,468,556)		(42,724,692)		(87,193,248)		—		(87,193,248)
Unrealized fair value gain on notes payable	3,317,550		3,187,450		6,505,000		—		6,505,000
(Decrease) increase in net assets resulting from operations	(30,290,353)		(29,102,497)		(59,392,850)		135,000		(59,257,850)
Potential incentive allocation	(10,981,000)		10,981,000		—		—		—
Change in net assets resulting from capital transactions:
Contributions	930,743		894,244		1,824,987		—		1,824,987
Distributions	(5,176,500)		(4,973,500)		(10,150,000)		(135,000)		(10,285,000)
(Decrease) increase in net assets resulting from capital transactions	(15,226,757)		6,901,744		(8,325,013)		(135,000)		(8,460,013)
Decrease in net assets	(45,517,110)		(22,200,753)		(67,717,863)		—		(67,717,863)
Net assets, December 31, 2023	$	246,604,330	$	217,492,395	$	464,096,725	$	956,160	$	465,052,885

See accompanying notes to consolidated financial statements.

KW-G MULTIFAMILY VENTURE 1, LLC

(A Delaware Limited Liability Company)

Consolidated Statements of Cash flows


	Year Ended December 31, 2023		Year Ended December 31, 2022		Period from June 25, 2021 (Inception) through December 31, 2021
Cash flows from operating activities:
(Decrease) increase in net assets resulting from operations	$	(59,257,850)	$	76,642,043	$	143,659,589
Adjustments to reconcile (decrease) increase in net assets resulting from operations to net cash provided by operating activities:
Unrealized fair value loss (gain) on real estate and improvements	87,193,248		(15,242,476)		(138,672,611)
Unrealized fair value gain on notes payable	(6,505,000)		(39,782,000)		(1,902,999)
Unrealized fair value loss (gain) on interest rate cap	—		15,963		(15,963)
Changes in operating assets and liabilities:
Tenant receivables	834,753		410,012		(2,411,926)
Prepaid expenses and other assets	(1,013,830)		429,918		(674,307)
Accounts payable and accrued expenses	1,067,555		124,834		2,175,819
Security deposits and prepaid rent	178,949		192,315		124,918
Net cash provided by operating activities	22,497,825		22,790,609		2,282,520
Cash flows from investing activities:
Cash and restricted cash from Contribution Transaction	—		—		18,742,076
Improvements to real estate	(15,043,248)		(11,707,524)		(4,827,389)
Net cash (used in) provided by investing activities	(15,043,248)		(11,707,524)		13,914,687
Cash flows from financing activities:
Contributions from members	1,824,987		3,537,541		—
Contributions from noncontrolling interests	—		956,160		—
Distributions to members	(10,150,000)		(44,290,000)		(3,970,000)
Distributions to noncontrolling interests	(135,000)		(125,629)		—
Principal payments on notes payable	(2,476,473)		(89,687,339)		(1,381,837)
Proceeds from notes payable	—		121,149,000		—
Net cash used in financing activities	(10,936,486)		(8,460,267)		(5,351,837)
Net change in cash and cash equivalents and restricted cash	(3,481,909)		2,622,818		10,845,370
Cash and cash equivalents and restricted cash, beginning of period	13,468,188		10,845,370		—
Cash and cash equivalents and restricted cash, end of period	$	9,986,279	$	13,468,188	$	10,845,370

Supplemental disclosure of cash flow information:
Cash paid for interest	$	16,467,007	$	15,179,671	$	6,812,208

Supplemental disclosure of non cash transactions
Accrual for additions to real estate and improvements	$	42,906	$	112,047	$	215,499
Contribution Transaction:
Real estate and improvements, at fair value	$	—	$	—	$	800,000,000
Notes payable, at fair value	—		—		460,315,117
Initial capital contributions	—		—		356,361,044
Other working capital	—		—		2,065,917

See accompanying notes to consolidated financial statements

KW-G MULTIFAMILY VENTURE I, LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2023 and 2022

(1) Organization

KW-G Multifamily Venture 1, LLC (the “Company”) is a Delaware limited liability company formed on June 25, 2021 (Inception) between KW-G Multifamily Venture 1 Manager, LLC (“KW”) and KW-G Blocker, LLC (“G-Blocker”). The Company is owned 51% by KW and 49% by G-Blocker. The Company was formed for the purpose of acquiring, developing, owning, and operating multifamily real estate assets located in the United States. The Company shall continue in full force and effect until June 25, 2031, or until dissolution prior thereto pursuant to the provisions of section 10.1 of the Company’s Limited Liability Company Agreement (the “Operating Agreement”).

In connection with the formation of the Company, KW and G-Blocker entered into a Membership Interest Purchase and Sale Agreement (the “MIPA”) on June 25, 2021. Under the MIPA, KW, the owner of a 100% interest in nine multifamily properties (the “Properties”), sold a 49% interest in the Properties to G-Blocker in exchange for $166,455,593, including the assumption of debt. Immediately following the closing of the sale, KW and G-Blocker contributed their interests in the Properties into the Company and agreed to initial capital balances of $181,744,132 for KW's 51% ownership interest and $174,616,912 for G-Blocker's 49% ownership interest (the "Contribution Transaction"). The agreed upon value of the Properties was $800,000,000, and as part of the transaction the Company assumed $460,315,117 of debt that was secured by the Properties. The Properties and their locations are stated on the consolidated schedules of investments.

On July 12, 2021, the Company established nine wholly-owned subsidiaries intended to be treated as real estate investment trusts (the “REITs’"). Simultaneously, the Company contributed each of the Properties into one of the REITs in exchange for 100% of the Common Units as defined by the Contribution Agreement of each of the REITs. In January 2022, the REITs admitted preferred members to meet the minimum number of investors required to quality as real estate investment trusts. The preferred members contributed $956,160 during the year ended December 31, 2022 and the ownership interests of these preferred members are reported as noncontrolling interests on the accompanying consolidated financial statements.

(2) Summary of Significant Accounting Policies

(a) Basis of Accounting

The Company has determined that it has the attributes of an investment company. As a result of this determination, the Company has concluded that it is appropriate to record its real estate investments at fair value consistent with the measurement principles for investment companies under the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 946, Financial Services-Investment Companies.

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") All references to authoritative accounting literature in the Company’s consolidated financial statements are referred in accordance with the FASB’s ASC.

(b) Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated.

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(d) Cash and Cash Equivalents and Restricted Cash

The Company maintains its cash in federally insured banking institutions. The balances at these institutions, at times, exceed the federally insured limits and as a result there is a concentration of credit risk related to the amounts in excess of the federally insured limits. No losses have been experienced related to these excess balances. The Company considers all highly liquid, short‑term investments with an original maturity of three months or less when purchased to be cash equivalents.

KW-G MULTIFAMILY VENTURE I, LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2023 and 2022

Restricted cash consists of reserves and holdbacks held by the lenders for the notes payable secured by the Properties.

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated statements of assets, liabilities, and net assets that sum to the total of the same such amounts shown in the consolidated statements of cash flows as of December 31, 2023 and 2022:


	December 31,
	2023		2022
Cash and cash equivalents	$	7,182,498	$	10,599,559
Restricted cash	2,803,781		2,868,629
Total cash and cash equivalents and restricted cash shown in the consolidated statements of cash flows	$	9,986,279	$	13,468,188

(e) Fair Value Measurements

The Company measures the fair value of its real estate and improvements and notes payable in accordance with ASC Topic 820, Fair Value Measurement. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date. Investments measured and reported at fair value are classified and disclosed in one of the following three categories:

•Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that the Company have the ability to access.

•Level 2 – Valuations based on quoted prices in less active, dealer or broker markets. Fair values are primarily obtained from third‑party pricing services for identical or comparable assets or liabilities.

•Level 3 – Valuations derived from other valuation methodologies, including pricing models, discounted cash flow models, and similar techniques, and not based on market, exchange, dealer, or broker‑traded transactions. Level 3 valuations incorporate certain assumptions and projections that are not observable in the market and require significant judgment in determining the fair value assigned to such assets or liabilities.

The fair value of real estate and improvements is generally based on the direct capitalization approach, the Company applies a market derived capitalization rate to current and future income streams with appropriate adjustments for tenant vacancies or rent-free periods. These capitalization rates and future income streams are derived from comparable property and leasing transactions and are considered to be key inputs in the valuation. Other factors that are taken into consideration include tenancy details, planning, building and environmental factors that might affect the property. The valuation of real estate and improvements is considered within Level 3 in the fair value hierarchy.

Changes in fair value of real estate and improvements are reflected as unrealized gains or losses in the consolidated statements of operations. Unrealized gains or losses are reclassified to realized gains or losses upon the receipt of sales proceeds or liquidation of real estate and improvements. In instances of partial realization on real estate and improvements, the cost basis is generally relieved or credited according to the ratio of cost to fair value, and partial realized gain or loss may be recognized.

The Company capitalizes all direct costs incurred related to the acquisition of and additions to real estate and improvements and those associated with the acquisition of tenants, such as leasing commissions and tenant improvements. Capitalized costs included in the cost basis of real estate and improvements are the following costs: land, building, building improvements, tenant improvements, leasing commissions, direct acquisition costs, construction in progress, and furniture, fixtures and equipment. Ordinary repairs and maintenance are expensed as incurred.

No provision is made for depreciation on the cost of real estate projects; however, the effects of actual physical deterioration or obsolescence, if any, are taken into consideration in the application of the methods used in estimating fair value.

KW-G MULTIFAMILY VENTURE I, LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2023 and 2022

The Company elected the fair value option under ASC 825, Financial Instruments, to record notes payable at fair value on a recurring basis. Notes payable are recorded at fair value at each period end with changes in fair value being recorded to unrealized fair value gain on notes payable on the accompanying consolidated statements of operations.

In valuing notes payable, the Company considers significant inputs to be the term of the debt, value of collateral, market loan-to-value ratios, market interest rates and spreads, and credit quality of investment entities. The valuation of notes payable is considered within Level 3 in the fair value hierarchy.

Interest rate caps are stated at fair value, which are determined using a pricing model that incorporates market observable inputs for interest rate curves and unobservable inputs for credit spreads. The valuation of interest rate caps is considered within Level 2 in the fair value hierarchy.

(f) Tenant Receivables

Tenant receivables are recorded at the contractual amount as determined by the underlying agreements and do not bear interest. The Company recognizes revenue to the extent that amounts are probable that substantially all rental income will be collected.

(g) Derivative Instruments and Hedging Activities

The Company records all derivative financial instruments on the consolidated statements of assets, liabilities and net assets at fair value as of the reporting date. The resulting changes in the derivatives’ fair values are included in earnings as a part of unrealized fair value gain on interest rate cap on the consolidated statements of operations. The Company’s objective in using interest rate derivatives are to add stability to interest expense, and manage its exposure to interest rate movements and, therefore, manage its cash outflows as they relate to the underlying debt instrument. The Company uses interest rate caps as part of its interest rate risk management strategy relating to its variable rate debt instruments.

(h) Income Taxes

The Company is not subject to federal or state income taxes. Income or loss is allocated to the members and included in their respective income tax returns. Under applicable federal and state income tax rules, limited liability companies are generally not subject to income taxes and upon filing of their initial tax returns, the REITs elected to be taxed as real estate investment trusts under Section 856 through 860 of the Internal Revenue Code of 1986 (the “Code”). To qualify as real estate investment trusts, the REITs must distribute annually at least 90% of their adjusted taxable income, as defined in the Code, to its shareholders and satisfy certain other organizational and operating requirements. If the REITs fail to qualify as real estate investment trusts in any taxable year, they will be subject to federal income taxes on its taxable income at regular corporate rates and may not be able to qualify as real estate investment trusts for subsequent taxable years. The Company believes that the REITs have met all of the real estate investment trust distribution and technical requirements for the the years ended December 31, 2023 and 2022 and period from June 25, 2021 (Inception) through December 31, 2021, and was not subject to any federal income taxes.

In accordance with ASC Topic 740, Income Taxes, the Company periodically evaluate its tax positions, including its status as pass‑through entities, to evaluate whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits as of December 31, 2023. Based on the Company’s evaluation, there are no uncertain tax positions or open examinations. Accordingly, no provision or liability for income taxes is included in the accompanying consolidated financial statements.

(i) Revenue Recognition

Revenues from tenants are recorded when due from tenants and are recognized monthly as they are earned, which generally approximates a straight-line basis. Apartment units are rented under short-term leases (generally, lease terms of nine to twelve months). Rent includes base rent and operating expense reimbursements.

(j) Expenses

Expenses include all costs incurred by the Company in connection with the management, operation, maintenance, and repair of the real estate projects and are expensed as incurred.

KW-G MULTIFAMILY VENTURE I, LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2023 and 2022

(3) Real Estate and Improvements, at Fair Value

The valuations of the Company’s real estate and improvements include estimates that utilize unobservable inputs that are significant to the overall valuation and are therefore categorized as Level 3 valuations. The following table summarizes the changes in real estate and improvements during the years ended December 31, 2023 and 2022 and period from June 25, 2021 (Inception) through December 31, 2021:


Balance as of June 25, 2021 (Inception)	$	—
Net unrealized fair value gain on real estate and improvements	138,672,611
Additions to real estate at contribution date fair value	800,000,000
Improvements to real estate	4,827,389
Balance as of December 31, 2021	943,500,000
Net unrealized fair value gain on real estate and improvements	15,242,476
Improvements to real estate	11,707,524
Balance as of December 31, 2022	970,450,000
Net unrealized fair value loss on real estate and improvements	(87,193,248)
Improvements to real estate	15,043,248
Balance as of December 31, 2023	$	898,300,000

The Properties held by the Company had capitalization rates ranging from 5.00% and 5.50% as of December 31, 2023 and 4.25% to 5.00% as of December 31, 2022.

The significant unobservable inputs used in the fair value measurement of the Company's real estate and improvements are the selection of capitalization rates. Significant increases (decreases) in these inputs in isolation would result in significantly lower (higher) fair value measurements, respectively.

(4) Derivatives

The Company has used interest rate caps in order to reduce the effect of interest rate fluctuations or risk of certain real estate investment’s interest expense on variable rate debt. The Company is exposed to credit risk in the event of non-performance by the counterparty to this financial instrument. Management believes the risk of loss due to non-performance to be minimal.

The Company had an interest rate cap with a notional amount of $14,300,000 that was set to mature on July 1, 2024, and effectively capped LIBOR at 4.00%. The fair value of the interest rate cap was $15,963 as of December 31, 2021 and was included in prepaid expenses and other assets on the accompanying consolidated statements of assets, liabilities, and net assets. During the year ended December 31, 2022, the Company sold the interest rate cap and received proceeds of $190,000.

(5) Members’ Equity

(a) Distributions

Distributions of net cash flow shall initially be made to the members based on the percentage of their contributed capital. The initial amount apportioned to the members shall be distributed as follows:

(i) First, to the members, on a pari passu basis, pro rata in accordance with their respective ownership interests, until the members have received cumulative distributions equal to the sum of their aggregate unreturned capital contributions and results in each member having achieved an internal rate of return equal to 7.5%.

(ii) Second, to the members, on a pari passu basis, 85% to the members pro rata in accordance with their respective ownership interests and 15% to KW until the cumulative amount distributed results in each member having achieved an internal rate of return equal to 10%.

KW-G MULTIFAMILY VENTURE I, LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2023 and 2022

(iii) Third, to the members, on a pari passu basis, 80% to the members pro rata in accordance with their respective ownership interests and 20% to KW until the cumulative amount distributed results in each member having achieved an internal rate of return equal to 12%.

(iv) Fourth, to the members on a pari passu basis, 75% to the members pro rata in accordance with their respective ownership interests and 25% to KW.

(b) Income allocations

Net income or losses are allocated to the members pro rata in proportion to their respective ownership interests. The potential incentive allocation recorded on the consolidated statements of changes in net assets represents KW’s allocation of such income, gains and losses, calculated as if all investments were sold and the Company was fully liquidated at fair value determined at the end of the reporting period. As of December 31, 2023, KW’s net assets account reflects such potential incentive allocation of $9,915,000.

(6) Notes Payable, at Fair Value

As of December 31, 2023, notes payable, at fair value on the accompanying consolidated statements of assets, liabilities, and net assets consist of the following:


Property	Lender	Principal Balance		Inception to Date Unrealized Fair Value Gain		Notes Payable, at Fair Value		Interest Rate		Maturity Date	Terms
Alpine	Fannie Mae	$	28,800,000	$	(1,778,000)	$	27,022,000	4.28	%	11/29/2028	IO, PP
Apex	Fannie Mae	18,560,919		(712,000)		17,848,919		3.86	%	4/1/2026	PP
Arya	Freddie Mac	58,136,454		(3,231,000)		54,905,454		3.59	%	12/1/2026	PP
Bella Sonoma(1)	Fannie Mae	34,423,448		(1,304,000)		33,119,448		3.59	%	12/1/2024	PP
Foothill	Fannie Mae	84,000,000		(13,997,000)		70,003,000		3.04	%	7/1/2031	IO, PP
Harrington Square	Fannie Mae	45,120,000		(7,518,000)		37,602,000		3.04	%	7/1/2031	IO, PP
Kirker Creek	Fannie Mae	121,149,000		(8,328,000)		112,821,000		4.36	%	10/1/2029	IO, PP
Townhouses at Lost Canyon	Fannie Mae	42,728,646		(2,157,000)		40,571,646		3.63	%	9/1/2026	PP
Whitewater Park	Fannie Mae	55,000,000		(9,165,000)		45,835,000		3.04	%	7/1/2031	IO, PP
	Total	$	487,918,467	$	(48,190,000)	$	439,728,467

(1)The Company intends to refinance this loan in 2024 before it matures.

IO = Interest only

PP = Prepayment penalty applicable

As of December 31, 2022, notes payable, at fair value on the accompanying consolidated statements of assets, liabilities, and net assets consist of the following:

KW-G MULTIFAMILY VENTURE I, LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2023 and 2022


Property	Lender	Principal Balance		Inception to Date Unrealized Fair Value Gain		Notes Payable, at Fair Value		Interest Rate		Maturity Date	Terms
Alpine	Fannie Mae	$	28,800,000	$	(1,226,000)	$	27,574,000	4.28	%	11/29/2028	IO, PP
Apex	Fannie Mae	18,925,124		(688,000)		18,237,124		3.86	%	4/1/2026	PP
Arya	Freddie Mac	59,288,791		(3,089,000)		56,199,791		3.59	%	12/1/2026	PP
Bella Sonoma	Fannie Mae	35,189,025		(1,409,000)		33,780,025		3.59	%	12/1/2024	PP
Foothill	Fannie Mae	84,000,000		(12,316,000)		71,684,000		3.04	%	7/1/2031	IO, PP
Harrington Square	Fannie Mae	45,120,000		(6,615,000)		38,505,000		3.04	%	7/1/2031	IO, PP
Kirker Creek	Fannie Mae	121,149,000		(6,190,000)		114,959,000		4.36	%	10/1/2029	IO, PP
Townhouses at Lost Canyon	Fannie Mae	42,923,000		(2,088,000)		40,835,000		3.63	%	9/1/2026	PP
Whitewater Park	Fannie Mae	55,000,000		(8,064,000)		46,936,000		3.04	%	7/1/2031	IO, PP
	Total	$	490,394,940	$	(41,685,000)	$	448,709,940

IO = Interest only

PP = Prepayment penalty applicable

Future principal payments on the notes payable are as follows:


Year Ended December 31,
2024	$	36,775,929
2025	2,453,348
2026	114,620,190
2027	—
2028	28,800,000
Thereafter	305,269,000
Total	$	487,918,467

(7) Related Party Transactions

The Operating Agreement provides for KW to manage the assets of the Company. The Company will pay an annual asset management fee to KW equal to 0.6% per annum of Average Aggregate Actively Invested Capital as defined in the Operating Agreement.

The Company has also entered into various property management agreements (the “Property Management Agreements”) with KW Multi-Family Management Group, LLC (the “Property Manager”), an affiliate of KW, to manage the operations of the Properties. Under this arrangement, the Property Manager is paid a property management fee ranging from 2.00% - 2.50% of Gross Revenue of the Property as defined by the Property Management Agreements and reimbursements for all costs and expenses incurred in the hiring of on-site employees.

Costs and expenses incurred related to such services for the year ended December 31, 2023 and 2022 and period from June 25, 2021 (Inception) through December 31, 2021, consist of the following:

KW-G MULTIFAMILY VENTURE I, LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2023 and 2022


	Year Ended December 31, 2023		Year Ended December 31, 2022		Period from June 25, 2021 (Inception) through December 31, 2021
Asset management	$	2,162,128	$	2,138,169	$	1,104,233
Property management	1,488,367		1,457,122		693,623
Total	$	3,650,495	$	3,595,291	$	1,797,856

Asset management and property management fees are included on the accompanying consolidated statements of operations. As of December 31, 2023 and 2022, amounts payable to related parties totaled $534,542 and $534,542, respectively, and are included in accounts payable and accrued expenses on the accompanying consolidated statements of assets, liabilities, and net assets.

(8) Financial Highlights

The internal rate of return (IRR) of the Company, net of all fees and incentive allocations to the Company is (11.3)% for the year ended December 31, 2023 and 17.2% from June 25, 2021 (Inception) through December 31, 2023.

The IRR was computed based on quarterly compounding periods of the cash inflows (capital contributions), outflows (cash distributions), and the ending net assets as of the end of the year (residual value) of the Company’s capital account as of December 31, 2023.


Ratio to average G-Blocker's capital:
Net investment income	13.5	%

Total expenses	41.1	%
Potential incentive allocation to KW	6.7	%
Total expenses and potential incentive allocation	47.8	%

(9) Subsequent Events

In preparing these consolidated financial statements, the Company has evaluated subsequent events and transactions for potential recognition or disclosure through March 29, 2024, the date these consolidated financial statements were issued. No events were identified that would require additional disclosure to the consolidated financial statements.

VINTAGE HOUSING HOLDINGS, LLC

(A California Limited Liability Company)

Table of Contents


						Page
Independent Auditor's Report - CohnReznick LLP						17
Consolidated Financial Statements:
Consolidated Balance Sheets						19
Consolidated Statements of Operations						20
Consolidated Statements of Changes in Members' Deficit						20
Consolidated Statements of Cash Flows						21
Notes to Consolidated Financial Statements						22
Financial Statements Schedule
Schedule III - Real Estate and Accumulated Depreciation						32

Independent Auditor's Report

To Management

Vintage Housing Holdings, LLC and Subsidiaries

Opinion

We have audited the consolidated financial statements of Vintage Housing Holdings, LLC and Subsidiaries, which comprise the consolidated balance sheet as of December 31, 2022, and the related consolidated statements of operations, members' deficit, and cash flows for the year then ended, and the related notes to the consolidated financial statements.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of Vintage Housing Holdings, LLC and Subsidiaries as of December 31, 2022, and the results of their operations and their cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Vintage Housing Holdings, LLC and Subsidiaries and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Emphasis of Matter

As discussed in Note 2 to the consolidated financial statements, in 2022, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 842, Leases. Our opinion is not modified with respect to this matter.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Vintage Housing Holdings, LLC and Subsidiaries' ability to continue as a going concern for one year after the date that the consolidated financial statements are available to be issued.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

In performing an audit in accordance with GAAS, we:

•Exercise professional judgment and maintain professional skepticism throughout the audit.

•Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Vintage Housing Holdings, LLC and Subsidiaries' internal control. Accordingly, no such opinion is expressed.

•Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Vintage Housing Holdings, LLC and Subsidiaries' ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.

Other Matter

The accompanying consolidated balance sheet of Vintage Housing Holdings, LLC and Subsidiaries as of December 31, 2023, and the related consolidated statements of operations, members’ deficit, and cash flows for the years ended December 31, 2023 and 2021, and the related notes to the consolidated financial statements and financial statement schedule III - real estate and accumulated depreciation were not audited, reviewed, or compiled by us, and, accordingly, we do not express an opinion or any other form of assurance on them.

/s/ CohnReznick LLP

Atlanta, Georgia

March 31, 2023

VINTAGE HOUSING HOLDINGS, LLC

(A California Limited Liability Company)

Consolidated Balance Sheets

December 31, 2023 and 2022


	December 31,
	2023		2022
Assets	(unaudited)
Cash and cash equivalents	$	7,093,404	$	3,377,655
Restricted cash	10,117,049		3,201,528
Accounts receivable, net	7,555,849		6,325,161
Notes receivable	62,392,481		30,086,175
Equity method investments	4,952,703		11,460,687
Real estate, net of depreciation and amortization	104,229,575		154,225,771
Other assets, net	22,482,441		9,203,747
Total assets	$	218,823,502	$	217,880,724

Liabilities and Members' Deficit
Accounts payable	$	164,923	$	271,526
Due to affiliates	12,627,305		23,116,086
Accrued expenses	23,740,875		11,138,281
Deferred revenue	56,386,998		25,770,256
Mortgage and note payable	165,239,304		214,143,577
Total liabilities	258,159,405		274,439,726
Retained earnings	200,647,956		121,200,245
Members' deficit	(239,983,859)		(177,759,247)
Total members' deficit	(39,335,903)		(56,559,002)
Total liabilities and members' deficit	$	218,823,502	$	217,880,724

See accompanying notes to consolidated financial statements.

VINTAGE HOUSING HOLDINGS, LLC

(A California Limited Liability Company)

Consolidated Statements of Operations

For the Years Ended December 31, 2023, 2022 and 2021


	Year Ended December 31,
	2023		2022		2021
Revenue	(unaudited)				(unaudited)
Rent	$	34,247,634	$	29,382,364	$	27,453,079
Fees	4,351,831		3,801,153		1,929,216
Interest income	1,188,760		1,131,624		1,149,654
Total revenue	39,788,225		34,315,141		30,531,949

Expenses
Asset management fees	3,948,416		3,424,488		3,180,759
Repairs and maintenance	3,631,437		2,739,681		2,178,048
Salaries	3,633,645		2,816,812		2,810,711
Utilities	3,239,857		2,791,882		2,639,696
Property management fees	1,669,833		1,463,500		1,389,192
Insurance	1,023,662		694,788		521,490
Depreciation and amortization	5,774,691		5,788,704		5,920,105
General and administrative expense	2,924,194		1,712,206		1,254,712
Total expenses	25,845,735		21,432,061		19,894,713

Equity (loss) income from joint venture investments	(3,918,500)		610,093		5,832,804
Interest expense	(12,764,897)		(9,247,686)		(8,048,455)
Gain on sale of real estate	81,959,529		1,762,204		2,582,124
Other income (expense)	60,632		(277,167)		(1,330,441)
Net income	$	79,279,254	$	5,730,524	$	9,673,268

See accompanying notes to consolidated financial statements

VINTAGE HOUSING HOLDINGS, LLC

(A California Limited Liability Company)

Consolidated Statements of Changes in Members' Deficit

For the Years Ended December 31, 2023, 2022 and 2021


	KW-VHH Member, LLC		Sierra VHH Holdings, LLC		Total
Balance, December 31, 2020 (unaudited)	$	(2,207,496)	$	(4,162,465)	$	(6,369,961)
Distributions (unaudited)	(25,063,674)		(26,463,694)		(51,527,368)
Net income (unaudited)	5,803,961		3,869,307		9,673,268
Balance, December 31, 2021 (unaudited)	(21,467,209)		(26,756,852)		(48,224,061)
Distributions	(7,918,808)		(6,146,657)		(14,065,465)
Net income	3,438,314		2,292,210		5,730,524
Balance, December 31, 2022	(25,947,703)		(30,611,299)		(56,559,002)
Distributions (unaudited)	(44,584,329)		(17,471,826)		(62,056,155)
Net income (unaudited)	47,567,552		31,711,702		79,279,254
Balance, December 31, 2023 (unaudited)	$	(22,964,480)	$	(16,371,423)	$	(39,335,903)

See accompanying notes to consolidated financial statements.

VINTAGE HOUSING HOLDINGS, LLC

(A California Limited Liability Company)

Consolidated Statements of Cash flows

For the Years Ended December 31, 2023, 2022 and 2021


	Year Ended December 31,
	2023		2022		2021
	(unaudited)				(unaudited)
Cash flows from operating activities:
Net income	$	79,279,254	$	5,730,524	$	9,673,268
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,774,691		5,788,704		5,920,105
Amortization of debt issuance costs	805,815		941,951		1,048,641
Gain on sale of real estate	(81,959,529)		(1,762,204)		(2,582,124)
Equity income from equity method investments	3,918,500		(610,093)		(5,832,804)
Changes in operating assets and liabilities:
Accounts receivable	(1,861,619)		(1,462,585)		(135,369)
Other assets	(1,313,001)		(8,202)		(43,173)
Operating distributions from equity method investments	130,769		3,729,222		9,016,062
Accounts payable and accrued expenses	(469,702)		481,021		839,705
Net cash provided by operating activities	4,305,178		12,828,338		17,904,311
Cash flows from investing activities:
Acquisitions and improvements to real estate	(9,202,094)		(16,808,127)		(56,356,335)
Proceeds from sale of real estate	134,312,002		—		4,985,790
Collection of notes receivable	1,012,493		1,620,788		2,777,752
Acquisition and contributions to equity method investments	(4,299,802)		(3,603,062)		—
Investing distributions from equity method investments	6,758,517		4,500,000		1,346,648
Net cash (used in) provided by investing activities	128,581,116		(14,290,401)		(47,246,145)
Cash flows from financing activities:
Advances from (repayments to) affiliates	(10,488,781)		18,836,474		2,919,519
Distributions to Members	(62,056,155)		(14,065,465)		(51,527,368)
Principal payments on mortgage loans	(78,490,434)		(12,091,234)		(25,025,117)
Payment of loan fees	(1,200,196)		(237,414)		(1,639,423)
Proceeds from mortgage loans	29,980,542		12,547,503		104,222,144
Net cash provided by (used in) financing activities	(122,255,024)		4,989,864		28,949,755
Net change in cash and cash equivalents and restricted cash	10,631,270		3,527,801		(392,079)
Cash and cash equivalents and restricted cash, beginning of year	6,579,183		3,051,382		3,443,461
Cash and cash equivalents and restricted cash, end of year	$	17,210,453	$	6,579,183	$	3,051,382

Supplemental disclosure of cash flow information:
Cash paid for interest	$	11,783,911	$	8,305,735	$	6,837,587

See accompanying notes to consolidated financial statements.

VINTAGE HOUSING HOLDINGS, LLC

(A California Limited Liability Company)

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2023, 2022 and 2021

(1) Organization

Vintage Housing Holdings, LLC (the “Company”) is a California limited liability company between KW-VHH Member, LLC (“KW”) and Sierra VHH Holdings, LLC (“Sierra”). The Company was formed for the purpose of acquiring, developing, owning, and operating affordable multifamily real estate assets located in the Western United States. The Company typically utilizes tax-exempt bond financing and the sale of federal tax credits to help finance its investments. The term of the Company shall be perpetual unless the Company is dissolved, wound up and cancelled based on provisions in the operating agreement between KW and Sierra. KW and Sierra are obligated to commit additional capital only to the extent that both members agree to pursue additional investments.

As of December 31, 2023 the Company consolidates ten properties listed below:


Property	Location	Total Units
Vintage at Spokane	Spokane, WA	287
Forest Creek	Spokane, WA	252
Silver Creek	Pasco, WA	242
Vintage at Silverdale	Silverdale, WA	240
Vintage at Mount Vernon	Mount Vernon, WA	154
Vintage at Richland	Richland, WA	150
Vintage at Chehalis	Chehalis, WA	150
Vintage at Sequim	Sequim, WA	118
Vintage at Burien	Burien, WA	101
Elk Creek Apartments, LLC	Sequim, WA	138

The Company also has three investments that the real estate was previously consolidated and subsequently been sold but still has remaining non real estate assets and liabilities that are consolidated. In addition the Company has a retail investment that is consolidated as a wholly owned entity.

In addition to the consolidated properties above, the Company has ownership interests in 39 other properties but does not control and; therefore, treats its investment on the equity method of accounting.

(2) Summary of Significant Accounting Policies

The accompanying financial statements have been prepared on an accrual basis of accounting in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The following is a summary of the significant accounting policies of the Company:

(a) Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated.

(b) Cash and Cash Equivalents and Restricted Cash

Restricted cash consists of reserves and holdbacks held by the lenders for the mortgage loans secured by the underlying properties and reserves associated with potential guarantees associated with operating deficits at properties.

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows as of December 31, 2023 and 2022:


	December 31,
	2023		2022
	(unaudited)
Cash and cash equivalents	$	7,093,404	$	3,377,655
Restricted cash	10,117,049		3,201,528
Total cash and cash equivalents and restricted cash shown in the consolidated statements of cash flows	$	17,210,453	$	6,579,183

The Company’s investments are concentrated in affordable multifamily properties located in the Western United States with the majority located in the state of Washington. Adverse conditions in the sector or geographic location would likely result in a material decline in the value of the Company’s investment.

(d) Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, and reported amounts of income and expenses. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Such estimates and assumptions are adjusted when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods. The most significant estimates relate to allowance for depreciation and useful lives, deferred revenue, and contingencies.

(e) Accounts Receivable

Accounts receivable are recorded at the contractual amount as determined by the underlying agreements and do not bear interest. The Company recognizes revenue to the extent that amounts are probable that substantially all rental income will be collected. Tenant receivables are charged to bad debt expense when they are determined to be uncollectible based upon a periodic review of the accounts by management. U.S. GAAP requires that the allowance method be used to recognize bad debts; however, the effect of using the direct write-off method is not materially different from the results that would have been obtained under the allowance method.

(f) Real Estate

Depreciation is provided for in amounts sufficient to relate the cost of the depreciable assets to operations over their estimated service lives using the straight-line method. Improvements are capitalized, while expenditures for maintenance and repairs are charged to expense as incurred. Estimated service lives are as follows:

•Building and improvements 40 years

•Land improvements 15 years

•Furniture, fixtures and equipment 5 years

Amortization includes tax credit monitoring fees that are amortized on a straight-line basis over the 15 year compliance period.

Depreciation and amortization expense for the years end December 31, 2023, 2022 and 2021 was $5,774,691 (unaudited), $5,788,704 and $5,920,105 (unaudited), respectively.

(g) Impairment of long-lived assets

In accordance with ASC Subtopic 360-10, Property, Plant and Equipment for long-lived assets, the Company's properties are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If indications of impairment exist, the Company will evaluate the properties by comparing the carrying amount of the properties to the estimated future undiscounted cash flows of the property. If impairment exists, an impairment loss will be recognized based on the amount by which the carrying amount exceeds the fair value of the asset. For the years ended December 31, 2023, 2022 and 2021, there were no impairments recorded.

(h) Distributions from joint venture investments

The Company utilizes the nature of distributions approach and distributions are reported under operating cash flow unless the facts and circumstances of a specific distribution clearly indicate that it is a return of capital (e.g., a liquidating dividend or distribution of the proceeds from unconsolidated investments' sale of assets), in which case it is reported as an investing activity. This enables the Company to look to the nature and source of the distribution received and classify it appropriately between operating and investing activities on the statement of cash flows based upon the source.

(i) Note receivable

In accordance with Accounting Standard Codification Topic 835 of the ASC ("ASC 835"), the interest income generating activities of the Company are related to Secured Loans. The Company uses the effective interest method to recognize interest income on its secured loans transactions. The Company maintains a security interest in 17 loans and records interest income over the terms of the secured loan receivable. Recognition of interest income is suspended, and the loan is placed on non-accrual status when management determines that collection of future interest income is not probable. The interest income accrual is resumed, and previously suspended interest income is recognized, when the loan becomes contractually current and/or collection doubts are resolved. Cash receipts on impaired loans are recorded first against the principal and then to any unrecognized interest income.

(j) Debt issuance costs

Debt issuance costs, net of accumulated amortization, are reported as a direct deduction from the face amount of the mortgage loan payable to which such costs relate. Amortization of debt issuance costs is reported as a component of interest expense and computed using an imputed interest rate on the related loan.

(k) Income Taxes

The Company has elected to be treated as a pass-through entity for income tax purposes and, as such, is not subject to income taxes. Rather, all items of taxable income, deductions and tax credits are passed through to and are reported by its owners on their respective income tax returns. The Company's federal tax status as a pass-through entity is based on its legal status as a limited partnership. Accordingly, the Company is not required to take any tax positions in order to qualify as a pass-through entity. The Company is required to file and does file tax returns with the Internal Revenue Service and other taxing authorities. Accordingly, these financial statements do not reflect a provision for income taxes and the Company has no other tax positions which must be considered for disclosure. Income tax returns filed by the Company are subject to examination by the Internal Revenue Service for a period of three years. While no income tax returns are currently being examined by the Internal Revenue Service, tax years since 2019 remain open.

(l) Revenue Recognition

The Company also earns asset management fees on equity method investments that are recognized as the fees are earned.

Interest income from notes receivable is recognized based on effective interest rate of loans.

(m) Expenses

Expenses include all costs incurred by the Company in connection with the management, operation, maintenance, and repair of the real estate projects and are expensed as incurred.

(n) Leases

The Company has operating leases for certain properties. The Company records a right of use asset and a corresponding lease liability representing the present value of future minimum lease payments in accordance with FASB ASC 842, Leases (Topic 842). Rent expense is recognized on a straight-line basis over the term of the lease.

(3) Real Estate and Improvements

The following table summarizes the Company's investment in consolidated real estate properties at December 31, 2023 and 2022:


	December 31,
	2023		2022
	(unaudited)
Land	$	14,487,903	$	34,098,048
Land improvements	14,159,693		13,560,314
Buildings and improvements	154,737,119		198,607,279
Furniture, fixtures and equipment	9,921,333		11,180,367
	193,306,048		257,446,008
Less accumulated depreciation and amortization	(89,076,473)		(103,220,237)
Real estate, net of accumulated depreciation and amortization	$	104,229,575	$	154,225,771

The Company generally sells interests of consolidated properties to tax credit investors. When a property is sold the Company issues a seller financed note to the buyer and records an offsetting liability resulting in the gain on sale being deferred. When the Company receives principal payments on the note receivables it recognizes a proportionate portion of the deferred gain. During the years ended December 31, 2023, 2022 and 2021, the Company recognized gain on sale of $1,071,126 (unaudited), $1,762,204 and $2,582,124 (unaudited), respectively.

The Company also sold three properties and a retail investment that were previously consolidated in excess of seller financed notes that resulted in gain on sale of real estate of $80,888,403 (unaudited) for the year ended December 31, 2023.

(4) Equity Method Investments

The Company has ownership interests in properties where they do not control but still has significant influence that it accounts for as equity method investments. The combined summarized balance sheets and statement of operations of the operating entities in which the Company holds an interest as of December 31, 2023 and 2022 are as follows:


	December 31,
	2023		2022
	(unaudited)
Cash and cash equivalents	$	12,229,653	$	14,936,928
Restricted cash	31,569,428		26,351,742
Real estate, net of depreciation and amortization	1,711,876,804		1,363,527,543
Other assets, net	21,030,560		12,749,131
Total assets	$	1,776,706,445	$	1,417,565,344

Accounts payable and accrued expenses	$	45,209,408	$	33,462,795
Development fee	96,580,784		104,229,375
Mortgage and note payables	1,307,757,652		985,989,274
Total liabilities	1,449,547,844		1,123,681,444

Total equity	327,158,601		293,883,900

Total liabilities and equity	$	1,776,706,445	$	1,417,565,344


	Year Ended December 31,
	2023		2022		2021
	(unaudited)				(unaudited)
Revenues	$	122,214,694	$	101,628,125	$	87,486,171
Operating expenses	(50,785,192)		(37,042,046)		(31,961,343)
Depreciation and amortization	(69,694,042)		(56,538,400)		(53,842,014)
Interest expense	(46,479,368)		(35,648,279)		(30,796,343)
Other expense	(10,511,320)		(8,121,489)		(6,795,050)
Net loss	$	(55,255,228)	$	(35,722,089)	$	(35,908,579)

The following investments and ownership interests were held by the Company as of December 31, 2023:


Investment	Ownership Interest		Investment	Ownership Interest
Vintage at Bouquet Canyon	0.009	%	The Meadows by Vintage	0.009	%
Agave Apartments	0.009	%	The Timbers by Vintage	0.009	%
Gateway by Vintage	0.009	%	The View by Vintage	0.009	%
Highland by Vintage	0.009	%	Vintage at Arlington	0.009	%
Pointe by Vintage	0.009	%	Vintage at Bellingham	0.009	%
Quilceda Creek	0.009	%	Vintage at Bremerton	0.009	%
Quinn by Vintage	0.009	%	Vintage at Holly Village	0.009	%
Ridgeview by Vintage Apartments	0.01	%	Vintage at Lakewood	0.009	%
Sky Mountain by Vintage	0.01	%	Vintage at Mill Creek	0.009	%
South Hill by Vintage	0.009	%	Vintage at Napa	0.009	%
Latitude 112 by Vintage	0.009	%	Heights by Vintage	0.009	%
Springview by Vintage	0.01	%	Vintage at Seven Hills	0.01	%
Station by Vintage	0.009	%	Vintage at Bennet Valley	0.009	%
Steamboat by Vintage	0.01	%	Vintage at Tacoma	0.009	%
The Farm by Vintage	0.009	%	Vintage at The Crossings	0.01	%
Vine by Vintage	0.009	%	Vintage at The Sanctuary	0.01	%
Vintage at Vancouver	0.009	%	Urban Center Apartments	0.009	%
Vintage at Citi Vista, LP	0.009	%	Vintage at Lockwood, LP	0.009	%
Vintage at Redfield, LP	0.01	%	Falls Creek by Vintage, LP	0.01	%
Village at 47th, LP	0.005	%

Bend Deconsolidation (unaudited)

During 2021, Vintage at Bend, LP sold their real estate assets to a newly formed entity, Vintage at Bend2, LP. Vintage at Bend, LP was consolidated into VHH balances in 2020 and deconsolidated in 2021. Prior to consolidation in 2021, the investment in Vintage at Bend was adjusted for allocation of income of $6,151,259 (unaudited), distributions received of $4,952,253 (unaudited) and ultimately a write off of investment balance of $2,545,484 (unaudited) for the year ended December 31, 2021. VHH provided a note receivable of $650,000 to the buyer of the real estate, Vintage at Bend 2, LP, an affiliate, which resulted in deferred gain on sale of the real estate.

(5) Notes receivable

The Company holds seller back note receivables on properties that the Company has sold to tax credit equity partners. When loans are issued they are non-cash with an offsetting amount to deferred revenue. Upon sale of the property with a seller loan, a portion of the gain is deferred. When the Company receives principal payments on notes receivable balances, it recognizes gain on sale of real estate. The notes receivable balance below includes principal balances of the notes as well as an accrued and unpaid interest and consists of the following as of December 31, 2023 and 2022:


			December 31,
Property	Interest Rate		2023		2022
			(unaudited)
Vintage at Bend 2, LP	2.43	%	$	682,370	$	650,000
Ridgeview by Vintage Apartments	5.00	%	10,257,860		9,769,390
Vintage at Bouquet Canyon	8.00	%	446		446
Vintage at Arlington	5.00	%	47,428		288,672
Vintage at Bellingham	5.00	%	659,430		628,029
The Meadows by Vintage	3.00	%	2,205,703		2,141,459
Vintage at Holly Village	6.00	%	1,209,644		1,461,424
Vintage at Bennet Valley	2.18	%	997,934		1,867,868
Vintage at Bremerton	5.00	%	2,392,071		2,278,163
Vintage at Napa	3.50	%	1,342,656		1,297,252
Vintage at Vancouver	3.50	%	2,095,525		2,024,663
Vintage at Seven Hills	2.50	%	5,239,507		3,590,551
Agave Apartments	3.75	%	1,544,068		1,488,258
Village at 47th(1)	4.34	%	2,600,000		2,600,000
Vintage at Lockwood	3.72	%	1,019,568		—
Vintage at Everett	5.00	%	14,662,000		—
Vizcaya by Vintage	7.35	%	7,211,592		—
Falls Creek by Vintage	4.02	%	8,224,679		—
Total			$	62,392,481	$	30,086,175

(1)Loan is not seller backed note relates to the development of this apartment building.

(6) Mortgage and Notes Payable

As of December 31, 2023, mortgage and notes payable on the accompanying consolidated balance sheets consist of the following :


Property	Total		Interest Rate		Maturity Date
	(unaudited)		(unaudited)		(unaudited)
Vintage at Mount Vernon	$	12,376,166	5.25	%	8/1/2029
Vintage at Burien	10,750,000		3.77	%	8/1/2024
Forest Creek	25,038,963		5.44	%	7/1/2033
Silver Creek	24,835,482		SOFR+2.75%		7/1/2026
Vintage at Chehalis	10,809,226		2.63	%	2/1/2028
Vintage at Richland	15,162,000		6.21	%	12/1/2033
Vintage at Sequim	5,124,501		SIFMA+1.84%		3/31/2038
Vintage at Silverdale	29,400,000		5.99	%	12/1/2030
Vintage at Spokane	19,662,407		2.61	%	2/1/2028
Elk Creek Apartments, LLC	6,572,086		6.24	%	7/1/2040
Falls Creek by Vintage	7,355,516		5.62	%	5/1/2056
Debt (excluding loan fees)	$	167,086,347
Unamortized loan fees	(1,847,043)
Total Debt	$	165,239,304

As of December 31, 2022, mortgage and notes payable on the accompanying consolidated balance sheets consist of the following:


Property	Total		Interest Rate		Maturity Date
Vintage at Mount Vernon	$	12,547,503	5.25	%	8/1/2029
Vintage at Burien	10,750,000		3.77	%	8/1/2024
Forest Creek	17,259,008		5.10	%	7/1/2023
Silver Creek	25,000,000		LIBOR+2.75%		7/1/2026
Vintage at Chehalis	11,073,832		2.63	%	2/1/2028
Vintage at Everett	33,006,384		LIBOR+2.75%		2/1/2026
Vintage at Richland	13,606,814		LIBOR+2.75%		2/1/2026
Vintage at Sequim	5,265,164		SIFMA+1.84%		3/31/2038
Vintage at Silverdale	22,682,201		3.63	%	10/1/2025
Vintage at Spokane	20,145,333		2.61	%	2/1/2028
Vizcaya	44,260,000		LIBOR+2.38%		11/1/2023
Debt (excluding loan fees)	$	215,596,239
Unamortized loan fees	(1,452,662)
Total Debt	$	214,143,577

Principal payments on the mortgage payable and notes payable are as follows as of December 31, 2023:


	Total
	(unaudited)
2024	$	12,683,410
2025	1,746,357
2026	25,884,529
2027	1,977,092
2028	19,099,118
Thereafter	105,695,841
Total	$	167,086,347

For amounts maturing in 2024, the Company plans to refinance through new loans or pay off existing loans through tax credit equity proceeds from the syndication of underlying properties.

As of December 31, 2023 and 2022, the Company had accrued interest payable on mortgage and note payables of $702,068 (unaudited) and $526,897.

(7) Leasing Activities

The Company has entered into various lease agreements. The average remaining lease term is 26.8 years and weighted average discount rate is 3.23% as of December 31, 2023.

The following table summarizes the fixed, future minimum rental payments, excluding variable costs, which are discounted to calculate the right of use asset and related lease liability for its operating leases in which the Company is the lessee:


	Minimum Rental Payments
	(unaudited)
2024	$	1,392,234
2025	1,392,234
2026	1,392,234
2027	1,392,234
2028	1,392,234
Thereafter	23,117,702
Total undiscounted rental payments	30,078,872
Less imputed interest	(9,015,052)
Total	$	21,063,820

(8) Related Party Transactions

Fee revenues

The Company in its capacity as general partner or managing member receives fees from tax credit investors in joint venture investments it has an interest in. The Company received fees of $4,546,624 (unaudited), $3,801,153 and $1,929,216 (unaudited) for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023 and 2022, the Company had a receivable of $2,867,085 (unaudited) and $2,733,305 included within the accounts receivable balance on the consolidated balance sheet relating to fee revenue

Interest income

The Company earns interest income associated with the seller notes that it receives from tax credit partners on the sale of consolidated real estate. See note 5 for more detail. During the years ended December 31, 2023, 2022 and 2021, the Company earned $1,188,760 (unaudited), $1,131,624 and $1,149,654 (unaudited).

Asset management fee

The partnership agreement for equity method investments provides for the payment of a cumulative asset management fee to an affiliate of the investor limited partner commencing in the year of the closing date, as defined.

The asset management fee, payable to Vintage Housing Asset Management, an affiliate, is comprised of regular asset management fee that is based off of a base fee of $1.4 million annual fee that is increased or decreased by $250/unit for every unit acquired or sold by the Company. In addition, KW receives an oversight fee that consists of $700,000 original fee that is increased or decreased by $125/unit for every unit acquired or sold by the Company.

During the years ended December 31, 2023, 2022 and 2021, the Company had asset management fees of $3,948,416 (unaudited), $3,424,488, and $3,180,759 (unaudited), respectively.

Due to affiliates

As of December 31, 2023 and 2022 the Company owes KW $5,243,067 (unaudited) and $2,340,000 and owes Sierra and its affiliates $7,384,238 (unaudited) and $19,159,927 as of December 31, 2023 and 2022, respectively. The amounts due to affiliates are due on demand and are non-interest bearing. At December 31, 2023, there is also a $4,006,135 receivable that is recorded to accounts receivable, net relating to advances to Station at Vintage and was repaid in January 2024.

(9) Commitments and Contingencies

Tax credits

The Company's low-income housing tax credits will be contingent on its ability to maintain compliance with applicable sections of Section 42. Failure to maintain compliance with occupant eligibility, and/or unit gross rent or to correct noncompliance within a specified time period could result in recapture of previously taken tax credits plus interest. In addition, such potential noncompliance may require an adjustment to the contributed capital by the investor limited partner.

Operating deficit guaranty

The guarantees made by the Company represent a concentration of credit risk. If performance on the guarantee becomes probable and the liability can be reasonably estimated, the Company would accrue a liability based on the facts and circumstances at that time. All of the guarantees made are with related party entities.

As of December 31, 2023, the Company has provided guarantees related to operating deficits ranging from $415,000 - $4.7 million (median $1.5 million) and are offset by reserves ranging from $192,000 - $1 million (median of $528k) and could expire anywhere from one year (if certain conditions are met) through the compliance period.

(10) Subsequent Events

In preparing these consolidated financial statements, the Companies have evaluated subsequent events and transactions for potential recognition or disclosure through March 29, 2024, the date these consolidated financial statements were available to be issued. The Company has exercised extension options on some of its mortgage and note payable balances subsequent to year end. Dates and maturities have in Note 6 have been updated to reflect these elections. No other events were identified requiring disclosure to the financial statements.

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2023


				Initial Cost				Gross Balance at December 31, 2023
Property	Location	Encumbrances		Land		Building & Improvements		Land		Buildings & Improvements		Total		Accumulated Depreciation		Depreciable life (years)	Date of Construction	Date Acquired
		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
Vintage at Mount Vernon	WA	$	12,376,166	$	1,157,164	$	11,656,399	$	2,613,898	$	12,631,514	$	15,245,412	$	(7,920,966)	40 years	2003	2018
Vintage at Burien	WA	10,750,000		—		9,887,575		574,722		10,473,132		11,047,854		(5,535,172)		40 years	2006	2019
Forest Creek	WA	25,038,963		684,298		19,698,291		3,031,658		20,792,352		23,824,010		(11,337,744)		40 years	2008	2018
Silver Creek	WA	24,835,482		1,824,564		19,495,360		2,734,532		20,623,305		23,357,837		(10,830,093)		40 years	2005	2018
Vintage at Chehalis	WA	10,809,226		1,050,000		11,792,956		2,557,686		12,720,551		15,278,237		(7,077,360)		40 years	2008	2021
Vintage at Richland	WA	15,162,000		1,037,760		11,529,496		1,708,583		12,271,674		13,980,257		(6,697,917)		40 years	2005	2021
Vintage at Sequim	WA	5,124,501		1,908,658		10,016,847		2,591,404		10,717,899		13,309,303		(5,790,613)		40 years	2006	2018
Vintage at Silverdale	WA	29,400,000		1,400,000		25,334,916		4,414,575		26,920,251		31,334,826		(14,839,986)		40 years	2007	2019
Vintage at Spokane	WA	19,662,407		1,510,000		23,105,062		3,050,290		24,763,562		27,813,852		(12,350,948)		40 years	2008	2021
Elk Creek Apartments, LLC	WA	6,572,086						2,459,755		12,744,212		15,203,967		(6,695,674)		40 years	2008	2023
Falls Creek	ID	7,355,516		—		—		—		—		—		—		40 years	2008	N/A
Folsom	CA	—		2,910,493		—		2,910,493		—		2,910,493		—		N/A	N/A	2022
Total		$	167,086,347	$	13,482,937	$	142,516,902	$	28,647,596	$	164,658,452	$	193,306,048	$	(89,076,473)