Hi Reader,

Wellings Capital announces the sale of AAA Platte Self-Storage, a 26.5-acre property in Colorado Springs, CO that originally had 878 storage units/parking spaces, a 35,000 sq. ft. retail box, and a 90,000 sq. ft. of vacant industrial/warehouse space.

It was acquired in November 2019 for $10.95 million and sold for $17.3 million in August 2023. The retail space was sold in 2021. The sale of the retail space brought the basis to approximately $9 million, so the August 2023 sale generated approximately $7.35 million in net sale proceeds.*

At acquisition, the property was projected to generate a property-level internal rate of return ("IRR") of approximately 32% and a property-level multiple on invested capital ("MOIC") of 2.2x over a four-year hold period.

It ultimately generated a property-level IRR of 40% and a property-level MOIC of 2.6x in under four years.*

Before it sold, both Wellings Income Fund I and Wellings Income Fund II owned an interest in this property. As of today, Wellings Income Fund I owns an interest in 76 properties/portfolios, and Wellings Income Fund II owns an interest in 68 properties/portfolios.*

To date, 12 properties in Wellings Income Fund I and II have gone full cycle with a median IRR of 57% and a median MOIC of 2.3x. The median hold time for these 12 properties was 1.75 years.*

For reference, the worst deal of those 12 resulted in a -9% IRR and a 0.9x MOIC over 1.2 years. This deal did not impact distributions to investors in any way. The best deal of those 12 resulted in a 347% IRR and a 3.4x MOIC over 0.8 years.*

The operator's approach to maximizing property value involved a comprehensive strategy including:

• Curb Appeal Transformation: Fresh paint to the entire exterior of the building and upgraded signage due to deferred maintenance from previous ownership.
• Optimized Parking: Paved, striped, and reconfigured outdoor parking layout to align with market demand. This allowed the operator to increase rents to market and enhance the overall tenant experience.
• Lease Success: Entered a 5-year lease agreement with a national tenant for part of the industrial warehouse space.
• Refinancing: Enhanced cash flow to investors by refinancing in 2021 from an $8.6 million loan with a 6.35% interest rate to a $9.5 million loan with a 3.32% interest rate. The refinance reduced debt service by approximately $20,000/month and locked in 10 years of interest-only debt service.
• Subdivided and Sold Retail Space: Separated the 35,000 sq. ft. retail space from the storage and industrial property and sold it off in 2021 for $1.9 million.

Wellings Income Fund I and II investors can log into the portal for more information on the distribution for this sale, which should be hitting bank accounts next week.

We are pleased with the disposition of this property, especially considering the current economic environment.

If you have any questions, just reply to this email.

Cheers,

Paul Moore

Managing Partner | Wellings Capital | www.wellingscapital.com​

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* Prospective investors are welcome to reach out to us via email for a full list of holdings and performance results for any Wellings Capital fund. The realized investments property-level, or gross returns, presented above represents Gross MOIC and Gross IRR performance metrics. Past performance is not indicative of future results. There can be no assurance that any fund or project will achieve comparable results, or that any target or projected returns will be met. Gross Multiple on Invested Capital (“Gross MOIC”) is calculated as: (Realized Proceeds + Current Fair Value)/(Total Invested). Gross MOIC is before deductions for carried interest, management fees, taxes, and fund expenses. IRR is calculated based on the capital inflows and outflows. Gross IRR is before deductions for carried interest, management fees, taxes, and fund expenses.

DISCLAIMER: The information contained in this email communication is for information purposes, does not constitute a recommendation, and should not be regarded as an offer to sell or a solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be in violation of any local laws. All investing involves the risk of loss, including a loss of principal. Please read the Private Placement Memorandum before making any investment decisions. We do not provide tax, accounting, or legal advice, and all investors are advised to consult with their tax, accounting, or legal advisers before investing. Information and any opinions contained in this email communication have been obtained from sources that we consider reliable, but we do not represent that such information and opinions are accurate or complete, and thus should not be relied upon as such.