What is the Fund's on-going asset management role once properties are acquired?
o Asset managers are involved with each MEPT project from the beginning: assisting with negotiating and structuring of development agreements, monitoring projects through construction, and overseeing the leasing and property management of each project to stabilization. Asset managers develop strategic plans for each property, visit each property quarterly, and are responsible for identifying initiatives and opportunities that will create value, and increase income, for each property. Asset managers hire third-party providers for property management, leasing and asset sales. With asset managers stewarding properties throughout their life cycle, MEPT's investors can be confident that the portfolio is managed with unparalleled consistency, continuity and thoroughness.

Kennedy asset managers perform a variety of functions to ensure quality control at the property level. Senior asset managers, in the role of team leaders, coordinate the implementation and integration of asset management functions into the acquisition and portfolio management process by:

• Reviewing, modifying and approving the property operating and capital budget, and preparing an Annual Business Plan for each asset every year;
• Overseeing and directly participating in the leasing process (both new and renewal), including, but not limited to, evaluation of lease proposals, analysis of tenant creditworthiness, and negotiation of leases;
• Managing the development process, along with Acquisition officers, for the creation of new core assets;
• Reviewing and monitoring the financial record keeping, reporting, and cash management for each property;
• Managing the implementation of all capital and tenant improvements;
• Directing the process of and selecting on-site property managers and property leasing teams;
• Overseeing the risk management program for each property;
• Directing the tax appeal process in order to minimize operating expenses;
• Providing direction and reviewing/negotiating relevant documentation for the hiring of various other service providers;
• Monitoring the user and capital markets vis-à-vis asset life cycle position to optimize timing of sale.

MEPT contracts with third-party property management firms to provide property management services. MEPT asset managers solicit bids from three or four property management firms in the market. Asset managers consider experience, cost, and personnel when making their final selection. Then, asset manager are responsible for overseeing the property management firms to ensure that the property is managed in line with MEPT objectives and policies.

How does the Fund utilize research?

Research plays a key role for MEPT and within Kennedy's organization and is fully integrated into the portfolio management process, including acquisition, disposition, and asset management functions. Kennedy's Research team, directed by Jim Valente, coordinates research activities, developing national and regional economic and real estate market forecasts, helping formulate the overall acquisition and portfolio management strategy, conducting special research projects, and publishing articles and reports for clients via trade and academic publications.

All potential acquisitions for the Fund are thoroughly analyzed by Kennedy's acquisition and asset management teams, incorporating in-depth economic and property market analysis provided by the research team. Kennedy's proprietary real estate forecasting models provide an outlook for the potential asset's market and submarket performance. The research team's analysis is incorporated into the Investment Brief for every investment opportunity presented to Kennedy's Investment Committee and, if approved, to NewTower's Investment Committee, Trust Real Estate Investment Committee (TREIC) which has the authority to approve all real estate acquisitions and dispositions of the Fund.

Once an asset is acquired, research provides the Portfolio Manager and the asset management team with updates and analysis of market and submarket data relative to the performance for each asset. Research contributes to the quarterly reports and annual business plans of each property, continually providing analysis of the market factors that influence investment performance. Research also works closely with Kennedy's portfolio and asset management teams to provide regular evaluations of and updates to the Fund's portfolio strategy.

Methods
In addition to evaluating the impact of short- and medium-term local market trends on investment performance, Kennedy's Research Team incorporates the potential impact of important macro economic and capital markets trends into the portfolio strategy and risk management process. Part of this top-down analysis includes evaluating the potential impact of far-reaching long-term trends such as changing demographics, the increasing importance of internet commerce, evolving trade patterns, and the growing impact that globalization is having on the domestic location choices of firms. Indeed, many of these trends have had specific influences on the Fund's apartment, retail, and industrial strategies, as well as the identification of and evolving targeting of our primary investment markets.

The analysis by the Research Team typically includes:

• producing five-year proprietary forecasts of office, industrial, apartment and retail fundamentals (absorption, construction vacancy and rent growth) for primary U.S. markets,
• constructing a forecast with base-line output from established econometric models, and updated with local market knowledge from Kennedy acquisitions and asset management teams, and
• maintaining a multi-factor model for targeting markets for each of the primary property types; office, industrial, retail and apartments that takes into account both expected performance and risk.

The research process can help mitigate portfolio risk by screening markets for both liquidity and structural imbalances. Markets with a more diverse demand for real estate and a longer history of institutional ownership can reduce execution risk and Kennedy's research process helps identify these markets by utilizing a process that weights each market's size as measured by population, employment, and duration and depth of institutional ownership. Structural imbalances are discovered by identifying both positive and negative deviations from historical averages in terms of capitalization rates and vacancy rates, as these have the greatest impact on performance.

Research Sources
Kennedy's Research Team incorporates both top-down and bottom-up approaches to monitoring markets and developing an outlook for the economy, capital markets and real estate markets. Kennedy subscribes on a regular or periodic basis to a variety of on-line databases, journals, newspapers and other resources, including NCREIF, TortoWheaton, CoStar Data, Economy.com, REIS.com, Strategic Economic Decisions, Conerly Economic Consulting Services, and scores of brokerage and other reports in the real estate industry. An extensive library of these and other resources is maintained, used frequently and available to all staff. A file for each market and sub-market by property type is kept up-to-date, in hardcopy and digital forms.

Kennedy's Research team publishes periodic white papers for clients and audiences in the industry. Kennedy's research and other personnel are also active members of numerous organizations including NCREIF, NAIOP, NAREIM, ULI, PREA, National Association of Business Economists, Regional Science Association, and other local and regional economic development and real estate organizations. Bi-annually the research team publishes an economic and real estate markets outlook report.

Because of Kennedy's longstanding involvement in 24 markets nationwide, the Fund has access to local and often proprietary sources of market and related information. While MEPT refers to national sources of real estate data, the Fund's greatest and most reliable source of information stems from day-to-day involvement in each MEPT market. As a result, MEPT never relies solely on any single real estate source.

How is the Fund governed?
MEPT uses a Policy Board to perform oversight and risk analysis for the Fund. Principals of NewTower Trust Company, Kennedy Associates Real Estate Counsel, LP, and Landon Butler & Company, LP® serve together on MEPT's Policy Board. The Policy Board determines MEPT's strategic direction, including investment policy and portfolio strategy. The Policy Board meets at least twice a year to review the performance and management of the Fund. The current members of the Policy Board are Landon Butler (LBC), Patrick Mayberry (NewTower), John Parket (Kennedy), and Gary Whitelaw (Bentall).