CEO UPDATE - MOVE TO WHERE THE PUCK IS MOVING...

After living through several economic cycles, including the GFC in 2008 and the COVID-19 pandemic in 2020, the impact of the current cycle seems more uncertain and uncomfortable for all investors as we witness the world rebalancing itself. I am sure you will agree.

Our success is largely determined by the movement of interest rates, which has a direct correlation to the profitability of commercial real estate and its ability to generate a consistent return. The market has anticipated several drops in lending rates this year. Still, against that backdrop, the US Treasury's 10-year yield has continued to swing continuously between 4,25% and 4,65%, stubbornly resisting the move below 4% given the concerns over global tariffs and the impact it may have on inflation going forward.

In times like these, we constantly evaluate our strategy to be agile enough to go “where the puck is moving” and take advantage of this changing environment.

A resilient portfolio of uncorrelated private hard assets still provides the most downside protection to the volatility of the stock markets. This is where commercial real estate shines if acquired at times like these, where Cap rates are generally high (buildings are cheaper because of the cost of debt). Our Medical sector has been particularly resilient, and several large Healthcare REITS using cash reserves are targeting high-quality Medical Office buildings at prices that we cannot match with the current cost of Debt. This is so prevalent that we have decided to sell certain AccretivPLUS Healthcare portfolio assets to capitalise on this. These funds will be used to reduce debt and acquire new buildings with more upside.

But “where is the Puck moving?” The current US government administration is moving aggressively to onshore manufacturing on a mass scale, with unprecedented tariffs on imported goods. While we can’t predict what the world will look like as this gains momentum, we are seeing demand outstrip supply in the industrial market, BUT with opportunities to buy at prices that can deliver the returns we need to satisfy you, our investors. Fundamental value in a sector that will enjoy strong tailwinds.

So we are excited to launch AccretivTWO Industrial Portfolio Limited (for MERJ investors) within the next few weeks. Please indicate your interest in the poll below.

VOTE IN POLL

Remember that by popular demand, we created “Accretiv TI Note Limited,” which is also still open on our platform, offering a 9% interest accruing with a one-year lock-in.

Negative Press coverage

I would also like to take this opportunity to highlight recent media coverage that may have come to your attention. While we respect the role of the media, we need to respond to the blatantly inaccurate and misleading claims made in two separate publications.

Let me begin by reaffirming that we’ve made significant progress—progress we are incredibly proud of. Despite the headwinds we’ve faced, including high interest rates and inflationary pressures that increased our operating costs at the property level, we successfully consolidated 27 separately owned buildings in the USA into a single fund last year. This was achieved with near-unanimous investor consent and has resulted in the creation of one holding entity. The total fund value in the USA is approximately $200 million, with over $80 million in investor equity. We have consistently delivered annualized returns of 5% to 7% after U.S. taxes and are well-positioned to fulfill our mandate of preparing the portfolio for exit by 2028. Perhaps before if the market turns.

It is imperative to note that the negative media coverage originates from investors involved in legacy assets, which are in no way related to the current active AccretivPLUS portfolio. The activist investor has not invested a single dollar with OrbVest since our inception, certainly not in our performing portfolio.

We have communicated extensively about the unfortunate failure and subsequent Chapter 11 bankruptcy of Honan and the associated assets. Against all odds, we have already successfully acquired two of the affected projects through new partnerships, with the aim of returning capital to previous investors.

We do not wish to minimize the personal impact these prior investments have had on investors in those deals, nor the toll it has taken on the OrbVest team, who have and continue to work tirelessly to recover value where possible. This has been consistently disclosed in our updates and newsletters over the past two years.

One of the buildings targeted in the publications is the WM Medical 8 building, listed on 21 August 2017, and located in Austin, Texas. This building was acquired before the formation of OrbVest. The investors in this asset have received regular communication and updates regarding the performance of the building and the inability to exit the investment. With the building now over 90% occupied, the strategy to sell it is strongly supported by the majority of the investors, with an exit planned to conclude before the end of 2025.

Media Coverage and Response

Upon receiving approximately 15 questions from the journalists, we submitted a comprehensive 13-page response, addressing what we are permitted to share given regulatory and privacy restrictions surrounding investors within each deal. Unfortunately, this transparency was conveniently ignored by the journalists in the first pass, but one of the publications did publish our full response after realizing their article was inaccurate.

Unfortunately, the disgruntled investors continue to discredit OrbVest across various media platforms. In our view, our responses were not given fair or proper consideration, and the articles were crafted in a malicious and biased manner.

We continue to address the media directly to correct the falsehoods circulated, while also exploring all legal options, given the blatant disregard for the truth and the use of misleading, sensationalist headlines.

Lastly, we subsequently closed another quarter, distributing over $1 million in dividends to our global investors. Individual asset reports and the Q1 Quarterly Report for the AccretivPLUS Healthcare Portfolio Limited were distributed as usual, providing full operational and financial updates on your relevant investments.

We value our relationship with you and remain committed to resolving outstanding issues with legacy or buildings outside of the portfolio. We look forward to some quick wins over the coming two quarters.