Risk Disclosure

Last Updated: 5/12/2026 Effective Date: 5/12/2026

Important Notice to Prospective Investors

Investments offered through StellarVest and its affiliated sponsors within The Stellar Family of Companies (collectively, “StellarVest”) involve a high degree of risk and are suitable only for sophisticated, accredited investors who have the financial ability to bear the loss of their entire investment and who have no need for liquidity from the investment.

This Risk Disclosure summarizes certain material risks associated with investing in private real estate offerings sponsored by StellarVest. It is not exhaustive. Each investment offering has its own Private Placement Memorandum (PPM) that contains a more complete description of the risks specific to that offering. You should read the PPM in its entirety, consult with your own legal, tax, and financial advisors, and conduct your own due diligence before investing.

Securities offered by StellarVest have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws, and are offered in reliance on exemptions from registration. Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of any offering materials. Any representation to the contrary is a criminal offense.

1. Speculative and Illiquid Investments

Investments in private real estate offerings are speculative and involve a high degree of risk. There is no public trading market for interests in StellarVest-sponsored investments, no such market is expected to develop, and transfer of interests is restricted by federal and state securities laws and by the terms of the applicable operating agreement. Investors should expect to hold their investments for the entire intended hold period, which may extend five to ten years or longer, and should not invest funds they may need to access for liquidity.

2. Risk of Total Loss

Real estate investments are subject to a range of risks that could result in partial or total loss of invested capital. There is no guarantee that StellarVest, the property manager, the sponsor, or any other party will be able to execute the proposed business plan, achieve projected returns, or return any portion of an investor’s capital.

3. No Guarantee of Distributions or Returns

Target returns, projected internal rates of return (IRRs), equity multiples, cash-on-cash yields, hold periods, and other forward-looking financial metrics presented on this website or in marketing materials are estimates only. They are based on assumptions about future events that may not occur, including assumptions about rental rates, occupancy, operating expenses, capital expenditures, interest rates, exit cap rates, and sale prices. Actual results may differ materially and may be lower than projected. Distributions, if any, are not guaranteed and may be suspended or reduced at the sole discretion of the sponsor.

4. Past Performance

Past performance of investments sponsored or managed by StellarVest, its affiliates, or any third-party operator is not a guarantee or indicator of future results. Any reference to historical returns or track record (including IRRs or equity multiples achieved on prior properties) does not assure that future investments will achieve comparable results.

5. Multifamily-Specific Risks

Multifamily residential real estate investments are subject to risks particular to this asset class, including:

  • Local supply and demand imbalances, including new apartment supply that compresses rents or occupancy.
  • Tenant turnover and the costs of unit turns, marketing, leasing concessions, and renovations between residents.
  • Tenant defaults, evictions, rent delinquency, and increased bad debt during economic downturns.
  • Rent control, rent stabilization, eviction moratoria, source-of-income laws, and other state and local regulatory measures.
  • Property condition issues, deferred maintenance, casualty losses, and the cost of major capital expenditures.
  • Crime, neighborhood deterioration, school district changes, employer relocations, and other factors that can reduce demand or rents in specific submarkets.
  • Concentration risk where a property’s tenant base depends on a single employer, industry, or demographic segment.

6. Real Estate Market Risk

Real estate markets are cyclical and are affected by macroeconomic conditions, including employment, wage growth, population migration, interest rates, inflation, capital market conditions, and consumer confidence. Adverse changes in any of these conditions, or in the specific markets where StellarVest properties are located (including Texas, Kansas, and other markets), could materially reduce property values, rental income, and investor returns. Property values and rents can decline significantly and remain depressed for extended periods.

7. Financing and Leverage Risk

StellarVest-sponsored investments typically use mortgage debt or other financing. Leverage magnifies both gains and losses. Risks of leverage include:

  • Failure to refinance debt at maturity on favorable terms, or at all, which could force a distressed sale of the property.
  • Increases in floating interest rates on variable-rate debt that reduce cash flow or exceed projected debt service.
  • Loan covenants, cash management lockboxes, or cash flow sweeps that restrict distributions to investors.
  • Recourse, bad-act, or guaranty obligations triggering personal exposure for principals (though typically not investors).
  • Foreclosure or deed-in-lieu of foreclosure that could result in loss of the entire investment.

8. Construction, Development, and Renovation Risk

Certain investments, including new construction (such as ground-up multifamily developments) and value-add renovations, are subject to additional risks, including:

  • Cost overruns, supply chain disruptions, labor shortages, and rising materials or construction costs.
  • Construction delays and extended lease-up timelines that defer or reduce projected cash flow.
  • Failure to achieve projected rents, occupancy, or stabilized net operating income on schedule.
  • Permitting, zoning, entitlement, and other regulatory delays or denials.
  • General contractor, subcontractor, or other counterparty default.
  • Environmental conditions, soil conditions, weather events, and other site-specific risks discovered during construction.

9. Sponsor, Operator, and Key Person Risk

The success of each investment depends substantially on the experience, judgment, and continued involvement of the StellarVest leadership team and the operators of the property. The loss of one or more key persons could materially adversely affect the investment. Investors will not have control over day-to-day operations or major decisions, which are made by the sponsor and the operating partner under the terms of the applicable operating agreement.

10. Conflicts of Interest

StellarVest and its affiliates may have conflicts of interest in connection with sponsoring, managing, and operating investments, including:

  • Affiliated property management, construction management, asset management, and other service providers earning fees from the property.
  • Allocation of investment opportunities, time, and resources among multiple offerings and affiliated entities.
  • Co-investment by principals or affiliates on terms that may differ from those offered to outside investors.
  • Acquisition or disposition transactions between affiliated entities.

Material conflicts of interest applicable to a specific offering are described in the PPM for that offering. Investors should review those disclosures carefully.

11. Regulatory, Legal, and Tax Risk

Real estate investments are subject to extensive federal, state, and local regulation, including securities laws, fair housing laws, building codes, environmental regulations, landlord-tenant laws, zoning rules, and tax laws. Changes in any of these laws or regulations could increase operating costs, reduce returns, or impair the value of the investment. Tax treatment of real estate investments is complex and subject to change. Investors should not rely on any representations regarding tax consequences and should consult their own tax advisors.

12. Environmental Risk

Real properties may be subject to environmental contamination, hazardous substances, mold, asbestos, lead paint, underground storage tanks, or other environmental liabilities. Remediation costs and potential liability under environmental laws may be substantial and may not be fully covered by insurance or by environmental indemnities.

13. Insurance and Casualty Risk

Properties are subject to risks of fire, severe weather, flood, hail, tornado, hurricane, earthquake, vandalism, terrorism, and other casualty events. Insurance coverage may be insufficient to cover all losses, may exclude certain perils, or may become unavailable or prohibitively expensive in certain markets. Texas and other StellarVest markets have experienced rising property insurance costs and reduced coverage availability in recent years.

14. Tenant Concentration and Workforce Housing Risk

StellarVest properties primarily serve middle-income and workforce renters. Economic conditions affecting these demographics — including layoffs, wage stagnation, rising utility and grocery costs, and changes in government assistance programs — can materially affect rent collections, occupancy, and the financial performance of the property.

15. Reliance on Third Parties

StellarVest investments rely on third parties for many critical functions, including property management, leasing, construction, lenders, insurance providers, fund administrators, accountants, attorneys, and the investor portal provider (Juniper Square). Failure, breach, fraud, insolvency, or other underperformance by any of these third parties could materially adversely affect the investment.

16. Cybersecurity Risk

StellarVest and its service providers (including the Juniper Square investor portal) store and process personal and financial information electronically. Cybersecurity incidents, data breaches, ransomware attacks, phishing attempts, and other malicious activity could result in unauthorized access to investor information, disruption of the Services, or financial loss.

17. Subscription, Capital Call, and Default Risk

Where an offering involves committed capital and subsequent capital calls, an investor’s failure to fund a capital call when due may result in substantial penalties, dilution, forced sale of the defaulting investor’s interest, or other consequences described in the applicable operating agreement. Investors should ensure they have the financial capacity to meet their full capital commitment when made.

18. Valuation and Reporting Risk

Property valuations and net asset values reported to investors are based on estimates and assumptions and are not audited prices. Reported values may not reflect the price at which a property could actually be sold. Investor reporting and tax documents (including Schedule K-1s) may be delayed beyond ordinary deadlines, which could complicate an investor’s tax filings.

19. No Guarantee of Future Offerings

StellarVest makes no assurance that it will continue to sponsor future investment offerings, that any specific investment opportunity will be available, or that current or future offerings will be available to any particular investor.

20. Forward-Looking Statements

Statements on the Services and in marketing materials regarding projected returns, target IRRs, equity multiples, hold periods, market conditions, business plans, and other future events are forward-looking statements. Forward-looking statements are based on current assumptions and are subject to risks and uncertainties that may cause actual results to differ materially. Forward-looking statements speak only as of the date made, and StellarVest undertakes no obligation to update them.

21. Acknowledgment and Investor Suitability

By accessing the Services and considering an investment with StellarVest, you acknowledge and agree that:

  • You have read and understand this Risk Disclosure.
  • You understand that any investment you make may result in the loss of all or substantially all of your invested capital.
  • You are an Accredited Investor (and, where applicable, a Qualified Purchaser) and meet any other suitability requirements applicable to the relevant offering.
  • You have the financial sophistication to evaluate the merits and risks of investing, or you have engaged qualified advisors to do so on your behalf.
  • You will rely solely on the definitive offering documents (including the PPM, subscription agreement, and operating agreement) — and not on this website or any marketing materials — in making any investment decision.

Contact

If you have questions about this Risk Disclosure or any StellarVest investment opportunity, please contact us at investors@stellarvest.com.