KRYSTAL PIERCE Chief Relationship Officer & General Counsel
It is exciting to highlight in this season’s newsletter our unique value‑add improvement approach. In a market where capital efficiency and operational discipline matter more than ever, our strategy continues to unlock meaningful gains—both from the students’ point of view, as we deliver better quality and modern amenities to enhance their living experience, and from the investors’ perspective, through substantial improvements in overall asset quality.
Value‑add renovations position us to meet growing student expectations while capturing measurable improvements in revenue performance. By revitalizing interior finishes, modernizing amenities, and addressing deferred maintenance, we’re able to reposition well‑located properties to compete more effectively in the market. These targeted upgrades not only elevate the resident experience but also support stronger occupancy trends, improved rent growth, and healthier long‑term asset durability.
Our disciplined approach—focused on upgrading where it counts and executing with strategic timing—has allowed us to create value without overextending capital or taking on unnecessary risk. We remain committed to identifying opportunities where thoughtful improvements translate into meaningful returns and where our execution continues to differentiate us. The results highlighted throughout this edition speak for themselves.
Thank you for your ongoing trust and partnership through another season.
OPERATIONS UPDATE
CASEY PETERSEN Chief Operating Officer
Now that fall and the holidays are behind us, we're fully engaged in the new leasing season. Although some lease renewals may still come through this spring, our main attention has shifted to signing new leases. Our marketing team is working hard, using multi pronged strategies to attract high quality leads and convert them into leases at the lowest cost possible. While the business model sounds simple, carrying it out successfully is actually quite complex. I'm happy to share that leasing activity across our properties remains very strong. As of January 31, over 55% of beds in our portfolio were pre leased for fall 2026—more than 12% ahead of last year and nearly 10% above industry benchmarks. We're also seeing real improvement in markets that were difficult in previous years. Of course, we still have some properties and locations that will need extra effort over the summer, but I’m very optimistic about what lies ahead and extremely proud of our on site, regional, and corporate teams. This time of year, every hour counts during leasing season, and our teams continue to rise to the challenge. With these results, I believe we're set up for a strong lease up this fall and will be well positioned to push rental rates during the next leasing season.
LETTER FROM THE PRESIDENT
BRANDON SMITH President & CEO
Since the focal point of this newsletter is Tailwind Group’s value‑add approach, I want to look at it through a slightly different lens. Krystal’s remarks appropriately highlight the physical transformation of our student housing assets—and that work speaks for itself. We are proud of what has been accomplished and believe Tailwind helped pioneer a new standard for thoughtful, well‑executed value‑add renovations in our space.
However, there is a second, equally important component of value‑add that is much harder to quantify—yet just as critical to our success. That is the value we create through people, leadership, and on‑site operations.
This management‑driven value‑add approach is rooted in experience, tenacity, and a willingness to roll up our sleeves. It is a mindset that prioritizes having the right on‑site leadership in place, deploying best‑in‑class operational strategies, and maintaining the ability to pivot more quickly than our competitors when conditions require it. In an extremely dynamic operating environment, agility is a true competitive advantage.
To ensure we can execute in our management value add, we invest heavily in our team members. Beyond technical and on‑the‑job training, we emphasize mission‑oriented and leadership development that is embedded directly into our everyday culture. Simply put, we believe that if we take care of our team members, they will take care of our residents. If we take care of our residents, they will love where they live. If they love where they live, the results follow—stronger rent growth, higher renewal rates, lower operating expenses, and reduced physical wear and tear on our communities. Ultimately, this approach enhances and protects the underlying real estate investment.
This philosophy is especially important in the student housing sector, where the physical product can be difficult to differentiate. While our value‑add strategies significantly enhance existing conditions, we are still competing in markets where many properties offer similar amenities—fitness centers, study lounges, pools, spas, and common spaces. Our goal is for customer service and the resident experience to be a defining catalyst of our performance and long‑term value creation.
Regardless of how large our portfolio grows, our passion will always be rooted in our team members, the real estate itself, and the disciplined execution of our value‑add business plans. That commitment—to our people, our assets, and our investors—remains the foundation of how we build and operate Tailwind Group.
UNIQUE APPROACH TO VALUE-ADD RENOVATION
Over the past seven years, Tailwind Group has created and refined a unique approach to large scale, value add renovation opportunities in the student housing space. Most operators in the industry take a slow and staggered approach to renovations over a 3–5 year period to maintain stable occupancies and slowly garner the rent growth that the renovation provides. While this can be effective and avoids long stretches of lower occupancy, Tailwind Group has taken a contrarian approach.
Tailwind Group seeks out student housing assets with occupancies between 50 75% and negotiates a purchase price at a steep discount to replacement cost. Upon acquisition, work begins immediately to relocate residents and completely vacate 3 4 buildings to begin full scale renovations. Once a building’s renovation is complete, residents are relocated from non renovated buildings to an upgraded unit. This process is repeated over the course of 8 12 months until all buildings’ renovations are complete. Simultaneously, our leasing team begins to advertise and tour the newly renovated units while driving our flagship leasing and marketing strategies that target aggressive, yet attainable market rate increases of $50 100 per bed. Depending on age of property and need, Tailwind Group will concurrently renovate the clubhouse, leasing office, and amenity package capitalizing on additional rent increases of $25 50 per bed.
By the following academic year, Tailwind Group has completely turned around the asset, offering newly renovated units at $100 150 premiums compared to the year prior with occupancies at 90%+. Once stabilized, Tailwind Group recapitalizes the asset via refinance to return capital to investors and stabilize marketed investor returns.
TAILWIND SPOTLIGHT
QUARTERS STARKVILLE
Maroon Nation is getting an upgrade. Newly branded Quarters Starkville, this purpose driven design, abounding with bulldawg flair, will set a new standard for future off campus Mississippi State University living.
LANDING AT FAYETTEVILLE
Supporting students at nearby University of Arkansas, this 2,400 sq. ft. clubhouse has transformed from dated to dynamic, delivering bold energy and expressive moments. The strategic new design blurs the line between form and function, embraces Razorback Nation, and offers students a place to gather, work, and recharge in style; while increasing attraction, enhancing retention, and ultimately boosting ROI.
QUARTERS MANHATTAN
From ho hum to homerun. Student life at Kansas State just got an upgrade. The newly reimagined 4,700 sq ft clubhouse in the heart of Manhattan, Kansas, redefines what student housing can be. Rooted in local character and Wildcat pride, the design leans into regional vernacular, iconic school elements, and a vibrant, youthful spirit, reinvigorating interest and elevating lease up and occupancy rates.
LANDING AT LAWRENCE
This transformative student housing renovation near University of Kansas delivers vibrant personality across a 4,500 sq ft clubhouse. Jayhawk pride is in full display; thoughtfully incorporating signature school colors of KU Blue, Crimson Red and Jayhawk Yellow while impact driven interior architectural detailing breathes new life into this once dated space.
CURRENT EVENTS
The Outpost is a 195 unit / 543 bed garden style student housing community built in 2006, located just 0.2 miles southeast of Baylor University, a Tier 1 flagship university with a concentrated student population. The property offers a mix of two, three, and four bedroom floor plans with ample parking and amenity space. Its proximity to campus provides students convenient access to classes, events, and university resources.
The property offers clear upside through Tailwind Group’s hands on, resident focused management and targeted capital improvements. The plan includes amenity upgrades, rent repositioning, and occupancy restabilization, while keeping rents attractively positioned relative to the local market. INVESTMENT OPPORTUNITY - FILLED
LOW-COST BASIS ENTRY POINT
The entry of $40,500/bed is well below the average transaction cost per bed of $64,000/bed according to the 2024 Berkadia U.S. Student Housing Market Report. Also, it is 43% less than a comparable product that transacted at $72k/bed in 2022.
TIER 1 INSTITUTION
Baylor University is a tier 1, power 4 flagship university part of the Big 12 conference with 18,165 full time students.
VALUE-ADD OPPORTUNITY
2006 vintage asset, with capital improvement opportunities throughout the common areas & exteriors.
LIMITED NEW SUPPLY & STRONG ENROLLMENT OUTLOOK
30% pent up demand with minimal incoming supply. The university of Baylor has also achieved record breaking applications for multiple years in a row.
8% Annual Return (paid on a monthly basis)
+6% Annual Accrued Return (payable upon sale)
+25% Profit Split (payable upon sale)
14%-18% Targeted Annualized ROI
1.3x-1.7x Targeted Equity Multiple
*Targeted ROl and Equity Multiple are based on the best available information and assume a Class B investment with 25% net proceeds upon property sale. Past performance does not guarantee future results, and targeted return rates are not guaranteed. All investments carry risk, including thepotential loss of principal.
