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Enclave Rating

The Enclave Rating

What is the Enclave Rating?

The Enclave Rating is a letter rating ranging from A to E that provides investors with the ability to easily compare investments across the Enclave platform. The Enclave rating measures the relative risk-adjusted return of an individual series of Notes. For example, a C rating would connote more risk than a B rating. Therefore, an investor would expect to receive a greater return on a C-rated project than a B-rated project as a consequence of the project’s relatively greater risk. It does not imply that one investment is inherently better, worse, or more suitable for an individual investor.

How is the Enclave Rating calculated?
An investment’s Enclave Rating corresponds to its numerical score in its Project Analysis. The Project Analysis is a quantitative method of measuring eight key risk criteria of a real estate investment. Each of the eight criteria is assessed and scored a corresponding number of points, resulting in a total numerical score ranging from 6 to 20. A Project Analysis score of 6-8 will result in an A1-A3 rating, 9-11 in a B1-B3 rating and so on.

     A                        B                      C                       D                         E       

———     —-—-     —         ———

A1   A2   A3             B1   B2   B3            C1   C2   C3            D1   D2   D3              E1   E2   E3

Capital Senior to Enclave Notes Points
0% 0
1-49% 1
50-59% 2
60-69% 3
70-79% 4
Capital Junior to Enclave Notes Points
40% or more 1
30-39% 2
20-29% 3
10-19% 4
Location Notes Points
Primary Core urban area in a top 10 United States MSA 1
Secondary Suburban or secondary urban market 2
Tertiary Rural or emerging real estate market 3
Occupancy Notes Points
Occupied 90%+ leased with stable cash-flow 1
Leasing Partially vacant with some cash-flow 2
Vacant No leases in place and zero cash flow 3
Development Phase Notes Points
Stabilized Management of an existing asset with no major improvements required 1
Value-Add Existing asset with rehab or redevelopment work required 2
Ground-Up Raw land with entitlements and/or new construction required 3
Sponsor’s Track Record Notes Points
$250 million or more developed 1
$50-249 million developed 2
Less than $50 million developed 3
Personal Guaranty Notes Points
Yes The sponsor’s personal assets are collateral for the investment -1
No No personal guaranty in place 0
Secured by the Property Notes Points
Yes The property is collateral for the investment -1
No No property guaranty in place 0
Please Note

The Enclave Rating is NOT a measure of the quality or suitability of the investment and is NOT meant to serve as a replacement for individual due diligence. Importantly, the Enclave Rating system is NOT similar or comparable to ratings from agencies such as Standard and Poor’s or Moody’s.

The Enclave due diligence process is rigorous. Less than 5% of the projects that we review are ultimately offered as investment opportunities on the platform. At Enclave, we pride ourselves on providing investment opportunities in high-quality commercial real estate projects with experienced sponsors.

Enclave ratings are for informational purposes only. Each rating is impersonal and not individualized for any specific investor’s financial situation and is not investment advice. These ratings are not intended to be, nor should you interpret them to be, a prediction of how a particular investment will actually perform. Each investor should always carefully consider investments in any security and be comfortable with his/her understanding of the investment. An investor may also consider consulting investment professionals.