Net Asset Value — NAV — is one of the most important figures in private real estate fund reporting. It is also one of the most misunderstood. In public markets, NAV is a daily calculation based on closing prices. In private real estate, NAV is a periodic appraisal-based estimate of what the underlying assets are worth minus what the fund owes.

Understanding NAV — how it is calculated, when it updates, and what it tells you about your investment — is foundational to evaluating any private real estate fund.

The Basic Calculation

NAV in a private real estate fund equals the fair market value of all assets held by the fund, minus all liabilities — including outstanding debt, accrued fees, and other obligations. Your ownership stake in the fund, expressed as a percentage of total units or shares, multiplied by the fund's NAV gives you your pro-rata interest in the portfolio's current value.

Example: A fund holds 10 properties with a combined appraised value of $60 million. The fund has $22 million in outstanding mortgage debt and $1 million in accrued liabilities. The NAV is $37 million. If you own 5% of the fund, your pro-rata NAV is $1.85 million.

How NAV Is Determined in Private Real Estate

Unlike public REITs, where market price provides a continuous valuation signal, private real estate funds do not trade on an exchange. NAV must be estimated using appraisals, internal models, or broker opinions of value.

Reputable fund managers obtain independent third-party appraisals on a scheduled basis — typically annually, though more frequent valuations are possible. The appraisal considers comparable sales, cap rate trends in the market, NOI levels at the property, lease quality and duration, and physical condition.

Between formal appraisals, some funds update NAV using internal models. This is an area where you want to understand the methodology. A fund that is too aggressive in its internal valuations — assuming cap rate compression that has not materialized, for example — may be reporting NAV figures that overstate the current value of the portfolio.

NAV vs. Cost Basis

When you invest in a private real estate fund, your initial investment creates a cost basis. If the fund's NAV per unit at the time of your investment is $10, and you invest $500,000, you receive 50,000 units with a $500,000 cost basis.

Over time, NAV per unit may increase as properties appreciate, as debt is paid down, or as the portfolio is repositioned. It may also decrease if market conditions deteriorate, if appraisals come in lower, or if the fund takes on liabilities. Tracking NAV per unit over time gives you the most direct view of whether the portfolio is creating or destroying value.

NAV and Liquidity

Private real estate funds are generally illiquid. If you want to exit a position, you are not selling at a publicly traded price — you are typically selling at a price negotiated relative to the most recent NAV per unit, subject to fund-level redemption policies and restrictions. Understanding the liquidity terms of any private fund before you invest is as important as understanding the NAV methodology.

NAV in the Context of Healthcare-Anchored Retail

For a fund like AGIF, NAV growth is driven by two primary mechanisms: property-level appreciation and debt paydown. Healthcare-anchored retail in growing Sun Belt markets has experienced cap rate stability and selective compression during a period when many other real estate categories saw cap rate expansion and value decline.

The durability of healthcare tenant credit quality and NNN lease structures supports appraisal values because appraisers are valuing a stream of contractual income — one that has historically been reliable and growing through annual escalators. A stabilized 10-year NNN lease with a creditworthy healthcare tenant appraises differently from a multi-tenant retail property with short-term gross leases and tenant turnover risk.

Questions to Ask About NAV

• How frequently are properties independently appraised, and by whom?• Does the fund use internal valuations between formal appraisals, and if so, what methodology?• Has the NAV per unit increased, decreased, or been stable since inception?• What are the redemption and liquidity terms if I want to exit based on current NAV?• How does the fund handle NAV adjustments when market conditions shift significantly?

AG Capital provides investors with transparent NAV reporting and regular portfolio updates. Contact our investor relations team for current fund metrics.

Visit ashtongraycapital.com to learn more or speak with our investor relations team.