Risk Management

Risk Philosophy

Algonquian Real Estate, LLC approaches risk management as a core operational function rather than a reactive process.

Risk is identified, evaluated, and mitigated prior to acquisition and monitored throughout ownership.

Our framework emphasizes:

• Capital preservation
• Conservative underwriting
• Liquidity protection
• Operational transparency
• Regulatory compliance

We prioritize durability over short-term yield enhancement.

Financial Risk Management

Financial risk is mitigated through:

• Minimum DSCR targets of 1.25x or greater
• Conservative loan-to-value parameters
• Reserve funding at acquisition
• Structured cash flow allocation hierarchy
• Preference for predictable debt structures

Liquidity is maintained as a primary defensive tool.

Interest Rate & Market Risk

Interest rate exposure is managed through:

• Fixed-rate financing when available
• Sensitivity modeling during underwriting
• Stress testing at elevated rate scenarios

Market exposure is mitigated by focusing on established Connecticut submarkets with demonstrated rental demand.

Risk Parameters

The Company does not pursue:

• Speculative rent growth assumptions
• Interest-only dependency structures
• High leverage capital stacking
• Heavy redevelopment exposure outside scope
• Short-term flipping strategies

Risk is managed before it is monetized.