Report of the IREM Membership Committee

Report of the IREM Audit and Investment Committee

To Executive Committee Conference Call 12:00 P.M. Chicago, IL September 22, 2014

Chair: Chris Mellen, CPM Vice Chair: Ben Forsyth, CPM Staff Liaison: Ken Paul

Background:

Motion: None

Other items:

Chris Raab of Morgan Stanley, IREM’s financial advisor was introduced. He reviewed the August 31, 2014 investment performance reports which were distributed to the committee.

Chris indicated that IREM’s existing portfolio as of August 31, 2014 has earned a positive gross return of 5.51 %; he also indicated that the 12 month return is a positive12.73%. Chris further stated that the Augusts’ portfolio is comprised of 56% equities, 39% fixed income, and 5% cash. Chris stated that the current portfolio is valued at $3,762,000 and is anticipated to decrease after today’s closing market.

The IREM Foundation has a positive gross year-to-date return as of August 31, 2014 of 3.92% with a balance of $739,812, which amounts to a year-to-date gain of $33,812. On a 12 month return the Foundation had a 12.63% gross return on investments - this excludes the $100,000 transfer of funds from the general checking account in May. The Foundation’s current portfolio value is $736,360, and consists of 62% equities, 31% fixed income, and 7% cash.

Chris explained how the federal open markets are affecting the US interest rates and compared our rates to other world economies such as; Japan and Germany. He also stated that the current interest rate on a 10 year U.S. Treasury bond is approximately 2.7% as compared to the German bond at 1%. He feels that this condition will allow our interest to fall. He further talked about the world situation and how it is affecting our portfolio, but stated to stay the course.

Chris indicated the benchmarks for both IREM and the foundation will increase slightly.

Benchmarks for IREM and the Foundation are addressed in the table below. Report of the IREM Audit and Investment Committee

IREM FOUNDATION High Point 8-31-2014 $3,806,000 $739,800 Benchmark-August 31, 2014 $3,235,000 N/A Benchmark-August 31, 2014 N/A $628,800 Current–September 22, 2014 $3,762,000 $736,360 Difference +$527,000 +$107,560 above Benchmark

Financial Philosophy* $4,068,652* N/A Cash & Investments 8/2014** $6,028,293** N/A Difference +$1,959,641 N/A

* Financial Philosophy reflective of August, 31, 2014 ** Rolling average is used to set balance

Motion passed to approve the August, 18th, 2014 minutes.

Committee members: Name-present/absent

Chris Mellen, CPM - Present Ben Forsyth, CPM - Excused Gregg Cichy, CPM –Present Jack Gallagher, CPM –Excused Pam Monroe, CPM – Absent Todd Taylor, CPM – Present Mike Lanning, CPM - Present Others: Chris Rabb of Morgan Stanley Ken Paul, CFO Don Ross, CPA Comptroller