BRASS ENTERPRISES INC .

INVESTMENT REPORT
FIRST QUARTER OF 2014
Thankfully, the strengthening of the US economy has had a
positive effect on our US real estate holdings. In Q1-2014, we
focused on improving the performance of our US residential
portfolio, and at the same time scouring the marketplace for
more quality properties.
GROWING DEMAND PUSHES RENTS
HIGHER
We have been finding across our U.S. portfolio that rents
are climbing and vacancies are dropping. The Wall Street
Journal of April 1, 2014 points out that average rental rates
across 79 U.S. metro areas increased 0.6% during the first
quarter. Although that is slightly slower than the 0.8% rise in
last years fourth quarter, rents were up a hefty 3.2% from
a year earlier and have risen 13% since rents began their
upward climb in 2009. As vacancy levels fall, rents appear to
be poised for further growth, according to REIS (a real estate
research firm).
There are several factors contributing to the increase of
rents and decreasing vacancy rates:
1) Rising demand for apartments: The steady rise of
employment enables more and more young people to afford
households of their own.
2) Expensive home ownership: The cost of home
ownership has increased dramatically during the past year,
as prices have rebounded and interest rates have risen from
record lows.
These are good times for U.S. landlords. With demand
for apartments surging, rents are projected to rise for a fifth
straight year. Demand for rental housing has grown, as the
U.S. economy has strengthened since the end of the Great
Recession nearly five years ago. Overall, higher demand and
rising rents will produce more income for owners.
TEXAS ECONOMY: STRONG, GETTING
STRONGER
Texas and NY are now the only two states to have restored
all of the jobs lost since the onset of the recession in 2007.
The Texas economy has recovered much more robustly
and has moved on into a period of substantial expansion.
Unemployment in Texas is down to 5.7%, about a point lower
than the national average. Between 2007 and 2011, Texas lost
400k jobs, but has since added more than a million.
AUSTIN BOOM
The boom in the Austin region employment slowed slightly
in 2013, but only because there were fewer workers left to
employ (REIS). The unemployment rate in Austin has dropped
Executive Summary: Q1-2014
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OASISOCCUPANCY
Apartments in high demand: Overall, these are good times
for U.S. landlords. With demand for apartments surging, rents are
projected to rise for a fifth straight year.
Riding the Faster Horse: For the fourth year in a row, Austin has
appeared at the top of Forbes list of the countrys fastest growing cities.
to a low 4.5%
The availability of jobs in Metro Austin has not gone
unnoticed in the rest of the county. For the fourth year
in a row, Austin has landed at the top of Forbes list of the
countrys fastest growing cities. Forbes noted that Austin had
a 2.5% estimated population growth in 2013, the highest of
all geographic regions in the country. The report also points to
Austins economy, which grew 5.9% last year.
According to Moodys Economy.com, the population is
forecast to carry on growing by about 50k people (about
2.6%) per year through 2018.
The Austin apartment market benefited from low and stable
vacancy and strong rent gains in 2013. As new apartment units
come into the market in 2014, the vacancy rate is expected
to increase to 4.9% by year-end 2014. REIS predicts strong
demand to absorb the new units coming into the market in
2014, although the new units will obviously temper rental
increases to some extent.
FORT LAUDERDALE
There have been advances in employment in Fort
Lauderdale. Nevertheless, the recession was so severe that the
recent gains still leave local employment greatly in arrears of
prerecession levels (REIS Report).
Further gains are predicted as the recovery continues. The
recent strength evinced by the countrys major economic
pillars (Tourism, Trade, Construction) bode well for a
continuing expansion and recovery of the regions economy.
The apartment market remains tight, resulting in low
vacancy rates and strong rental growth. Vacancy is projected
to continue to diminish, expected to end the year below 4%.
An average rent growth of about 3% is expected for the year.
LANDMARK PURCHASE
Brass Enterprises is pleased to announce the completed
purchase of another 293 suites in Austin, Texas.
In the fall of 2013, Brass Enterprises viewed the Landmark
project. The asking price was $136k/door too steep, we
felt, but worth negotiating over. In December, the deal, having
been under contract at over $130/door, failed to close and
came back to us at our original offer of $120k/door.
During an intensive due diligence period, we negotiated a
further reduction in price to just over $117k/door. Closing
was originally set for and was executed on May 9, 2014. We
are excited to now have 293 more suites to add to our existing
portfolio in Austin, Texas 583 suites, purchased July 2013.
Since the Landmark property is a brand new build, our
current focus is on occupancy, filling the building to capacity.
The second tier goal is to push rents higher upon renewals.
We worked hard with our management team to ensure a
successful transition upon closing. We are very pleased with
the progress so far.
Fort Lauderdale: Further gains are predicted as the recovery continues.
Landmark Closing: 293 more suites to add
to our existing portfolio in Austin, Texas.
NEXT AREA OF FOCUS
Having expanded our portfolios in Fort Lauderdale and
Austin, we have set our sights on developing portfolios in
other areas, at different stages in the recovery cycle. The graph
below illustrates the recovery cycle in the U.S.:
Here it is apparent that each market is at a different place in
its recovery from the Great Recession, and we have different
investment criteria when buying in different parts of the
recovery cycle.
There are four different markets we are particularly
interested in and have been busy, over the last several months,
negotiating on various properties. Presently we have nothing
under contract but hope that one of our offers will win the
bids in the near future.
POTENTIAL SALES IN THE FUTURE
As the U.S. market continues to strengthen, we are starting
to consider the possibility of selling assets where we have
already added sufficient value. The first property we will likely
list for sale is Camelot. We are in the midst of negotiating the
agreement with the agent. Even more exciting, however, is
the possibility of bifurcating Parrots Landing, listing Phase II
of the property for sale and retaining Phase I.
When we purchased Parrots Landing, our intent was to
eventually hive off half the property, and we went to great
lengths to bifurcate the mortgage and all the title information
on the property. In so doing, we left open the possibility of
one day severing and selling half the property.
We have now worked on details with the bank to make sure
this is still a viable possibility. It appears that all is going as
planned, and we could be looking to list Phase II of the Parrots
Landing property by the end of the summer. That would
result in a nice cash payout on our investment and also leave
a little cash in the system to further reposition Phase I. Given
the additional resources, we can revitalize the community by
putting up a proper gate and gating the community. We hope
to have more updates in the coming reports.
INVESTOR MEETINGS
One major focus of our company is to meet with individual
and groups of investors to monitor their interests and
investment criteria. We look forward to meeting with you to
discuss your investment needs. Please be in touch.
Parrots Bifurcation: Possibility of a sizable cash payout to investors.
14
IRR

Viewpoint 2014 Apartments IRR

Viewpoint 2014
2013 Integra Realty Resources, Inc.
Apartments
Apartment Cycle Chart (Fig.15)
The apartment sector
continued to lead the
commercial real estate recovery
in 2013. Property fundamentals
continued to improve
nationally, while capitalization
rates continued to compress
across most of the country.
While national apartment cap
rates are exhibiting historical
lows, there are signs that
cap rates may be reaching a
oor and beginning to reverse
course, as IRR actually observed
a slight softening of cap rates in the South Region in
2013. Overall, the apartment markets performance has
continued to lead the national real estate recovery, and
the vast majority of IRR markets report moderate to heavy
development activity in the sector as a result.
In addition to development activity, apartment transaction
volumes were exceptionally high in 2013, and there was
a notable uptick in the average sales price per unit over
2012 and the 10-year historical average price. These
trends were especially true in Los Angeles, New York City,
and Washington, DC, where three of the nations largest
apartment markets were also some of its most active in
2013, with each of these markets nearly doubling their
respective average 10-year sale volumes. Of the 25 most
active apartment markets, only South Florida and Las Vegas
trailed their 10-year average volumes.
Recession Hypersupply Expansion
Increasing Vacancy Rates
Moderate/Low New Construction
Low Absorption
Low/Negative Employment Growth
Low/Neg Rental Rate Growth
Increasing Vacancy Rates
Moderate/High New Construction
Low/Negative Absorption
Moderate/Low Employment Growth
Med/Low Rental Rate Growth
Decreasing Vacancy Rates
Moderate/High New Construction
High Absorption
Moderate/High Employment Growth
Med/High Rental Rate Growth
Decreasing Vacancy Rates
Low New Construction
Moderate Absorption
Low/Moderate Employment Growth
Neg/Low Rental Rate Growth
Recovery
1
2
3
1
1
1
3
2
2
3
3
2
1st stage within phase 1
3rd stage within phase 3
2nd stage within phase 2
Greenville, SC
Providence, RI
Greensboro, NC
Jackson, MS
Las Vegas, NV
Cleveland, OH
Dayton, OH
Orange County, CA
San Diego, CA
Boise, ID
Cincinnati, OH
Columbia, SC
Detroit, MI
Los Angeles, CA
Memphis, TN
Naples, FL
Nashville, TN
Oakland, CA
Raleigh, NC
Sacramento, CA
Sarasota, FL
Syracuse, NY
Tulsa, OK
Austin, TX
Boston, MA
Charlotte, NC
Chicago, IL
Jacksonville, FL
Kansas City, MO/KS
Long Island, NY
Minneapolis, MN
New Jersey, Northern
New York, NY
Orlando, FL
Philadelphia, PA
Portland, OR
Richmond, VA
San Francisco, CA
Wilmington, DE
Columbus, OH
Miami, FL
Washington, DC
Atlanta, GA
Baltimore, MD
Birmingham, AL
Broward County, FL
Charleston, SC
Dallas, TX
Denver, CO
Fort Worth, TX
Hartford, CT
Houston, TX
Indianapolis, IN
Louisville, KY
New Jersey, Coastal
Phoenix, AZ
Pittsburgh, PA
Salt Lake City, UT
San Antonio, TX
San Jose, CA
Seattle, WA
St. Louis, MO
Tampa, FL
Report to Owners: Q1-2014
GLADSTONE YK INVESTMENTS INC.
Location: Yorkton, Saskatchewan
Suite Count: 58
Purchase Price Per Suite: $62,379
OPERATIONS
In the Trailing 12 (T-12) ending in Q1-2014, revenue is
up 4.5% over the previous year. Expenses, however, are up
4.7%. NOI is up 4.3% over last year.
Residents received rent notices this period. Despite the
higher rent we are asking, we anticipate being able to fill the
vacancies. The average vacancy for the quarter is 94%.
We had unexpected repairs this quarter due to the cold
weather. Several pipes froze and ruptured.
CASH RESERVES
As of the end of Q4 there was $114k in the operating
cash account, some of which is reserved for future capital
renovations.
We anticipate spending a portion of the capital reserves in
the upcoming quarter on a partial roof replacement and select
window replacements.
Gladstone: NOI up over last year by over 4%
Occupancy: averaged 94% in Q4, despite the severe winter
GladstoneCotenancy
StatementofIncome
Forthe12MonthsendedMarch31,2014
(withcomparativefiguresfor12MonthsendedMarch31,2013)
12Monthsended
March312014
12Monthsended
March312013 2014 2013
Revenue
Netrentalincome 505,291 $ 486,101 $ 125,761 $ 122,630 $
Tenantreimbursements 0.00 0.00
Otherincome 18831 16,115.8 4259 3,800.3
TotalRevenue 524122 502217 130020 126430
Expenses
Repairsandmaintenance 59021 43765 22554 10733
Managementfees 33055 31673 8181 7963
Utilities 55728 55352 23057 19375
Propertytaxes 60853 66445 14269 10491
Insurance 18531 18733 5400 4377
Generalandadministrative 13693 11613 4934 748
Marketing 447 329 108 148
Payroll 44052 44776 11517 11934
TotalExpenses 285378 272686 90019 65770
Netoperatingincome 238743 229530 40001 60660
Renovations 43846 64072 18971 10181
Depreciaitonandamoritization 183611 189055 0
Mortgageinterest 117752 120740 31241 31241
Netincome (106,466) $ (144,336) $ (10,212) $ 19,238 $
1stquarter
Report to Owners: Q1-2014
EDINBURGH SK PROPERTY INC.
Location: Saskatoon, Saskatchewan
Suite Count: 140
Purchase Price Per Suite: $105,714
OPERATIONS
Steady growth is apparent at Edinburgh in terms of both
revenue and NOI. In the Trailing 12 (T-12) ending in Q1-
2014, revenue is up 3.4% over the previous year. Expenses
are virtually unchanged from last year. NOI is up 5.5%.
Occupancy for the quarter averaged 95%, notwithstanding
the severe winter. The excessive snow and frigid temperatures
in Saskatoon made renting suites a real challenge and pushed
up the cost of repairs and maintenance.
A roof replacement had been done to fix leaks in the
building, yet recently a ceiling collapsed, as a result of water
damage. The ceiling repair was accrued in this quarter. In
addition, a recirculation pump had to be replaced, as well as
zone valves, and frozen pipes.
TWO NEW SUITES: BOOST TO RENT ROLL
Capital expenditures were high this quarter due to the
addition of the two new suites. The new one-bedroom suite is
rented at a 47% premium over original one-bedroom suites.
The new two-bedroom suite is currently being marketed at a
premium of 52% over the original two-bedroom suites.
REFINANCING
Our current mortgage comes due October 2014. We are
exploring the feasibility of a cash-out refinancing. We await
our lenders most competitive terms and rates. The boost in
NOI provided by the added suites will help us achieve our
refinancing goals.
CASH RESERVES
As of the end of Q1 there was approximately $400k in a
term deposit and approximately $32k in its operating account,
both reserved for future capital renovations.
Edinburgh: NOI up over last year by 5.5%
Occupancy: averaged 94% in Q4, despite the severe winter
EdinburghCotenancy
StatementofIncome
Forthe12MonthsendedMarch31,2014
(withcomparativefiguresfor12MonthsendedMarch31,2013)
12Monthsended
March312014
12Monthsended
March312013 Q12014 Q12013
Revenue
Netrentalincome 1,534,869 $ 1,478,254 $ 389,045 $ 380,689 $
Tenantreimbursements
Otherincome 29,322 43,678 2,886 6,490.15
TotalRevenue 1,564,191 1,521,931 391,931 387,179
Expenses
Repairsandmaintenance 118,885 134,549 32,686 22,975
Managementfees 99,529 96,027 25,139 24,737
Utilities 170,685 183,197 64,134 62,746
Propertytaxes 109,305 92,820 27,057 22,455
Insurance 26,250 22,111 7,500 6,250
Generalandadministrative 20,206 22,241 7,362 751
Marketing 5,889 4,500 1,003 1,507
Payroll 42,049 36,265 11,117 9,021
TotalExpenses 592,798 591,710 175,997 150,442
Netoperatingincome 971,393 930,222 215,935 236,737
CapitalExpenditures 138,288 114,905 103,828 58,658
Depreciation&Amortization 616,525 635,526
Mortgageinterest 365,671 376,490 98,241 98,241
Netincome (149,090) $ (196,700) $ 13,865 $ 79,837 $
Report to Owners: Q1-2014
DEDICATED N ANDREWS FL OASIS LP
Location: Fort Lauderdale, Florida
Suite Count: 140
Purchase Price Per Suite: $50,000
OPERATIONS
In Q1 of this year, the average occupancy was 97%. Our
asking rents have gone up, and we are collecting them due
to tight vacancy. In the Trailing 12 (T-12) ending in Q1-
2014, revenue is up 25.8% over the previous year. Expenses,
however, are up 31%, leaving NOI down 28.5% over last year.
During this period we have also seen a utility expense
increase matching our increase in occupancy. In the previous
reporting period, the units were unoccupied. They therefore
consumed no utilities and required less maintenance.
EFFICIENCIES
During this quarter we have continued our program of
finding efficiencies in utilities. In the last weeks of Q1, we
restructured the staffing in order to lower our total salary
cost.

The Oasis: incredible turnaround over last year continues
Occupancy trending higher: averaged 97% in Q1-2014
OasisApartments
StatementofIncome
Forthe12MonthsendedMarch31,2014
(withcomparativefiguresfor12MonthsendedMarch31,2013)
12Monthsended
March312014
12Monthsended
March312013 Q12014 Q12013
Revenue
Netrentalincome 1,131,182 $ 850,293 $ 301,090 $ 232,392 $
Tenantreimbursements 20,971 7,797 5,670 3,803
Otherincome 30,501 19,496 7,794 6,399
TotalRevenue 1,182,654 877,586 314,554 242,594
Expenses
Repairsandmaintenance 149,902 135,538 36,491 29,529
Managementfees 37,709 42,882 3,070 11,964
Utilities 161,333 139,744 45,664 35,262
Propertytaxes 179,747 161,215 43,439 37,445
Insurance 70,219 136,453 17,257 38,932
Generalandadministrative 66,026 47,073 13,151 9,087
Marketing 31,548 24,616 6,159 8,913
Payroll 133,592 126,788 38,241 37,743
TotalExpenses 830,078 814,310 197,332 208,875
Netoperatingincome 352,576 63,276 117,222 33,719
CapitalExpenditures 9,881 95,151 4,939 37,172
Depreciation&Amortization 248,647 179,003
Owner/AssetMgr/GpExp 249,250
Mortgageinterest 257,696 262,692 63,066 64,324
Netincome (143,885) $ (224,320) $ 49,216 $ (67,777) $
Report to Owners: Q1-2014
DEDICATED N ANDREWS FL CAMELOT LP
Location: Fort Lauderdale, Florida
Suite Count: 73
Purchase Price Per Suite: $65,411
OPERATIONS
During Q1 of 2014, the average occupancy was 92.6%.
Our year-over-year revenue has seen a 19.6 % increase on a
Trailing 12 basis.
The largest contributing factor to our vacancy is the three
commercial units that have not yet being rented. During Q1,
one of them was leased. We will be working with new brokers
in order to fill them up.
Together with Oasis, we restructured the Camelots
staffing. This should provide significant savings. We have been
monitoring our utility bills since we replaced the underground
pipes. On a Trailing 12 basis, we have seen a 20% decrees in
water bills.
CAPITAL PROJECTS
During this quarter we have received an order from the
fire department to comply with the municipality of Wilton
Manors updated fire code. The code obligates us to install
hardwire smoke and Co2 detectors to replace the battery
operated ones currently used. We are currently negotiating
with trades to bring the property to code.
Camelot West: revenue up close to 20% over last year
Occupancy trending higher: averaged 92.6% in Q1-2014
CamelotApartments
StatementofIncome
Forthe12MonthsendedMarch31,2014
(withcomparativefiguresfor12MonthsendedMarch31,2013)
12Months
ended
March31
2014
12Months
ended
March31
2013 Q12014 Q12013
Revenue
Netrentalincome 618,907 $ 525,522 $ 158,791 $ 149,677 $
Tenantreimbursements 10,833 4,753 2,704 2,958
Otherincome 17,513 10,924 6,312 2,971
TotalRevenue 647,253 541,198 167,806 155,607
Expenses
Repairsandmaintenance 118,033 115,134 29,113 25,235
Managementfees 33,843 32,484 8,633 8,364
Utilities 91,097 108,333 25,837 36,992
Propertytaxes 103,391 97,544 25,490 24,059
Insurance 49,803 76,953 14,187 18,199
Generalandadministrative 33,212 22,788 8,086 3,421
Marketing 16,876 16,993 6,156 6,620
Payroll 86,791 119,853 22,971 36,207
TotalExpenses 533,046 590,083 140,473 159,098
Netoperatingincome 114,207 48,885 27,333 3,491
CapitalExpenditures 4,451 116,110 17,000 50,469
Depreciation&Amortization 186,360 149,706
Owner/AssetMgr/GpExp 138,000
Mortgageinterest 112,854 97,924 28,106 29,700
Netincome (180,556) $ (274,625) $ (17,773) $ (83,660) $
Report to Owners: Q1-2014
Occupancy trending higher: averaged 94.7% in Q1-2014
Parrots Landing: 4% gain in net revenue
DEDICATED (PARROTS LANDING) LP
Location: North Lauderdale, Florida
Suite Count: 560
Purchase Price Per Suite: $100,536
OPERATIONS
During Q1, the average occupancy was 94.7%. In
comparing the Trailing 7 months and the 7 months prior,
when we purchased the property, we have seen a 4% gain in
net revenue.
During this quarter, we introduced Yardi maximizer,
revenue management software which offers dynamic pricing.
This technology has enabled us to do away with concessions.
We have been pushing up rents on all but two of the floor
models. Delinquency continues to fall. Rent is coming in on
time, so we havent been collecting as many late fees as last
year, when legacy tenants still occupied the building. During
this quarter, we have reevaluated our leasing staff and made
some personnel changes. Our big capex project has been
tree trimming around the property. This effort aims to both
mitigate hurricane damage and prevent rodents from being
able to reach the roof.
We are exploring the option of severing Phase 2 and selling
it. The profits would enable us to repatriate our investors with
a significant portion of their original capital.
LEASING ACTIVITY:
Parrots Landing had 59 move-ins, 56 move-outs, and 112
lease renewals in Q1-2014. During this period, our rent roll
increased by 2 cents a square foot, to $1.07 per square foot.
PROJECTIONS
We continue to evaluate our sub metering, but we do not
want it to interfere with our plan of hiving off Phase 2.
We see general expenses coming down as we move into the
next quarter. We made sure that all bills received are either
paid or accrued, so statements reflect the most up-to-date
information.
The large capital expense items are behind us, so we project
relatively low capital expenditures in the coming quarters.
Capital expenditures are mainly for turnover of units at this
point. Turnover is projected in the current year, 2014, at 41-
42%.
ParrotsLanding
StatementofIncome
Forthe7MonthsendedMarch31,2014
(withcomparativefiguresfor7MonthsendedMarch31,2013)
7Monthsended
March312014
7Monthsended
March312013 Q12014 Q12013
Revenue
Netrentalincome 3,518,358 $ 2,361,480 $ 1,550,992 $ 1,364,515 $
Tenantreimbursements 242,663 149,593 107,457 87,545
Otherincome 155,159 104,024 72,496 61,849
TotalRevenue 3,916,180 2,615,098 1,730,945 1,513,908
Expenses
Repairsandmaintenance 343,508 179,210 136,527 116,276
Managementfees 177,949 270,864 78,675 69,277
Utilities 312,800 169,795 133,213 117,887
Propertytaxes 878,963 471,535 334,706 297,962
Insurance 245,300 179,639 103,104 121,174
Generalandadministrative 90,943 45,532 23,979 16,233
Marketing 70,577 39,666 23,676 37,276
Payroll 311,738 199,447 135,652 136,181
TotalExpenses 2,431,779 1,555,687 969,533 912,266
Netoperatingincome 1,484,401 1,059,411 761,412 601,642
CapitalExpenditures 136,151 66,655 30,565 57,354
Depreciation&Amortization 3,934,156 769,710
Mortgageinterest 880,733 643,687 376,310 383,096
Netincome (3,194,338) $ (420,642) $ 354,537 $ 161,192 $

Report to Owners: Q1-2014

DEDICATED OCONNOR RR LP
Location: Austin, Texas
Suite Count: 583
Purchase Price Per Suite: $126,930
OPERATIONS
During this quarter, our average occupancy was 97%. We
introduced Yardi Maximizer, revenue management software,
which provides dynamic pricing. This technology has enabled
us to do away with concessions. Some of the floor plans
have been seeing a $200 lease-over-lease increase! Our total
income quarter over quarter was increased by close to $86k.
The introduction of the upgraded units has been extremely
successful, increasing rent for these units to $150 more than
the market price. While the cost payback is around 4 years,
the capitalized value of the $1800-a-year in income justifies
this capital outlay.
We continue to do improvements on the common areas.
During this quarter, we have striped and resurfaced all the
parking lots, as well as improved the exterior lighting in Phase
2 to give the residents more security.
LEASING ACTIVITY:
During the first quarter, The Landing had 82 move-ins, 68
move-outs, and 96 lease renewals.
The net exposure to vacancy went from 4% in January to
2% in March due to our leasing efforts. Our price per square
foot has moved closer to $.94 during this period.
Occupancy trending higher: averaged 97% in Q1-2014
The Landing: $200 lease-over-lease increase in new suites
LandingatRoundRock
StatementofIncome
FortheperiodendedMarch31,2014
1stQuarter
Revenue
Netrentalincome 1,915,720 $
Tenantreimbursements 100,423
Otherincome 70,197
TotalRevenue 2,086,340
Expenses
Repairsandmaintenance 226,549
Managementfees 90,365
Utilities 73,138
Propertytaxes 413,658
Insurance 50,240
Generalandadministrative 17,470
Marketing 62,242
Payroll 171,727
TotalExpenses 1,105,389
Netoperatingincome 980,951
Renovations 203,913
Mortgageinterest 508,861
Netincome 268,177 $