Overview of the U.S. Legal Framework

As soon as ACRON has identified a property that meets all of the criteria for a successful ACRON investment, an "ACRON [name of property] L.P." is founded that acquires the property.

Limited Partnership

A limited partnership is a partnership under U.S. law. Each limited partnership has a general partner with unlimited liability. In addition, there are limited partners whose liability is limited to the amount of their contribution. Investors sign a subscription agreement and make their contribution. As soon as the general partner has accepted said agreement, the investors become limited partners, i.e., shareholders. Like shareholders acquiring shares, limited partners are exposed to liability only to the extent of their respective investment and do not bear any further liability risk. Investors are not required to furnish or enter into any guarantees or other similar obligations. Neither do investors incur liability upon full repayment of their contributions by way of distributions made by the limited partnership.

Distributions

Limited partners hold interests in the company and therefore indirectly own part of the property. They receive a distribution in accordance with the share they hold. The amount that is distributed (the "distribution") is made up of the profit after tax and depreciation/amortization, less any loan repayments to be made. All distributions are credited to the investors' capital accounts as repayment of equity or as a profit distribution.

An ACRON Company as the General Partner

An ACRON company assumes the role of the general partner. In most cases these companies take the form of limited liability companies (LLC), i.e., corporations. In the United States it is permissible and not unusual for the partner with unlimited liability to be a corporation instead of a natural person – unlike what is prescribed in Switzerland. Choosing the form of an LLC prevents recourse by creditors to ACRON (USA) L.P. This ensures that potential difficulties encountered with one real estate limited partnership do not have negative effects on any other real estate limited partnership that exists simultaneously. The sole object and purpose of the ACRON [name of property] L.P. is to own and hold the property to generate the highest possible return for investors.

Property Financing

The property itself and any additional acquisition expenses are financed through a combination of the equity contributed by the investors and borrowed funds provided by an American bank. The funds are borrowed by obtaining a non-recourse loan with the property being the only collateral provided to the creditor. Investors are therefore not required to furnish other security such as guarantees or similar.

Individual Solutions For Sophisticated Investors

ACRON offers its investors legal investment strategies and forms of investment that meet their specific needs and are individually structured. For example, ACRON has developed structures in the past that provided for several investors joining forces to form a company which, as a single company, in turn became an investing partner of an "ACRON [name of property] L.P.". This is of particular interest for families whose members want to invest jointly, especially under aspects of estate tax.