At KCN, our bullish outlook on the Outdoor Hospitality sector is supported by historical trends in other real estate asset classes. Over the past 30 years, we have witnessed the appreciation of previously under-recognized asset classes such as residential, multi-family, commercial, and industrial properties. These asset classes were initially fragmented, with many owner-operators who acquired properties through inheritance or direct purchase in the past.

However, as the value and upside potential of these asset classes became evident to investors, these properties started to be aggregated. Smaller investors were the first to enter the market, followed by larger investors such as hedge funds, institutional investors, and family offices. This trend has changed the dynamic of these asset classes forever.

We believe that the Outdoor Hospitality sector is approaching a similar inflection point, where institutional investment will enter the space and bring about significant changes. However, we also believe that we are ahead of this timeframe in this asset class, before the period where large numbers of institutional investors have entered the space. As such we are aggressively working to assemble a world-class portfolio of outdoor hospitality properties that align with our strict investment criteria and offer substantial upside potential in both short and long-term time horizons.

This belief is supported by data and facts that highlight the increasing interest and investment in the Outdoor Hospitality sector. According to a report by the National Association of RV Parks and Campgrounds (ARVC), the outdoor hospitality industry has been experiencing steady growth in recent years, with annual revenues reaching $35 billion in 2022. This growth has been driven by various factors, including an increasing number of people seeking outdoor experiences, the rising popularity of RV travel, and the growing demand for unique and experiential accommodations.

Furthermore, institutional investors have been showing increasing interest in the Outdoor Hospitality sector. For example, in 2020, Brookfield Asset Management, a leading global alternative asset manager, announced its entry into the outdoor hospitality market by acquiring a portfolio of RV parks and campgrounds. This indicates an early but growing recognition of the potential of this asset class among institutional investors.

In addition, the COVID-19 pandemic has also accelerated the demand for outdoor hospitality properties. With travel restrictions and social distancing measures in place, many people turned to outdoor recreational activities, including camping and RV travel, as a safe and socially distant way to enjoy leisure time. This increased demand has resulted in higher occupancy rates and revenues for outdoor hospitality properties, and while COVID has abated the demand for outdoor experiences and travel continues to be incredibly strong – a trend we see continuing.

In conclusion, we believe the Outdoor Hospitality sector is poised for growth and transformation. At KCN, we are proactively leveraging this trend by assembling a high-quality portfolio of outdoor hospitality properties that offer significant upside potential. Our strategy is supported by historical trends, industry data, and the changing dynamics of the real estate market, making us confident in our bullish outlook for the Outdoor Hospitality sector.