Cottonwood is a 20-year-old, multifamily focused, real estate investment manager available to you through Heritage Financial Group, LLC. Cottonwood is structured as a Net Asset Value (“NAV”) REIT which means that the price of its common stock adjusts monthly based on the fair market value of its assets. Over the last 20 months, the price has adjusted downward due to falling real estate values caused by interest rate increases and rising cap rates.

Cottonwood believes this price correction may provide an attractive entry point for investors who appreciate the strong long-term multifamily fundamentals as demonstrated below:

1. Renting vs. Buying: Widest Spread in History
   Home ownership affordability is at its lowest level since the pre-2008 global financial crisis.¹ In 2023, the average monthly mortgage payment was more than 69% higher than the average monthly apartment rent.²
2. Diminishing Future New Supply
   Multifamily construction starts are down approximately 45%³ and multifamily construction permits down approximately 26%⁴ year over year (“YOY”) as of Q1 2024.
3. Rising Replacement Costs Further Hinder Future New Supply
   Certain property values are well below the current cost to build due to rising construction costs. As of Q1 2024, construction costs increased 3.11% YOY, and 12.3% since Q4 2021; meanwhile, asset values have decreased 8.02% YOY, and 32.8% since peak in Q4 2021.⁵
   • The impact is that there is a reduced market incentive for developers to build since the cost to build may exceed the sale price. Cottonwood believes that this will negatively impact future supply resulting in higher long-term rental rates.⁶

Given these trends and Cottonwood’s current valuation and strong market position, we encourage you to attend our upcoming seminar “Where are we in the Multifamily Real Estate Cycle.”

1) Source: Federal Reserve Bank of Atlanta (https://www.atlantafed.org/center-for-housing-and-policy/data-and-tools/home-ownership-affordability-monitor).
2) Sources: Federal Reserve Economic Data & Statista.
3) Real Page Market Analytics as of Q1 2024.
4) U.S. Census Bureau, Q1 2024 .
5) U.S. Census Bureau; Greenstreet CPPI, weighted average of apartment markets as of Q1 2024.
6) There can be no assurance these objectives will be achieved.

The Cottonwood Communities, Inc. prospectus (including all supplements) is available by clicking here, or visiting www.cottonwoodcommunities.com.
An investment in our shares is speculative, illiquid and involves a high degree of risk and there is no guarantee that investors will receive any return or that they will not lose their entire investment. No public market exists for our shares; a stockholders’ ability to dispose of their shares will likely be limited to repurchase by us; our share repurchase program is subject to restrictions and our board of directors may modify or suspend our share repurchase program at any time; purchases and repurchases of shares of our common stock are made based on the most recently disclosed NAV per share at such time, NAV does not currently represent our enterprise value and may not accurately reflect the actual prices at which our assets could be liquidated on any given day, the value a third party would pay for all or substantially all of our shares, or the price that our shares would trade at on a national stock exchange; our board of directors may amend our NAV procedures from time to time; distributions are not guaranteed and have in the past and may in the future be funded with offering proceeds, we have no limit on the amounts we may pay from such sources; we depend on our advisor to select investments and to manage our business; we pay substantial compensation to our advisor and its affiliates, which increase the risk that our stockholders will not earn a profit on their investment.
This is neither an offer to sell nor a solicitation of an offer to buy the securities described in the Prospectus. The offering is made only by the Prospectus and this material must be preceded or accompanied by the Prospectus. Neither the Securities and Exchange Commission nor any other state securities regulator has approved or disapproved of the securities or determined if the Prospectus is truthful or complete. In addition, the Attorney General of the State of New York has not passed on or endorsed the merits of the offering. Any representation to the contrary is unlawful. Securities offered through Orchard Securities, LLC, a member of FINRA and SIPC. CW Markets Group is a Branch Office of Orchard Securities, LLC.