Belpointe PREP, LLC (OZ) stock intrinsic value fair value estimate & owner earnings analysis

Belpointe PREP, LLC (NYSE American: OZ) is a real estate fund that invests in and develops properties inside federally designated Opportunity Zones, with all of its properties currently located in the Tampa Bay area of Florida (Sarasota and St. Petersburg). The company owns two large, newly built apartment communities -- Aster & Links in Sarasota (424 units, plus retail anchored by a Sprouts Farmers Market) and VIV in St. Petersburg (269 units) -- along with a small office property under a long-term lease. Both apartment communities finished construction only recently (Aster & Links in 2024, VIV in late 2025) and are still in the leasing-up phase: as of March 2026, Aster & Links was about 67% leased and VIV about 37% leased. Because the company is still filling these buildings rather than running them at full capacity, it has not generated positive cash flow in any year since it began operating in 2020. Rental income has grown quickly (from under $1 million to over $9 million in 2025) but property operating costs, management fees, and interest on construction debt have grown just as fast, so cash flow to the business before financing costs has run consistently negative -- roughly $2.10 to $2.70 per unit in each of the last four years. This is the starting point for our estimate of what the business can produce once its two flagship communities are fully leased. The company has also taken on substantial debt to build these properties: total borrowings were roughly $279 million as of mid-2026, against about 3.9 million units outstanding. Both major loans carry floating interest rates well above the rate we use to discount future cash flows (one floors at roughly 5.8%, the other at 7.55%), and both come due in 2027, with extensions that require lender approval rather than being guaranteed. We value the properties' future cash flow first, then subtract this debt to see what, if anything, is left for unit holders. Bear case: lease-up stalls short of full occupancy and rents come in below plan -- VIV's pace, only 37% leased five months into leasing, has already run slower than Aster & Links' -- while the company's fixed operating costs do not shrink to match. If the 2027 loan maturities cannot be refinanced on similar terms, additional cost or dilution results. Under this path, the value of the properties once stabilized does not cover the debt, leaving the units worth meaningfully less than nothing, at roughly $(42) per unit. Base case: both communities reach a normal, though not exceptional, stabilized occupancy over the next two to three years, in line with the return the company itself targeted when it built Aster & Links (just above a 6% unlevered yield on cost). We did not assume the company adds further properties beyond its current three, because it has not yet demonstrated a repeatable pattern of successful developments -- it has completed only two, and both are still being leased. Even with successful stabilization, the value of the properties' future cash flow, discounted at a conservative rate and not assumed to grow further after that, does not fully cover the roughly $279 million of debt. On this basis, the units are worth approximately $(13) each -- the company currently appears to owe more than the business, once fully leased, is likely to be worth. Bull case: both properties lease up faster and at somewhat better economics, consistent with the higher end of what the company has targeted, and the 2027 refinancings go smoothly, as the September 2025 refinancing of Aster & Links did, saving several million dollars of annual interest. Even here, the value of future cash flow roughly equals the debt outstanding, putting the units at approximately $(2) each -- close to break-even, not a case for meaningful upside. Across all three cases, the debt taken on to build these two large properties is large relative to their likely cash-generating power, leaving little or nothing for unit holders once that debt is accounted for. We did not credit any value for growth beyond the three properties the company already owns, because nothing in the filings points to a proven, repeatable pattern of new developments; crediting such growth would be speculation rather than evidence. We also did not treat the company's current cash as available to offset debt, because it has used cash faster than it has generated it every year since inception and needs what it holds to keep operating. One accounting note: essentially all of the roughly $400 million the company has spent on construction since inception reflects money spent building assets that did not previously exist, not money spent maintaining or replacing existing income-producing property. We treated all of it as growth investment rather than a recurring cost of doing business, so the deficit above already reflects a fully-built company that has not yet filled its buildings, not one that must keep spending indefinitely just to stand still. Given the above, the analysis does not currently support a margin-of-safety price. A revisit is warranted once both communities show sustained occupancy above roughly 90% at rents in line with what was originally underwritten, and once the loans maturing in 2027 have been refinanced without a material increase in cost or new dilution -- at that point the business can be priced against its realized, rather than projected, cash flow.