Kensington prides itself on the thoroughness and flexibility of its reporting systems. It has been used as a standard of excellence by our clients. The accounting policies and procedures which we have established as outlined below are consistently applied to both the portfolio and property levels of accounting. In order to enhance productivity, efficiency and investment performance, we have made a major resource commitment to high-level technological systems. These systems are utilized in investment analysis, portfolio management, asset management, property management, client reporting (qualitative and quantitative), communications, cash management, and funds transfer.

Our computer system is fully networked with work stations on all employees' desks and at the property level in the case of apartments. The hardware and software includes the most up-to-date technology. Complete access allows the staff to communicate from home or anywhere in the world by use of personal or portable computers. The ultimate benefit of the system is increased productivity and better reporting for utilization in decision making, which translates into value added for the client through improved performance.

Property Level Accounting
In accordance with our Financial Reporting Requirements, the property manager is to report all accounting activity on a monthly basis by the 15th day following the month end, unless otherwise specified by the client timeline. These reports and their supporting schedules are reviewed by the financial manager or other accounting staff of Kensington for errors, omissions, variances, misstatements, and compliance with the established requirements, policies, and procedures. The financial manager is responsible for communicating any findings to the asset manager, who also reviews the reports. Additional documentation, clarification, omitted statements, or restated/adjusted reports may be requested as needed.

In accordance with our Budget Reporting Requirements, the property manager submits its annual budget to sponsorship no later than 75 days prior to the budget year. The annual budget is prepared utilizing the same method of accounting used for financial reporting purposes. The approved budget is used as a basis of comparison with actual year-to-date financial and accounting data. The property level reports include a detailed variance analysis.

Asset Management Level Accounting
Accounting data derived from the property level reports and supporting schedules are used by Kensington as the basis for producing the asset management level accounting. The assets are accounted for on both an individual property and consolidated portfolio basis using Yardi Voyager accounting, property management and investment management software. The quarterly asset management reports are produced in compliance with our Reporting Policies and Procedures and submitted to the client within the required period of time, typically 30 to 45 days following the quarter end.

The individual property and consolidated portfolio reports are reviewed by senior management on a monthly basis. This involves a review of accounting variances from budgeted expectations, evaluation of property manager performance, review of portfolio returns, verification of compliance with client reporting and accounting requirements, and recommendations for further action, if necessary, in accordance with the asset management plan.

Yardi Voyager Accounting and Investment Management System
Kensington has continuously made significant investments in what we believe is the most cutting edge and best property and asset management software system available. Yardi Voyager is a web-based software that not only streamlines property and investment-level accounting functions, but also provides our asset managers with financial, operational and performance data. Instant access to customized reports from anywhere enables Kensington to make strategic investment decisions very quickly and respond to rapidly changing market conditions. The integration of accounting, property management and investment management translates into accurate financial reporting, timely strategic decisions and provides maximum returns to our investors.

Yardi Voyager features:

Yardi Voyager Residential is a property management and accounting system designed to help manage several aspects of our multifamily portfolio, including prospect workflow, revenue management, and online leasing.

Office and Industrial
From deal tracking to lease management to calculating recoverable expenses, Yardi Voyager™ Commercial is a full management and accounting solution designed for office and industrial products.

Yardi Voyager Senior Housing combines accounting functionality with effective marketing, care assessment and management, resident billing and census in a single integrated system.

Yardi Investment Management™ strengthens investor confidence by increasing corporate transparency and automating complex portfolio accounting with reporting, valuation, and executive management tools.

Yardi Portal™ connects property managers to prospects and residents using the power of the Internet, and leverages the depth, integrity, and maturity of Voyager 6.0 to deliver an unmatched solution. Portal provides a full-featured marketing website to attract new prospects, and a resident portal to help retain residents by offering the services they demand.

Yardi Budgeting and Forecasting provides detailed analysis and comparison of future income and expenses. It streamlines budget preparation and provides unmatched flexibility by creating custom models and formulas.

Rent Processing Yardi CHECKscan™ streamlines rent collection by converting paper checks into efficient electronic transactions. Bank runs and errors are virtually eliminated, and funds are transferred the same day - greatly improving operational efficiency and cash flow.

For more information on this software, please visit Yardi Systems, Inc.