To our investors and partners,

When we began reporting on responsible investing, our objectives included reducing energy and emissions intensity, improving water efficiency and waste diversion, strengthening our community engagement, and embedding governance discipline throughout the investment cycle. Guided by these commitments, we have continued to translate ambition into execution. This year, we focused on actions that deliver measurable results within our typical investment horizon while positioning the portfolio for long-term resilience in markets with increasingly stringent building performance regulations.

Our most consequential advancement was the continued transformation of our data into a strategic asset. In the first half of 2025, we expanded our sustainability dataset to cover asset-level metrics from 2019 through 2024, added ten properties to our Measurabl platform, and secured tenant permissions for direct utility data access. These steps closed key gaps, increased coverage, and gave our teams granular, real-time visibility into electricity, gas, and water consumption. With a more complete dataset, we refined how we track energy usage and emissions intensity at the asset-class level and aligned our methodologies to standard emissions factors. We are also in the early stages of deploying AI-enabled analytics to detect anomalies, correlate trends with occupancy and weather, and pinpoint the highest-return efficiency investments. This robust foundation enhances decision quality, supports regulatory compliance, and drives operational performance. We coupled data progress with targeted capital improvements that create environmental and financial value during our hold period. Our strategy is to prioritize high-impact upgrades LEDs, low-flow fixtures, and building management system optimization that pay back quickly and reduce operating risk.

We also continued to integrate sustainability considerations into acquisition diligence. Our refined process emphasizes bottom-line impacts, models compliance with emerging Building Performance Standards in cities such as Boston, New York, and Washington, D.C., and prices expected capital needs into underwriting. With energy demand rising accelerated by the growth of AI and data centers – we view efficiency as a critical driver of value. By embedding energy data and compliance modeling into our investment workflows, we protect downside risk while preserving agility to capture upside within a short-duration strategy.

Our culture remains a durable competitive advantage. We expanded our firmwide learning agenda with a series of Lunch & Learn sessions covering topics from environmental remediation and mezzanine debt to cybersecurity and compliance best practices. We complemented technical programming with communications training to cultivate a high-performance, resilient team. Finally, we continued to build a diverse talent pipeline through partnerships with Thrive Scholars, PREA’s Sponsors for Educational Opportunities, and the Boston Summit, deepening our commitment to expanding access to careers in real estate.

We are proud to have been recognized again among the most charitable companies in Massachusetts. Beyond financial contributions through our matching gift program, our team volunteered time and leadership to organizations that strengthen our communities. Davis colleagues served on the board of Heading Home, including my tenure as board chair in 2022 and 2023, and supported record fundraising at the organization’s annual Housewarming event. We joined programs such as Backpack Buddies and Cookies for a Cause, volunteered with the Esplanade Association, and helped raise funds for Make-A-Wish alongside partners in our industry.

Strong governance underpins our strategy. At the fund level, we track adherence to investment restrictions through a quarterly Governance Tracker and maintain active engagement with our LPACs. At the firm level, our Investment Committee – comprising our executive team, select voting members, and our Director of Responsible Investing – meets weekly and follows an approval framework to ensure rigorous assessment of investment, compliance, and responsible investing implications. We reinforce these processes through monthly reconciliations of IC minutes and votes, quarterly valuations led by portfolio management and finance, and recurring REIT meetings to confirm proper alignment with fund ownership. Our compliance program includes pre-clearance controls, affiliate transaction tracking, and periodic audits designed to uphold our fiduciary obligations and sustain best-in-class transparency.

We recognize the growing momentum of decarbonization policies and the economic implications of noncompliance. With enhanced data coverage, advanced analytics, and a disciplined approach to capital planning and diligence, we are positioned to navigate evolving regulation, reduce operating risk, and deliver attractive risk-adjusted returns. As always, we will report progress consistently, refine our methods as the data improve, and focus on actions that matter within our ownership window.

Thank you for your continued partnership and trust.

Sincerely,

Stephen Davis
CEO
Davis