An offering statement pursuant to Regulation A relating to these securities has been filed with the Securities and Exchange Commission. Information contained in this Preliminary Offering Circular is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted before the offering statement filed with the Commission is qualified. This Preliminary Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sales of these securities in any state in which such offer, solicitation or sale would be unlawful before registration or qualification under the laws of any such state. We may elect to satisfy our obligation to deliver a Final Offering Circular by sending you a notice within two business days after the completion of our sale to you that contains the URL where the Offering Circular was filed may be obtained.

Preliminary Offering Circular

September 21, 2016

Subject to Completion

  GK INVESTMENT HOLDINGS, LLC

257 East Main Street, Suite 200

Barrington, IL 60010

(847) 277-9930

7% Unsecured Bonds

$50,000,000 Maximum Offering Amount (50,000 Bonds)

$5,000 Minimum Purchase (5 Bonds)

GK Investment Holdings, LLC, a Delaware limited liability company, referred to herein as our company, is offering 7% unsecured bonds, or the Bonds. The purchase price per Bond is $1,000, with a minimum purchase amount of $5,000. The Bonds will mature on September 30, 2022 and will bear interest at a fixed rate of 7% per annum. Interest on the Bonds will be paid monthly beginning on the 15th day of the second month following the initial closing of this offering. The Bonds will be offered to prospective investors on a best efforts basis by our Managing Broker-Dealer, JCC Advisors, LLC, or JCC. "Best efforts" means that JCC is not obligated to purchase any specific number or dollar amount of Bonds, but will use its best efforts to sell the Bonds. JCC may engage additional broker-dealers, or Selling Group Members, who are members of the Financial Industry Regulatory Authority, or FINRA, to assist in the sale of the Bonds. At each closing date, the proceeds for such closing will be disbursed to our company and Bonds relating to such proceeds will be issued to their respective investors. We expect to commence the sale of the Bonds as of the date on which the Offering Statement is declared qualified by the United States Securities and Exchange Commission. The offering will continue through the earlier of September 30, 2017 or the date upon which all $50,000,000 in offering proceeds have been received, subject to extension in the sole discretion of our manager, GK Development, Inc., for an additional six (6) months.

_________

⁽¹⁾ This includes selling commissions of 5% and a Managing Broker-Dealer Fee of up to 3% of the gross proceeds of this offering to be paid on Bonds offered on a best efforts basis. All such amounts will be paid to JCC, who may reallow up to the entire amount of selling commissions and Managing-Broker Dealer Fee to Selling Group Members. JCC shall be entitled to retain, out of the Managing Broker-Dealer Fee, an amount equal to 0.57% of the gross proceeds of the offering. JCC may re-allow and pay to wholesalers and other participants in the offering up to the entirety of the remaining 2.43% portion of the Managing Broker-Dealer Fee. Any amount of the Managing Broker-Dealer Fee in excess of the 0.57% JCC is entitled to retain that is not re-allowed shall be returned to the Issuer.  This also includes due diligence expense reimbursements of up to $60,000, 0.12% of the maximum offering amount.  See "Use of Proceeds" and "Plan of Distribution" for more information.

⁽²⁾ The table above does not include anticipated organizational and offering expenses of $275,000, blue sky fees of $75,000 and a promotional fee of 1.88% of the gross proceeds of this offering ($940,000 if the maximum offering amount is sold) to be paid to GK Development, Inc. in compensation for promoting this offering.

Generally, no sale may be made to you in this offering if the aggregate purchase price you pay is more than 10% of the greater of your annual income or net worth. Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(C) of Regulation A. For general information on investing, we encourage you to refer to www.investor.gov.

An investment in the Bonds is subject to certain risks and should be made only by persons or entities able to bear the risk of and to withstand the total loss of their investment. Currently, there is no market for the Bonds being offered, nor does our company anticipate one developing. Prospective investors should carefully consider and review that risk as well as the RISK FACTORS beginning on page 8 of this Offering Circular.

THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION, OR THE COMMISSION, DOES NOT PASS UPON THE MERITS OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SELLING LITERATURE. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.

TABLE OF CONTENTS

Contents
OFFERING CIRCULAR SUMMARY			3
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS			7
RISK FACTORS			8
USE OF PROCEEDS			23
PLAN OF DISTRIBUTION			25
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			31
GENERAL INFORMATION AS TO OUR COMPANY			33
POLICY WITH RESPECT TO CERTAIN ACTIVITIES			36
INVESTMENT POLICIES OF OUR COMPANY			37
DESCRIPTION OF REAL ESTATE			41
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS			46
DESCRIPTION OF BONDS			49
LEGAL PROCEEDINGS			55
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			56
DIRECTORS AND EXECUTIVE OFFICERS			57
EXECUTIVE COMPENSATION			60
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS			61
SELECTION, RETENTION AND CUSTODY OF COMPANY'S INVESTMENTS			62
POLICIES WITH RESPECT TO CERTAIN TRANSACTIONS			63
COMPENSATION OF OUR MANAGER AND ITS AFFILIATES			64
LIMITATIONS ON LIABILITY			68
EXPERTS			69
LEGAL MATTERS			70
WHERE YOU CAN FIND ADDITIONAL INFORMATION			71
INDEX TO FINANCIAL STATEMENTS			F-1
APPENDIX			A-1

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OFFERING CIRCULAR SUMMARY

This summary highlights information contained elsewhere in this Offering Circular. This summary does not contain all of the information that you should consider before deciding whether to invest in our Bonds. You should carefully read this entire Offering Circular, including the information under the heading "Risk Factors" and all information included in the Offering Circular.

Our Company. GK Investment Holdings, LLC was formed on September 14, 2015 to acquire existing income producing commercial rental properties. Our company, through wholly-owned subsidiaries, holds title to a commercial rental property located in Henderson, Nevada, and more commonly known as Lake Mead Crossing. Lake Mead Crossing was acquired on November 12, 2015 from an unaffiliated, third party seller, and it is currently our company's sole asset. Lake Mead Crossing consists of multiple buildings aggregating approximately 220,000 square feet of rentable commercial space. Lake Mead Crossing is part of a larger shopping center, anchored by a Target. Lake Mead Crossing is owned by two of our subsidiaries. Lake Mead Partners, LLC, a wholly-owned subsidiary of Lake Mead Parent, LLC, a wholly-owned subsidiary of our company owns a portion of Lake Mead Crossing consisting of approximately 160,000 square feet of rentable commercial space that is currently 99.2% leased. Lake Mead Development, LLC, a wholly-owned subsidiary of our company owns the other portion of Lake Mead Crossing consisting of approximately 60,000 square feet of rentable commercial space that is currently 52.5% leased.

Mr. Garo Kholamian is the beneficial owner of 71.519% of the outstanding units of our company, and his wife, Mrs. Nancy Kholamian, is the beneficial owner of 19.519% of the outstanding units of our company. Our company is solely managed by GK Development, Inc., or GK Development or our manager. GK Development was formed on May 19, 1994 under the laws of Illinois, and Mr. Garo Kholamian is the sole director and shareholder of GK Development. As a result, Mr. Garo Kholamian will effectively manage our company.

Our company does not intend to act as a land developer in that it is has no intent to invest in, acquire, own, hold, lease, operate, manage, maintain, redevelop, sell or otherwise use undeveloped real property or "raw land," as a ground up development. Our company, engaging in its commercial real estate activities, may have the opportunity to acquire commercial real property which includes unimproved pad sites for future development and lease-up opportunities. In such instances, our company will retain the unimproved pad sites for ground lease, build-to-suit and/or sell opportunities. In situations where our company has the opportunity to acquire commercial real property which includes a large tract of developable raw land, the developable raw land will not be acquired by our company, but may be acquired by an entity affiliated with GK Development. Our company may choose to redevelop real property for an alternative use than intended when originally acquired or developed.

Our company is focused on investments in existing, income producing commercial rental properties that will benefit from GK Development's real estate operating and leasing skills, including releasing, redeveloping, renovating, refinancing, repositioning, and selling. GK Development intends to actively participate in the management of our company's properties rather than hold the properties as passive investments.

Certain affiliates of GK Development have agreed to loan us all cash flows received from equity interests they own in certain real property located at 5775 Beckley Road, Battle Creek, Michigan 49015 and more commonly known as Lakeview Square Mall, or Lakeview Square, and that certain real property located at 1888 Green Oaks Road, Fort Worth, Texas 76116 and more commonly known as Ridgmar Mall, or Ridgmar, in order to ensure we have sufficient reserves of cash and cash equivalents to fund 120% of our debt service obligations under the terms of the Bonds, or the Bond Service Obligations, for a period of three (3) months. GK Development's affiliates have also agreed to enter into agreements with us whereby the trustee may force the sale of (1) the equity interests of 1551 Kingsbury Partners, L.L.C., or the Ridgmar Equity, in 1551 Kingsbury Partners Senior Mezz, LLC, or Senior Mezz, which entity owns an indirect 12.5% equity interest in Ridgmar, and (2) the equity interests of Garo Kholamian and GKPI I Partners (Lakeview Square), LLC, or the Lakeview Equity, in GK Preferred Income Investments I (Lakeview Square), LLC, or GK Preferred, which represents an indirect 72% equity interest in Lakeview Square, as a remedy if we default on the Bonds. We refer to these agreements as the Initial Forced Sale Agreements. See "Description of Bonds - Certain Covenants" for more information.

Management. The sponsor of our company, GK Development, is a Barrington, Illinois based real estate acquisition and development company specializing in the acquisition, management, and redevelopment of commercial rental properties. Its management provides years of experience successfully acquiring, redeveloping and managing commercial rental properties. Mr. Garo Kholamian is the President and founder of GK Development. Prior to GK Development, Mr. Kholamian was Senior Vice President of Development for Homart Development Co., the real estate development arm of Sears Roebuck. In this position, he was instrumental in the development of shopping centers across the United States. See "Directors and Executive Officers" for more information on Mr. Kholamian and the seven other individuals responsible for the management of GK Development.  

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The Offering. Our company is offering to investors the opportunity to purchase up to a maximum of $50,000,000 of Bonds. See "Plan of Distribution - Who May Invest" for further information. There is no minimum offering amount; therefore, our company may accept purchases of the Bonds as soon as the Offering Statement of which this Offering Circular is a part has been qualified by the Securities and Exchange Commission, the SEC. The offering will continue through the earlier of  September 30, 2017 or the date upon which all $50,000,000 in offering proceeds have been received, or the Offering Termination, subject to extension in the sole discretion of GK Development for an additional six (6) months. Following qualification of the Offering Statement, our company will conduct closings in this offering at its discretion, or the Closing Dates and each, a Closing Date, until the Offering Termination. On each Closing Date, offering proceeds for that closing will be disbursed to our company and the respective Bonds will be issued to investors in the offering, or the Bondholders. The offering is being made on a best-efforts basis through JCC. 

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6

 
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Offering Circular contains certain forward-looking statements that are subject to various risks and uncertainties. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "will," "should," "potential," "intend," "expect," "outlook," "seek," "anticipate," "estimate," "approximately," "believe," "could," "project," "predict," or other similar words or expressions. Forward-looking statements are based on certain assumptions, discuss future expectations, describe future plans and strategies, contain financial and operating projections or state other forward-looking information. Our ability to predict results or the actual effect of future events, actions, plans or strategies is inherently uncertain. Although we believe that the expectations reflected in our forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth or anticipated in our forward-looking statements. Factors that could have a material adverse effect on our forward-looking statements and upon our business, results of operations, financial condition, funds derived from operations, cash flows, liquidity and prospects include, but are not limited to, the factors referenced in this Offering Circular, including those set forth below.

When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements in this Offering Circular. Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect our views as of the date of this Offering Circular. The matters summarized below and elsewhere in this Offering Circular could cause our actual results and performance to differ materially from those set forth or anticipated in forward-looking statements. Accordingly, we cannot guarantee future results or performance. Furthermore, except as required by law, we are under no duty to, and we do not intend to, update any of our forward-looking statements after the date of this Offering Circular, whether as a result of new information, future events or otherwise.

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RISK FACTORS

An investment in our Bonds is highly speculative and is suitable only for persons or entities that are able to evaluate the risks of the investment. An investment in our Bonds should be made only by persons or entities able to bear the risk of and to withstand the total loss of their investment. Prospective investors should consider the following risks before making a decision to purchase our Bonds. To the best of our knowledge, we have included all material risks to investors in this section.

Risks Related to the Offering

The Bonds will be unsecured unsubordinated obligations of our company and will rank equally in right of payment with all of our company's other unsecured indebtedness and senior in right of payment to any of our company's future obligations that are by their terms expressly subordinated or junior in right of payment to the Bonds. The Bonds will be effectively subordinated to any of our company's existing or future secured indebtedness to the extent of the value of the assets securing such indebtedness.

The Bonds are obligations exclusively of our company and not of any of its subsidiaries. None of our company's subsidiaries is a guarantor of the Bonds and the Bonds are not required to be guaranteed by any subsidiaries our company may acquire or create in the future. The Bonds are also effectively subordinated to all of the liabilities of our company's subsidiaries, to the extent of their assets, since they are separate and distinct legal entities with no obligation to pay any amounts due under our company's indebtedness, including the Bonds, or to make any funds available to make payments on the Bonds. Our company's right to receive any assets of any subsidiary in the event of a bankruptcy or liquidation of the subsidiary, and therefore the right of our company's creditors to participate in those assets, will be effectively subordinated to the claims of that subsidiary's creditors, including trade creditors, in each case to the extent that our company is not recognized as a creditor of such subsidiary. In addition, even where our company is recognized as a creditor of a subsidiary, our company's rights as a creditor with respect to certain amounts are subordinated to other indebtedness of that subsidiary, including secured indebtedness to the extent of the assets securing such indebtedness.

Our covenants require only a 70% real property equity to principal ratio; therefore, if our trustee were to exercise its remedy to force the sale of our properties, such a sale may not generate sufficient proceeds to repay the aggregate principal amount of the Bonds.

One of our trustee's and Bondholders' principal remedies in the event of a default is to force the sale of the rental properties we acquire, and, to the extent the Forced Sale Agreements are still in effect, to force the sale of the Ridgmar Equity, Lakeview Equity, or any other equity interest subject to a Forced Sale Agreement. Under the indenture we must maintain a ratio of 70% equity (inclusive of those equity interests subject to the Forced Sale Agreements) to the principal amount of outstanding Bonds, subject to our right to cure any deficiency within one hundred twenty (120) days of the occurrence of such deficiency. See "Description of Bonds - Event of Default" for more information. Because the amount of real property equity we are required to maintain will not cover the full principal amount of the Bonds, if we default on the Bonds and our trustee forces a sale of our real property, or exercises its rights under the Forced Sale Agreements, the proceeds of such sales may not be sufficient to fully repay the outstanding Bondholders.

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Subject to specified limitations in the Indenture and as described under "Description of Bonds - Certain Covenants," the Indenture does not contain any provisions that would directly limit our company's ability or the ability of its subsidiaries to incur indebtedness, including indebtedness that would be senior to the Bonds. The only limitation on our company's or its subsidiaries' ability to take on additional debt is the requirement to maintain our equity-to-bond ratio.

Our Bonds are unsecured and the primary remedy in the event of a default will be for our trustee (or sufficient Bondholders) to trigger sales of properties we own, the Ridgmar Equity and Lakeview Equity. Ridgmar's current financing requires that the ownership interest of Ridgmar, directly or indirectly, cannot change without lender's consent. If the ownership changes without lender consent, the respective borrower under the respective loan will be in default. Similarly, Lakeview Square's current financing requires that the direct ownership of Lakeview Square cannot change without lender's consent. If the direct ownership of Lakeview Square changes without lender's consent, the borrower will be in default under the loan. If either of the direct or indirect owners of Ridgmar or Lakeview Square is found to be in default under any loans, your investment will be adversely affected. Lake Mead Crossing was financed using mortgage debt, mezzanine debt and interim debt. The loan documents evidencing both the mortgage debt and mezzanine debt carry prepayment penalties. Further, on newly acquired properties by our company following this Offering, we anticipate using senior secured debt to acquire each new property we purchase. Often senior lender loans secured by real property contain prepayment penalties and/or requirements of defeasance. Any such prepayment penalties or defeasance requirements may reduce the proceeds of any forced sale of our properties or may render such a sale prohibitively expensive. This would materially and adversely affect the repayment of your investment in the event of a default.

Currently, Lake Mead Crossing is our sole asset, and it was purchased using mortgage debt, mezzanine debt and interim debt. Due to prepayment penalties on the mortgage debt and mezzanine debt, we may be unable to pay down a portion of the indebtedness secured by the property.

Our company may use offering proceeds to pay down existing indebtedness secured by Lake Mead Crossing. More specifically, it may be prudent for our company to use offering proceeds to pay down the mezzanine debt held by an affiliate of our company. The mezzanine debt carries an interest rate of 8% and has a current outstanding principal balance of approximately $9,978,500. However, if we prepay the mezzanine debt, we may be required to pay prepayment penalties equal to 12-14% of the principal prepaid. If we are required to pay the prepayment penalty, we may not be able to or may not be willing to pay off that indebtedness. If we do not pay off our mezzanine debt, our debt service obligations may reduce our ability to make payments on the Bonds.

Our company may also use proceeds from this offering to pay down mortgage debt. Lake Mead Partners, LLC is a party to a mortgage loan secured by Lake Mead Crossing. That mortgage debt carries an interest rate of 4% and has a principal of approximately $29,500,000. However, if we prepay that debt, we may be required to pay prepayment penalties equal to 1% of the principal prepaid. If we are required to pay the prepayment penalty, we may not be able to or may not be willing to pay off that indebtedness. If we do not pay off that debt, our debt service obligations may reduce our ability to make payments on the Bonds.

The cash flow indirectly received from Lake Mead Crossing will be significantly impacted by the debt burden on the property.

We financed the purchase of Lake Mead Crossing using no equity and three layers of debt financing (mortgage debt, mezzanine debt and interim debt). We are required to make the debt service payments on each of these loans before making distributions to Bondholders. The debt burden is substantially higher on Lake Mead Crossing due to the amount of debt and the high interest rate on both the mezzanine debt and interim debt. As a result, our ability to make payments to Bondholders when they become due may be adversely affected by the debt burden on Lake Mead Crossing.

We have no minimum offering amount, and if we sell substantially less than all of the Bonds we are offering, our investment objectives may become more difficult to reach.

We have no minimum offering amount. While we believe we will be able to reach our investment objectives regardless of the amount of the raise, it may be more difficult to do so if we sell substantially less than all of the Bonds. Such a result may negatively impact our liquidity and increase our dependence on higher interest debt to acquire target properties. In that event, our investment costs will increase, which may decrease our ability to make payments to Bondholders.

9

Our trustee's remedy to force a sale of Ridgmar Equity  may be limited due to covenants contained in the senior and mezzanine debt secured by Ridgmar.

Ridgmar was purchased with use of senior and mezzanine debt. Terms of each loan provide that the borrower will be in default if the property is transferred, pledged or otherwise encumbered without lender consent. Terms also provide that the borrower will be in default if the ownership interest in the property or the ownership interest of any entity directly or indirectly owning the property changes without lender consent. As a result, it may not be possible or it may be prohibitively expensive to sell the Ridgmar Equity without lender consent.

Neither the Forced Sale Agreements nor the Cash Flow Loan Agreements limit the rights of GK Development's affiliates to sell the Lakeview Equity or the Ridgmar Equity to an unaffiliated third party, nor do they preclude the sale of the real property underlying each of the Lakeview Equity and the Ridgmar Equity.

The Forced Sale Agreements and the Cash Flow Loan Agreements do not limit the rights of the holders of such equity to sell their equity, nor do those agreements preclude a sale of the underlying real properties. In either circumstance we would lose our rights to Cash Flow Loans relative to the interest sold, and the value of the interest sold would no longer be available to support the Equity-Bond Ratio or the repayment of the Bonds in the event the trustee exercised its rights under the Forced Sale Agreements. While we may replace the Lakeview Equity or Ridgmar Equity with equity in other properties, you will not have had the opportunity to evaluate such properties prior to making an investment in the Bonds.

Our trustee shall be under no obligation to exercise any of the rights or powers vested in it by the Indenture at the request, order or direction of any of the Bondholders, pursuant to the provisions of the Indenture, unless such Bondholders shall have offered to the trustee reasonable security or indemnity against the costs, expenses and liabilities that may be incurred therein or thereby.

The Indenture provides that in case an Event of Default (as herein defined) in the Indenture shall occur and not be cured, the trustee will be required, in the exercise of its power, to use the degree of care of a reasonable person in the conduct of his own affairs. Subject to such provisions, the trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any Bondholder, unless the Bondholder has offered to the trustee security and indemnity satisfactory to it against any loss, liability or expense.

Investment Risks

The Bonds will have limited transferability and liquidity.

Prior to this offering, there was no active market for the Bonds. Although we may apply for quotation of the Bonds on an alternative trading system or over the counter market, even if we obtain that quotation, we do not know the extent to which investor interest will lead to the development and maintenance of a liquid trading market. Further, the Bonds will not be quoted on an alternative trading system or over the counter market until after the termination of this offering, if at all. Therefore, investors will be required to wait until at least after the final termination date of this offering for such quotation. The initial public offering price for the Bonds has been determined by us. You may not be able to sell the Bonds you purchase at or above the initial offering price.

Alternative trading systems and over the counter markets, as with other public markets, may from time to time experience significant price and volume fluctuations. As a result, the market price of the Bonds may be similarly volatile, and Bondholders may from time to time experience a decrease in the value of their Bonds, including decreases unrelated to our operating performance or prospects. The price of the Bonds could be subject to wide fluctuations in response to a number of factors, including those listed in this "Risk Factors" section of this Offering Circular.

No assurance can be given that the market price of the Bonds will not fluctuate or decline significantly in the future or that Bondholders will be able to sell their Bonds when desired on favorable terms, or at all. Further, the sale of the Bonds may have adverse federal income tax consequences.

We are a recently formed entity with limited prior operating history and may not be able to successfully operate our business or achieve our investment objectives. We may not be able to conduct our business as described in our plan of operation.

As of the date of this offering circular, we only own one property, Lake Mead Crossing. We are not able to provide you with information to evaluate our additional investments prior to acquisition. We will seek to invest substantially all of the offering proceeds available for investment, after the payment of fees and expenses, in the acquisition of real estate and real estate related investments. We have established criteria for evaluating potential investments. See "Investment Policies of Company" for more information. However, you will be unable to evaluate the transaction terms, location, and financial or operational data concerning the investments before we invest in them. You will have no opportunity to evaluate the terms of transactions or other economic or financial data concerning our investments prior to our investment. You will be relying entirely on the ability of GK Development and its management team to identify suitable investments and propose transactions for GK Development, our sole manager, to oversee and approve. These factors increase the risk that we may not generate the returns that you seek by investing in our Bonds.

The inability to retain or obtain key personnel, property managers and leasing agents could delay or hinder implementation of our investment strategies, which could impair our ability to honor our obligations under the terms of Bonds and could reduce the value of your investment.

Our success depends to a significant degree upon the contributions of GK Development's management team. We do not have employment agreements with any of these individuals nor do we currently have key man life insurance on any of these individuals. If any of them were to cease their affiliation with us or GK Development, GK Development may be unable to find suitable replacements, and our operating results could suffer. We believe that our future success depends, in large part, upon GK Development's property managers' and leasing agents' ability to hire and retain highly skilled managerial, operational and marketing personnel. Competition for highly skilled personnel is intense, and GK Development and any property managers we retain may be unsuccessful in attracting and retaining such skilled personnel. If we lose or are unable to obtain the services of highly skilled personnel, property managers or leasing agents, our ability to implement our investment strategies could be delayed or hindered, and our ability to pay our Bond Service Obligations and repay principal may be materially and adversely affected.

We rely on JCC Advisors, LLC to sell our Bonds pursuant to this offering. If JCC Advisors, LLC is not able to market our Bonds effectively, we may be unable to raise sufficient proceeds to meet our business objectives.

We have engaged JCC Advisors, LLC to act as our Managing Broker-Dealer for this offering, and we rely on JCC Advisors, LLC to use its best efforts to sell the Bonds offered hereby. It would also be challenging and disruptive to locate an alternative Managing Broker-Dealer for this offering. Without improved capital raising, our portfolio will be smaller relative to our general and administrative costs and less diversified than it otherwise would be, which could adversely affect the value of your investment in us.

There are limited covenants to the Indenture.

The Indenture does not directly prevent our company from incurring unsecured indebtedness that is equal or subordinate in right of payment to the Bonds. For that reason, you should not consider the covenants in the Indenture as a significant factor in evaluating whether to invest in the Bonds.

An increase in the level of our outstanding indebtedness, or other events, could have an adverse impact on our business, properties, capital structure, financial condition, results of operations or prospects, which could adversely impact the Bonds. Any such event could also adversely affect our cost of borrowing, limit our access to the capital markets or result in more restrictive covenants in future debt arrangements.

Under certain circumstances, we may redeem the Bonds before maturity, and you may be unable to reinvest the proceeds at the same or a higher rate of return.

We may redeem all or a portion of the Bonds at any time. See "Description of Company's Securities - Optional Redemption" for more information. While we are required to pay certain prepayment premiums on or prior to  September 30, 2021, if redemption occurs, you may be unable to reinvest the money you receive in the redemption at a rate that is equal to or higher than the rate of return on the Bonds.

Risks Related to This Offering and Our Corporate Structure

Because we are dependent upon GK Development and its affiliates to conduct our operations, any adverse changes in the financial health of GK Development or its affiliates or our relationship with them could hinder our operating performance and our ability to meet our financial obligations.

We are dependent on GK Development and its affiliates to manage our operations and acquire and manage our portfolio of real estate assets. Our sole manager, GK Development makes all decisions with respect to the management of our company. GK Development depends upon the fees and other compensation that it receives from us in connection with the purchase, management and sale of our properties to conduct its operations. Any adverse changes in the financial condition of GK Development or our relationship with GK Development could hinder its ability to successfully manage our operations and our portfolio of investments.

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You will have no control over changes in our policies and day-to-day operations, which lack of control increases the uncertainty and risks you face as an investor in our Bonds. In addition, our sole manager and sponsor, GK Development, may change our major operational policies without your approval.

GK Development is responsible for the day-to-day operations of our company and the selection and management of investments and has broad discretion over the use of proceeds from this offering. Accordingly, you should not purchase our Bonds unless you are willing to entrust all aspects of the day-to-day management and the selection and management of investments to GK Development. Specifically, GK Development is controlled by Mr. Garo Kholamian as sole stockholder and sole director, and as a result, he will be able to exert significant control over our operations.  Our company has no board of managers and Mr. Kholamian has exclusive control over the operations of GK Development, Inc. and our company, as our manager. As a result, we are dependent on Mr. Kholamian rather than a group of managers to properly choose investments and manage our company. In addition, GK Development may retain independent contractors to provide various services for our company, and you should note that such contractors will have no fiduciary duty to you or the other Bondholders and may not perform as expected or desired.

Bondholders will have no right to remove our manager or otherwise change our management, even if we are underperforming and not attaining our investment objectives.

Only the members of our company have the right to remove our manager, and only if our manager has made a decision to file a voluntary petition or otherwise initiate proceedings to have it adjudicated insolvent, or to seek an order for relief as debtor under the United States Bankruptcy Code (11 U.S.C. §§ 101 et seq.); to file any petition seeking any composition, reorganization, readjustment, liquidation, dissolution or similar relief under the present or any future federal bankruptcy laws or any other present or future applicable federal, state or other statute or law relative to bankruptcy, insolvency, or other relief for debtors; to seek the appointment of any trustee, receiver, conservator, assignee, sequestrator, custodian, liquidator (or other similar official) of our company or of all or any substantial part of the assets of our company, to make any general assignment for the benefit of creditors of our company, to admit in writing the inability of our company to pay its debts generally as they become due, or to declare or effect a moratorium on our company's debt or to take any action in furtherance of any of the above proscribed actions. Bondholders will have no rights in the management of our company. As an investor in this offering, you will have no ability to remove our manager.

GK Development, our manager and its executive officers and their agents and assigns, will not be liable for, and will be indemnified and held harmless (to the extent of our company's assets) from any loss or damage incurred by them, our company or the members in connection with the business of our company resulting from any act or omission performed or omitted in good faith, which does not constitute fraud, willful misconduct, gross negligence or breach of fiduciary duty. A successful claim for such indemnification could deplete our company's assets by the amount paid. See "General Information as to Our Company - Operating Agreement - Indemnification" below for a detailed summary of the terms of our Operating Agreement. Our Operating Agreement is filed as an exhibit to the Offering Statement of which this Offering Circular is a part.

If we sell substantially less than all of the Bonds we are offering, the costs we incur to comply with the rules of the SEC regarding financial reporting and other fixed costs will be a larger percentage of our net income and may reduce the return on your investment.

We expect to incur significant costs in maintaining compliance with the financial reporting for a Tier II Regulation A issuer and that our management will spend a significant amount of time assessing the effectiveness of our internal control over financial reporting. We do not anticipate that these costs or the amount of time our management will be required to spend will be significantly less if we sell substantially less than all of the Bonds we are offering.

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Risks Related to Conflicts of Interest

We rely on GK Development to identify suitable investment opportunities. We may be buying properties at the same time as other entities that are affiliated with or sponsored by GK Development. Other programs sponsored by GK Development or its affiliates also rely on GK Development, its executive officers and their affiliates for investment opportunities. GK Development has sponsored privately offered real estate programs and may in the future sponsor privately and publicly offered real estate programs that have investment objectives similar to ours. Therefore, GK Development and its affiliates could be subject to conflicts of interest between our company and other real estate programs. Many investment opportunities would be suitable for us as well as other programs. GK Development could direct attractive investment opportunities or tenants to other entities. Such events could result in our investing in properties that provide less attractive returns or getting less attractive tenants, impairing our ability to honor our obligations under the terms of the Bonds and the value of your investment. See "Selection, Retention and Custody of Company's Investments" and "Policies with Respect to Certain Transactions" for more information.

Payment of fees to GK Development and its affiliates will reduce cash available for investment and payment of our Bond Service Obligations.

GK Development and its affiliates, including our officers, face conflicts of interest caused by compensation arrangements with us and other programs sponsored by affiliates of GK Development, which could result in actions that are not in the long term best interests of our Bondholders.

GK Development and its affiliates receive fees from us. These fees could influence GK Development's advice to us, as well as the judgment of the affiliates of GK Development who serve as our officers. Among other matters, the compensation arrangements could affect their judgment with respect to property acquisitions from, or the making of investments in, other programs sponsored by GK Development, which might entitle affiliates of GK Development to disposition fees and other possible fees in connection with its services for the seller. See "Selection, Retention and Custody of Company's Investments" and "Policies with Respect to Certain Transactions" for more information.

Considerations relating to their compensation from other programs could result in decisions that are not in the best interests of our Bondholders, which could hurt our ability to perform our obligations due under the Bonds or result in a decline in the value of your investment.

If the competing demands for the time of GK Development, its affiliates and our officers result in them spending insufficient time on our business, we may miss investment opportunities or have less efficient operations, which could reduce our profitability and impair our ability to honor our obligations under the Bonds.

We do not have any employees. We rely on the employees of GK Development and its affiliates for the day to day operation of our business. The amount of time that GK Development and its affiliates spend on our business will vary from time to time and is expected to be greater while we are raising money and acquiring properties. GK Development and its affiliates, including our officers, have interests in other programs and engage in other business activities. As a result, they will have conflicts of interest in allocating their time between us and other programs and activities in which they are involved. Because these persons have competing interests on their time and resources, they may have conflicts of interest in allocating their time between our business and these other activities. During times of intense activity in other programs and ventures, they may devote less time and fewer resources to our business than are necessary or appropriate to manage our business. We expect that as our real estate activities expand, GK Development will attempt to hire additional employees who would devote substantially all of their time to our business. There is no assurance that GK Development will devote adequate time to our business. If GK Development suffers or is distracted by adverse financial or operational problems in connection with its operations unrelated to us, it may allocate less time and resources to our operations. If any of these things occur, our ability to honor obligations under the Bonds may be adversely affected.

Our subsidiaries have mezzanine debt held by an affiliate of our manager, and there is nothing restricting us from procuring future debt financing from affiliates of our manager.

In order to finance Lake Mead Crossing, we received financing in the form of mezzanine debt from an affiliate of our manager, GK Secured Income IV, LLC, with a current outstanding principal balance of approximately $9,978,500 and interest rate of 8% per annum. We may use offering proceeds to repay this debt. There is nothing restricting us from receiving future debt financing from affiliates of our manager to make future investments. We believe the terms of the current loan are, and any future loans from an affiliate of our manager will be, fair and at market rates for such loans. However, we cannot assure you that a third party unaffiliated with GK Development would not be willing to provide current loan financing on better terms.

Our subsidiaries have interim debt held by our manager, and there is nothing restricting us from procuring future debt financing from our manager.

In order to finance Lake Mead Crossing, we received financing in the form of interim debt from our manager with a current outstanding principal balance of approximately $1,628,000 and interest rate of 7% per annum. We may use offering proceeds to repay this debt. There is nothing restricting us from receiving future debt financing from our manager to make future investments. We believe the terms of the current loan are, and any future loans from our manager will be, fair and at market rates for such loans. However, we cannot assure you that a third party unaffiliated with GK Development would not be willing to provide current loan financing on better terms.

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Risks Related to Investments in Commercial Rental Real Estate

Our operating results may be affected by economic conditions that have an adverse impact on the commercial real estate market in general, and may cause us to be unable to realize appreciation in the value of our commercial real estate properties.

Our operating results are subject to risks generally associated with the ownership of commercial real estate, including, but not limited to changes in general economic conditions, changes in interest rates and the availability of mortgage funds that may make the sale a of commercial real estate difficult. Although we intend to hold our commercial real estate and related investments until such a time as our sole manager, GK Development, determines that a sale or other disposition appears to be advantageous to our overall investment objectives; we cannot predict the various market conditions affecting commercial real estate investments that will exist at any particular time in the future. Because of this uncertainty, we cannot assure you that we will realize any appreciation in the value of our commercial real estate properties.

Competition from other commercial rental properties for tenants could reduce our profitability and impair our ability to honor our obligations under the terms of the Bonds.

The commercial rental property industry is highly competitive. This competition could reduce occupancy levels and revenues at our commercial rental properties, which would adversely affect our operations. We face competition from many sources. We face competition from other commercial rental properties both in the immediate vicinity and in the larger geographic market where our commercial rental properties will be located. Overbuilding of commercial rental properties may occur. If so, this will increase the number of units available and may decrease occupancy and rental rates. In addition, increases in operating costs due to inflation may not be offset by increased rental rates.

Increased construction of similar properties that compete with our commercial rental properties in any particular location could adversely affect the operating results of our commercial rental properties and our cash available to honor our obligations under the terms of the Bonds.

We may acquire commercial rental properties in locations which experience increases in construction of properties that compete with our properties. This increased competition and construction could:

	·	make it more difficult for us to find tenants to lease units in our commercial rental properties;
	·	force us to lower our rental prices in order to lease units in our commercial properties; and/or
	·	substantially reduce our revenues and cash available to honor our obligations under the terms of the Bonds.

We compete with numerous other parties or entities for commercial real estate assets and tenants and may not compete successfully.

We compete with numerous other persons or entities engaged in commercial real estate investment activities, many of which have greater resources than we do. Some of these investors may enjoy significant competitive advantages that result from, among other things, a lower cost of capital and enhanced operating efficiencies. Our competitors may be willing to offer space at rates below our rates, causing us to lose existing or potential tenants.

Many of our investments will be dependent on tenants for revenue, and lease terminations could reduce our revenues from rents, resulting in the decline in the value of your investment.

The underlying value of our commercial properties and the ability to honor our obligations under the terms of the Bonds depend upon the ability of the tenants of our commercial properties to generate enough income to pay their rents in a timely manner, and the success of our investments depends upon the occupancy levels, rental income and operating expenses of our commercial properties and our company. Tenants' inability to timely pay their rents may be impacted by employment and other constraints on their personal finances, including debts, purchases and other factors. These and other changes beyond our control may adversely affect our tenants' ability to make lease payments. In the event of a tenant default or bankruptcy, we may experience delays in enforcing our rights as landlord and may incur costs in protecting our investment and re-leasing the premises. We may be unable to re-lease the premises for the rent previously received. We may be unable to sell a commercial property with low occupancy without incurring a loss. These events and others could impair our ability to honor our obligations under the terms of the Bonds and may also cause the value of your investment to decline.

Our operating results and distributable cash flow depend on our ability to generate revenue from leasing our commercial properties to tenants on terms favorable to us.

Our operating results depend, in large part, on revenues derived from leasing space in our commercial properties. We are subject to the credit risk of our tenants, and to the extent our tenants default on their leases or fail to make rental payments we may suffer a decrease in our revenue. In addition, if a tenant does not pay its rent, we may not be able to enforce our rights as landlord without delays and we may incur substantial legal costs. We are also subject to the risk that we will not be able to lease space in our commercial properties or that, upon the expiration of leases for space located in our commercial properties, leases may not be renewed, the space may not be re-leased or the terms of renewal or re-leasing (including the cost of required renovations or concessions to customers) may be less favorable to us than current lease terms. If vacancies continue for a long period of time, we may suffer reduced revenues which would impair our ability to honor our obligations under the terms of the Bonds. In addition, the resale value of the commercial property could be diminished because the market value of a particular property will depend principally upon the value of the leases of such property. Further, costs associated with commercial real estate investment, such as real estate taxes and maintenance costs, generally are not reduced when circumstances cause a reduction in income from the investment. These events would cause a significant decrease in revenues and could impair our ability to honor our obligations under the terms of the Bonds.

Costs incurred in complying with governmental laws and regulations may reduce our net income and the cash available for distributions.

Our company and the commercial properties we own and expect to own are subject to various federal, state and local laws and regulations relating to environmental protection and human health and safety. Federal laws such as the National Environmental Policy Act, the Comprehensive Environmental Response, Compensation, and Liability Act, the Solid Waste Disposal Act as amended by the Resource Conservation and Recovery Act, the Federal Water Pollution Control Act, the Federal Clean Air Act, the Toxic Substances Control Act, the Emergency Planning and Community Right to Know Act and the Hazard Communication Act and their resolutions and corresponding state and local counterparts govern such matters as wastewater discharges, air emissions, the operation and removal of underground and above-ground storage tanks, the use, storage, treatment, transportation and disposal of solid and hazardous materials and the remediation of contamination associated with disposals. The commercial properties we acquire will be subject to the Americans with Disabilities Act of 1990 which generally requires that certain types of buildings and services be made accessible and available to people with disabilities. These laws may require us to make modifications to our properties. Some of these laws and regulations impose joint and several liability on tenants, owners or operators for the costs to investigate or remediate contaminated properties, regardless of fault or whether the acts causing the contamination were illegal. Compliance with these laws and any new or more stringent laws or regulations may require us to incur material expenditures. Future laws, ordinances or regulations may impose material environmental liability. In addition, there are various federal, state and local fire, health, life-safety and similar regulations with which we may be required to comply, and which may subject us to liability in the form of fines or damages for noncompliance.

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Our commercial properties may be affected by our tenants' activities or actions, the existing condition of land when we buy it, operations in the vicinity of our commercial properties, such as the presence of underground storage tanks, or activities of unrelated third parties. The presence of hazardous substances, or the failure to properly remediate these substances, may make it difficult or impossible to sell or rent such property. Any material expenditures, fines, or damages we must pay will impair our ability to honor our obligations under the terms of the Bonds and may reduce the value of your investment.

Any uninsured losses or high insurance premiums will reduce our net income and the amount of our cash available to honor our obligations under the terms of the Bonds.

Our company will attempt to obtain adequate insurance to cover significant areas of risk to us, as a company, and to our commercial properties. However, there are types of losses at the property level, generally catastrophic in nature, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution or environmental matters, which are uninsurable or not economically insurable, or may be insured subject to limitations, such as large deductibles or co-payments. We may not have adequate coverage for such losses. If any of our commercial properties incur a casualty loss that is not fully insured, the value of our assets will be reduced by any such uninsured loss. In addition, other than any working capital reserve or other reserves we may establish, we have no source of funding to repair or reconstruct any uninsured damaged property. Also, to the extent we must pay unexpectedly large amounts for insurance, we could suffer reduced earnings that would impair our ability to honor our obligations under the terms of the Bonds.

As part of otherwise attractive properties, we may acquire some properties with existing lock out provisions, which may inhibit us from selling a commercial property, or may require us to maintain specified debt levels for a period of years on some properties.

Loan provisions could materially restrict us from selling or otherwise disposing of or refinancing commercial properties. These provisions would affect our ability to turn our investments into cash and thus affect cash available to honor our obligations under the terms of the Bonds, including if the trustee exercised its remedy to force the sale of the commercial properties we acquire. Loan provisions may prohibit us from reducing the outstanding indebtedness with respect to commercial properties, refinancing such indebtedness on a non-recourse basis at maturity, or increasing the amount of indebtedness with respect to such properties.

Loan provisions could impair our ability to take actions that would otherwise be in the best interests of the Bondholders and, therefore, may have an adverse impact on the value of your investment, relative to the value that would result if the loan provisions did not exist. In particular, loan provisions could preclude us from participating in major transactions that could result in a disposition of our assets or a change in control even though that disposition or change in control might be in the best interests of our Bondholders.

If we elect to improve any vacant portions of, or redevelop, our acquired properties, such actions will expose us to additional risks beyond those associated with owning and operating commercial rental properties and could materially and adversely affect us.

We may redevelop one or more of our acquired properties or improve vacant portions of our acquired properties, including the vacant pad sites at Lake Mead Crossing. If we elect to do so, we will be subject to additional risks and our business may be adversely affect by:

Any of these circumstances could give rise to delays in the start or completion of, or could increase the cost of, redeveloping or improving one or more of our acquired properties. We cannot assure you that we will be able to recover any increased costs by raising our lease rates. Additionally, due to the amount of time required for planning, constructing and leasing of redevelopment projects, we may not realize a significant cash return for several years. Furthermore, any of these circumstances could hinder our growth and materially and adversely affect us. In addition, new redevelopment or improvement activities, regardless of whether or not they are ultimately successful, typically require substantial time and attention from management.

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General Risks Related to Real Estate-Related Investments

If we make or invest in mortgage loans as part of our plan to acquire the underlying property, our mortgage loans may be affected by unfavorable real estate market conditions, including interest rate fluctuations, which could decrease the value of those loans and the return on your investment.

If we make or invest in mortgage loans, we will be at risk of defaults by the borrowers on those mortgage loans as well as interest rate risks. To the extent we incur delays in liquidating such defaulted mortgage loans; we may not be able to obtain sufficient proceeds to repay all amounts due to us under the mortgage loan. Further, we will not know whether the values of the properties securing the mortgage loans will remain at the levels existing on the dates of origination of those mortgage loans. If the values of the underlying properties fall, our risk will increase because of the lower value of the security associated with such loans.

Investments in real estate-related securities will be subject to specific risks relating to the particular issuer of the securities and may be subject to the general risks of investing in subordinated real estate securities, which may result in losses to us.

We may invest in real estate related securities of both publicly traded and private real estate companies. Issuers of real estate related equity securities generally invest in real estate or real estate related assets and are subject to the inherent risks associated with real estate related investments discussed in this Offering Circular, including risks relating to rising interest rates.

Real estate-related securities are often unsecured and also may be subordinated to other obligations of the issuer. As a result, investments in real estate-related securities are subject to risks of: (1) limited liquidity in the secondary trading market in the case of unlisted or thinly traded securities; (2) subordination to the prior claims of banks and other senior lenders to the issuer; (3) the operation of mandatory sinking fund or call/redemption provisions during periods of declining interest rates that could cause the issuer to reinvest redemption proceeds in lower yielding assets; (4) the possibility that earnings of the issuer may be insufficient to meet its debt service and distribution obligations and (5) the declining creditworthiness and potential for insolvency of the issuer during periods of rising interest rates and economic slowdown or downturn. These risks may adversely affect the value of outstanding real estate-related securities and the ability of the issuers thereof to repay principal and interest or make distribution payments.

Investments in real estate-related securities may be illiquid, and we may not be able to adjust our portfolio in response to changes in economic and other conditions.

If we invest in certain real estate-related securities that we may purchase in connection with privately negotiated transactions, they will not be registered under the relevant securities laws, resulting in a prohibition against their transfer, sale, pledge or other disposition except in a transaction that is exempt from the registration requirements of, or is otherwise in accordance with, those laws. As a result, our ability to vary our long term stabilized portfolio in response to changes in economic and other conditions may be relatively limited. The subordinated and bridge loans we may purchase will be particularly illiquid investments due to their short life. Moreover, in the event of a borrower's default on an illiquid real estate security, the unsuitability for securitization and potential lack of recovery of our investment could pose serious risks of loss to our investment portfolio.

Delays in restructuring or liquidating non-performing real estate-related securities could reduce our ability to honor our obligations under the Bonds.

If we invest in real estate-related securities, they may become non-performing after acquisition for a wide variety of reasons. Such non-performing real estate investments may require a substantial amount of workout negotiations and/or restructuring, which may entail, among other things, a substantial reduction in the interest rate and a substantial write down of such loan or asset. However, even if a restructuring is successfully accomplished, upon maturity of such real estate security, replacement "takeout" financing may not be available. We may find it necessary or desirable to foreclose on some of the collateral securing one or more of our investments. Intercreditor provisions may substantially interfere with our ability to do so. Even if foreclosure is an option, the foreclosure process can be lengthy and expensive. Borrowers often resist foreclosure actions by asserting numerous claims, counterclaims and defenses, including, without limitation, lender liability claims and defenses, in an effort to prolong the foreclosure action. In some states, foreclosure actions can take up to several years or more to litigate. At any time during the foreclosure proceedings, the borrower may file for bankruptcy, which would have the effect of staying the foreclosure action and further delaying the foreclosure process. Foreclosure litigation tends to create a negative public image of the collateral property and may result in disrupting ongoing leasing and management of the property. Foreclosure actions by senior lenders may substantially affect the amount that we may receive from an investment.

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Your investment return may be reduced if we are required to register as an investment company under the Investment Company Act; if we are subject to registration under the Investment Company Act, we will not be able to continue our business.

Neither we, nor any of our subsidiaries intend to register as an investment company under the Investment Company Act. We expect that our subsidiaries' investments in real estate will represent the substantial majority of our total asset mix, which would not subject us to the Investment Company Act. In order to maintain an exemption from regulation under the Investment Company Act, we intend to engage, through our wholly-owned and majority-owned subsidiaries, primarily in the business of buying real estate, and these investments must be made within a year after this offering ends. If we are unable to invest a significant portion of the proceeds of this offering in properties within one year of the termination of this offering, we may avoid being required to register as an investment company by temporarily investing any unused proceeds in government securities with low returns, which would reduce the cash available for fulfilling our obligations under the Bonds.

We expect that most of our assets will be held through wholly-owned or majority-owned subsidiaries of our company. We expect that most of these subsidiaries will be outside the definition of investment company under Section 3(a)(1) of the Investment Company Act as they are generally expected to hold at least 60% of their assets in real property or in entities that they manage or co-manage that own real property. Section 3(a)(1)(A) of the Investment Company Act defines an investment company as any issuer that is or holds itself out as being engaged primarily in the business of investing, reinvesting or trading in securities. Section 3(a)(1)(C) of the Investment Company Act defines an investment company as any issuer that is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire investment securities having a value exceeding 40% of the value of the issuer's total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis, which we refer to as the 40% test. Excluded from the term "investment securities," among other things, are U.S. government securities and securities issued by majority-owned subsidiaries that are not themselves investment companies and are not relying on the exception from the definition of investment company set forth in Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act. We believe that we, and our subsidiaries, will not fall within either definition of investment company as we intend to invest primarily in real property, through our wholly-owned or majority-owned subsidiaries, the majority of which we expect to have at least 60% of their assets in real property or in entities that they manage or co-manage that own real property. As these subsidiaries would be investing either solely or primarily in real property, they would be outside of the definition of "investment company" under Section 3(a)(1) of the Investment Company Act. We are organized as a holding company that conducts its businesses primarily through its subsidiaries. Both we and our operating partnership intend to conduct our operations so that they comply with the 40% test. We will monitor our holdings to ensure continuing and ongoing compliance with this test. In addition, we believe that neither we nor our subsidiaries will be considered an investment company under Section 3(a)(1)(A) of the 1940 Act because neither we nor the operating partnership will engage primarily or hold itself out as being engaged primarily in the business of investing, reinvesting or trading in securities. Rather, through wholly-owned or majority-owned subsidiaries, we will be primarily engaged in the non-investment company businesses of these subsidiaries.

In the event that the value of investment securities held by the subsidiaries of our company were to exceed 40%, we expect our subsidiaries to be able to rely on the exclusion from the definition of "investment company" provided by Section 3(c)(5)(C) of the Investment Company Act. Section 3(c)(5)(C), as interpreted by the staff of the SEC, requires each of our subsidiaries relying on this exception to invest at least 55% of its portfolio in "mortgage and other liens on and interests in real estate," which we refer to as "qualifying real estate assets" and maintain at least 80% of its assets in qualifying real estate assets or other real estate-related assets. The remaining 20% of the portfolio can consist of miscellaneous assets. What we buy and sell is therefore limited to these criteria. How we determine to classify our assets for purposes of the Investment Company Act will be based in large measure upon no action letters issued by the SEC staff in the past and other SEC interpretive guidance. These no action positions were issued in accordance with factual situations that may be substantially different from the factual situations we may face, and a number of these no-action positions were issued more than ten years ago. Pursuant to this guidance, and depending on the characteristics of the specific investments, certain mortgage loans, participations in mortgage loans, mortgage-backed securities, mezzanine loans, joint venture investments and the equity securities of other entities may not constitute qualifying real estate assets and therefore investments in these types of assets may be limited. No assurance can be given that the SEC will concur with our classification of our assets. Future revisions to the Investment Company Act or further guidance from the SEC may cause us to lose our exclusion from registration or force us to re-evaluate our portfolio and our investment strategy. Such changes may prevent us from operating our business successfully.

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In the event that we, or our subsidiaries, were to acquire assets that could make either our company or the respective subsidiary fall within the definition of investment company under Section 3(a)(1) of the Investment Company Act, we believe that we would still qualify for an exclusion from registration pursuant to Section 3(c)(6). Section 3(c)(6) excludes from the definition of investment company any company primarily engaged, directly or through majority-owned subsidiaries, in one or more of certain specified businesses. These specified businesses include the business described in Section 3(c)(5)(C) of the Investment Company Act. It also excludes from the definition of investment company any company primarily engaged, directly or through majority-owned subsidiaries, in one or more of such specified businesses from which at least 25% of such company's gross income during its last fiscal year is derived, together with any additional business or businesses other than investing, reinvesting, owning, holding, or trading in securities. Although the SEC staff has issued little interpretive guidance with respect to Section 3(c)(6), we believe that we and subsidiaries may rely on Section 3(c)(6) if 55% of the assets of our operating partnership consist of, and at least 55% of the income of our subsidiaries is derived from, qualifying real estate assets owned by wholly-owned or majority-owned subsidiaries of our operating partnership.

To ensure that neither we, nor our subsidiaries, are required to register as an investment company, each entity may be unable to sell assets they would otherwise want to sell and may need to sell assets they would otherwise wish to retain. In addition, we or our subsidiaries may be required to acquire additional income or loss-generating assets that we might not otherwise acquire or forego opportunities to acquire interests in companies that we would otherwise want to acquire. Although we and our subsidiaries intend to monitor our portfolio periodically and prior to each acquisition or disposition, any of these entities may not be able to maintain an exclusion from registration as an investment company. If we or our subsidiaries are required to register as an investment company but fail to do so, the unregistered entity would be prohibited from engaging in our business, and criminal and civil actions could be brought against such entity. In addition, the contracts of such entity would be unenforceable unless a court required enforcement, and a court could appoint a receiver to take control of the entity and liquidate its business.

Risks Associated with Debt Financing

We are permitted to acquire real properties and other real estate-related investments including entity acquisitions by assuming either existing financing secured by the asset or by borrowing new funds. In addition, we may incur or increase our mortgage debt by obtaining loans secured by some or all of our assets to obtain funds to acquire additional investments or to pay our Bond Service Obligations under our Bonds. If we mortgage a property and have insufficient cash flow to service the debt, we risk an event of default which may result in our lenders foreclosing on the properties securing the mortgage.

High levels of debt or increases in interest rates could increase the amount of our loan payments, which could reduce our ability to honor our obligations under the terms of the Bonds.

Our policies do not limit us from incurring debt. High debt levels could cause us to incur higher interest charges, result in higher debt service payments, and may be accompanied by restrictive covenants. Interest we pay reduces cash available to honor our obligations under the terms of the Bonds. Additionally, with respect to any variable rate debt, increases in interest rates may increase our interest costs, which would reduce our cash flow and our ability to honor our obligations under the terms of the Bonds. In addition, if we need to repay debt during periods of rising interest rates, we could be required to liquidate one or more of our investments in properties at times which may not permit realization of the maximum return on such investments and could result in a loss. In addition, if we are unable to service our debt payments, our lenders may foreclose on our interests in the real property that secures the loans we have entered.

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High mortgage rates may make it difficult for us to finance or refinance properties, which could reduce the number of properties we can acquire, our cash flow from operations and restrict our ability to honor our obligations under the terms of the Bonds.

Our ability to acquire properties or to make capital improvements to or remodel properties will depend on our ability to obtain debt or equity financing from third parties or the sellers of properties. If mortgage debt is unavailable at reasonable rates, we may not be able to finance the purchase of properties. If we place mortgage debt on properties, we run the risk of being unable to refinance the properties when the debt becomes due or of being unable to refinance on favorable terms. If interest rates are higher when we refinance the properties, our income could be reduced. We may be unable to refinance properties. If any of these events occur, our cash flow would be reduced. This, in turn, would reduce cash available to honor our obligations under the terms of the Bonds and may hinder our ability to raise additional funds from capital contributions, additional bonds or borrowing more money.

We use mezzanine financing to acquire properties, which increases our expenses and could reduce our ability to honor our obligations under the terms of the Bonds.

Our policies do not limit us from incurring mezzanine debt. Mezzanine debt generally carries higher interest rates and could result in higher debt service payments, and may be accompanied by restrictive covenants. Interest we pay reduces cash available to honor our obligations under the terms of the Bonds. In addition, if we are unable to service our mezzanine debt payments, our mezzanine lenders may foreclose on our ownership interests securing such mezzanine loans. Some of our mezzanine financing may come from affiliates. See "Certain Relationships and Related Transactions – Mezzanine Debt."

Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to honor our obligations under the terms of the Bonds.

When providing financing, a lender may impose restrictions on us that affect our operating policies and our ability to incur additional debt. Loan documents we enter into may contain covenants that limit our ability to further mortgage the property, discontinue insurance coverage, or replace our manager. These or other limitations may limit our flexibility and prevent us from achieving our operating goals. Prepayment penalties or defeasance requirements required by lenders may make it economically infeasible for our trustee to exercise the forced sale remedy regarding our acquired properties.

Our ability to obtain financing on reasonable terms would be impacted by negative capital market conditions.

Recently, domestic and international financial markets have experienced unusual volatility and uncertainty. Although this condition occurred initially within the "subprime" single family mortgage lending sector of the credit market, liquidity has tightened in overall financial markets, including the investment grade debt and equity capital markets. Consequently, there is greater uncertainty regarding our ability to access the credit market in order to attract financing on reasonable terms. Investment returns on our assets and our ability to make acquisitions could be adversely affected by our inability to secure financing on reasonable terms, if at all.

Interest-only indebtedness may increase our risk of default and ultimately may reduce our ability to honor our obligations under the terms of the Bonds.

We may finance our property acquisitions using interest-only mortgage indebtedness. During the interest-only period, the amount of each scheduled payment will be less than that of a traditional amortizing mortgage loan. The principal balance of the mortgage loan will not be reduced (except in the case of prepayments) because there are no scheduled monthly payments of principal during this period. After the interest only period, we will be required either to make scheduled payments of amortized principal and interest or to make a lump sum or "balloon" payment at maturity. These required principal or balloon payments will increase the amount of our scheduled payments and may increase our risk of default under the related mortgage loan. If the mortgage loan has an adjustable interest rate, the amount of our scheduled payments also may increase at a time of rising interest rates. Increased payments and substantial principal or balloon maturity payments will reduce the funds available to honor our obligations under the Bonds because cash otherwise available for payment will be required to pay principal and interest associated with these mortgage loans.

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To hedge against interest rate fluctuations, we may use derivative financial instruments that may be costly and ineffective, may reduce the overall financial benefit of your investment, and may expose us to the credit risk of counterparties.

We may use derivative financial instruments to hedge exposures to interest rate fluctuations on loans secured by our assets and investments in collateralized mortgage-backed securities. Derivative instruments may include interest rate swap contracts, interest rate cap or floor contracts, futures or forward contracts, options or repurchase agreements. Our actual hedging decisions will be determined in light of the facts and circumstances existing at the time of the hedge and may differ from time to time.

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USE OF PROCEEDS

		Maximum Offering
		Amount				Percent
Gross offering proceeds		$	50,000,000				100.00	%
Less offering expenses:
Selling commissions and Managing Broker-Dealer Fee (1)		$	4,000,000				8.00	%
Due Diligence Expense Reimbursements (2)		$	60,000				0.12	%
Organization and offering expenses (3)		$	275,000				0.55	%
Less Promotional Fee (4)		$	940,00				1.88	%
Less Blue-Sky Filing Fees		$	75,000				0.15	%
Amount available for investment (5)		$	44,650,000				89.30	%

______________

 

(3)	Organization and offering expenses include all expenses (other than those listed in the chart) to be paid by us in connection with the offering, including our legal, accounting, printing, mailing and filing fees, charge of our escrow holder, and amounts to reimburse our manager for its portion of the salaries of the employees of its affiliates who provide services to our manager and other costs in connection with administrative oversight of the offering and marketing process and preparing supplemental sales materials, holding educational conferences and attending retail seminars conducted by broker-dealers. As of the date of this Offering Circular, organization and offering expenses total $265,604. Start-up and organization costs will be expensed as incurred and syndication costs will be reflected as a reduction of member's equity and will be allocated to the member's capital accounts upon the sale or liquidation of our company. Our manager will not be reimbursed for the direct payment of such organization and offering expenses that exceed 0.55% of the aggregate gross proceeds of this offering over the life of the offering. We will not reimburse our manager for any portion of the salaries and benefits to be paid to its executive officers named in "Directors and Executive Officers."
(4)	We will pay our manager, a 1.88% promotional fee for its services in organizing and structuring this offering.
(5)	Until required in connection with the acquisition of properties, substantially all of the net proceeds of the offering and, thereafter, any working capital reserves we may have, may be invested in short-term, highly-liquid investments, including government obligations, bank certificates of deposit, short-term debt obligations and interest-bearing accounts. Funds available for investment may be used to acquire or invest in new properties, pay down existing indebtedness (including debt held by affiliates) or for certain development related costs consistent with our business plan. See "Certain Relationships and Related Transactions – Mezzanine Debt" and "Certain Relationships and Related Transactions – Interim Debt" for more details regarding current indebtedness that may be paid down using offering proceeds.
	If we sell substantially less than the maximum offering amount and are unable to acquire properties with the proceeds from this offering and conventional mortgage debt, then we may use all of the proceeds from this offering to pay down and manage our existing debt and future debt used to acquire properties.
	With the proceeds of this offering we may pay down our existing mezzanine debt associated with the acquisition of Lake Mead Crossing. Lake Mead Parent, LLC, the owner of Lake Mead Partners, LLC and Lake Mead Development, LLC received mezzanine debt to purchase Lake Mead Crossing from an affiliate of our manager, GK Secured Income IV, LLC, or GKSI IV. Lake Mead Parent and Lake Mead Development are wholly-owned subsidiaries of our company. Under the promissory note, Lake Mead Parent, LLC and Lake Mead Development, LLC can borrow up to $10,500,000 at 8% interest. The mezzanine loan requires monthly interest payments only. The loan matures on November 12, 2018. Currently, the mezzanine loan has an outstanding principal of approximately $9,978,500. GKSI IV was funded by independent, third party investors. Pursuant to the terms of their investments and the promissory note for the mezzanine loan, if the mezzanine loan is prepaid, which results in GKSI IV being obligated to pay a yield maintenance fee to the members of GKSI IV, Lake Mead Partners, LLC and Lake Mead Development, LLC will be obligated to pay to GKSI IV an amount equal to such yield maintenance fee. If the yield maintenance fee becomes payable (a) during the first year that a member holds a unit in GKSI IV, the yield maintenance fee will be an amount equal to 12% per annum on the repayment amounts for the remainder of such year after the repayment date; (b) during the second year that a member holds a unit, the yield maintenance fee will be an amount equal to 13% per annum on the repayment amounts for the remainder of such year after the repayment date; or (c) during the third year that the member holds a unit, the yield maintenance fee will be an amount equal to 14% per annum on the repayment amounts for the remainder of such year after the repayment date. In the event that the loan is prepaid within the first twelve months, Lake Mead Partners, LLC and Lake Mead Development, LLC would be obligated to pay a prepayment penalty of approximately $2,200,000, in the aggregate. This amount has been measured as of December 31, 2015 using the 12% per annum rate.
	With the proceeds of this offering, we may pay down our existing interim debt associated with the acquisition of Lake Mead Crossing. Lake Mead Partners, LLC received an interim loan from our manager in the amount of $2,608,100 in connection with our acquisition of Lake Mead Crossing. The interim loan carries interest of 7% until the loan is called by our manager. After the loan is called, the interest rate will increase to 8%. Our manager may call the loan at any time and in its sole discretion. Currently, this interim loan has an outstanding principal of approximately $1,628,000.

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PLAN OF DISTRIBUTION

Who May Invest

As a Tier II, Regulation A offering, investors must comply with the 10% limitation to investment in the offering, as prescribed in Rule 251. The only investor in this offering exempt from this limitation is an accredited investor, an "Accredited Investor," as defined under Rule 501 of Regulation D. If you meet one of the following tests you qualify as an Accredited Investor:

	(i)	You are a natural person who has had individual income in excess of $200,000 in each of the two most recent years, or joint income with your spouse in excess of $300,000 in each of these years, and have a reasonable expectation of reaching the same income level in the current year;
	(ii)	You are a natural person and your individual net worth, or joint net worth with your spouse, exceeds $1,000,000 at the time you purchase the Bonds (please see below on how to calculate your net worth);
	(iii)	You are an executive officer or general partner of the issuer or a manager or executive officer of the general partner of the issuer;
	(iv)	You are an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, the Code, a corporation, a Massachusetts or similar business trust or a partnership, not formed for the specific purpose of acquiring the Bonds, with total assets in excess of $5,000,000;
	(v)	You are a bank or a savings and loan association or other institution as defined in the Securities Act, a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended, the Exchange Act, an insurance company as defined by the Securities Act, an investment company registered under the Investment Company Act of 1940, as amended, the Investment Company Act, or a business development company as defined in that act, any Small Business Investment Company licensed by the Small Business Investment Act of 1958 or a private business development company as defined in the Investment Advisers Act of 1940;
	(vi)	You are an entity (including an Individual Retirement Account trust) in which each equity owner is an accredited investor;
	(vii)	You are a trust with total assets in excess of $5,000,000, your purchase of the Bonds is directed by a person who either alone or with his purchaser representative(s) (as defined in Regulation D promulgated under the Securities Act) has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment, and you were not formed for the specific purpose of investing in the Bonds; or
	(viii)	You are a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has assets in excess of $5,000,000.

 

Under Rule 251 of Regulation A, non-accredited, non-natural investors are subject to the investment limitation and may only invest funds which do not exceed 10% of the greater of the purchaser's revenue or net assets (as of the purchaser's most recent fiscal year end). A non-accredited, natural person may only invest funds which do not exceed 10% of the greater of the purchaser's annual income or net worth (please see below on how to calculate your net worth).

Determination of Suitability

The Selling Group Members and registered investment advisors recommending the purchase of Bonds in this offering have the responsibility to make every reasonable effort to determine that your purchase of Bonds in this offering is a suitable and appropriate investment for you based on information provided by you regarding your financial situation and investment objectives. In making this determination, these persons have the responsibility to ascertain that you:

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·

have apparent understanding of:

·

the fundamental risks of the investment;

·

the risk that you may lose your entire investment;

·

the lack of liquidity of our Bonds;

·

the restrictions on transferability of our Bonds; and

·

the tax consequences of your investment.

Relevant information for this purpose will include at least your age, investment objectives, investment experience, income, net worth, financial situation, and other investments as well as any other pertinent factors. The Selling Group Members and registered investment advisors recommending the purchase of Bonds in this offering must maintain, for a six-year period, records of the information used to determine that an investment in Bonds is suitable and appropriate for you.

The Offering

We are offering a maximum of $50,000,000 of Bonds to the public through our Managing Broker-Dealer at a price of $1,000.00 per Bond.

Our manager has arbitrarily determined the selling price of the Bonds and such price bears no relationship to our book or asset values, or to any other established criteria for valuing issued or outstanding Bonds.

Managing Broker-Dealer and Compensation We Will Pay for the Sale of Our Bonds

Our Managing Broker-Dealer will receive selling commissions of 5% of the gross offering proceeds. Our Managing Broker-Dealer also will receive a Managing Broker-Dealer Fee of up to 3% of the aggregate gross offering proceeds as compensation for acting as the Managing Broker-Dealer. Our Managing Broker-Dealer shall be entitled to retain, out of the Managing Broker-Dealer Fee, an amount equal to 0.57% of the gross proceeds of the offering. In addition, our Managing Broker-Dealer may reallow all or a portion of selling commissions to Selling Group Members. Additionally, we have agreed to pay up to $60,000,  in due diligence expense reimbursements to our Managing Broker-Dealer, which it may reallow to participating broker-dealers. Total underwriting compensation to be received by or paid to participating FINRA member broker-dealers, including commissions, Managing Broker-Dealer Fee, and reimbursed due diligence expenses of broker-dealers will not exceed 8.12% of proceeds raised with the assistance of those participating FINRA member broker-dealers.

Set forth below is a table indicating the estimated compensation and expenses that will be paid in connection with the offering to our Managing Broker-Dealer.

We have agreed to indemnify our Managing Broker-Dealer, the Selling Group Members and selected registered investment advisors, against certain liabilities arising under the Securities Act. However, the SEC takes the position that indemnification against liabilities arising under the Securities Act is against public policy and is unenforceable.

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It is illegal for us to pay or award any commissions or other compensation to any person engaged by you for investment advice as an inducement to such advisor to advise you to purchase any of our Bonds; however, nothing herein will prohibit a registered broker-dealer or other properly licensed person from earning a sales commission in connection with a sale of the Bonds.

We may pay reduced or no selling commissions and/or Managing Broker-Dealer Fees in connection with the sale of Bonds in this offering to:

For purposes of the foregoing, "immediate family members" means such person's spouse, parents, children, brothers, sisters, grandparents, grandchildren and any such person who is so related by marriage such that this includes "step-" and "-in-law" relations as well as such persons so related by adoption. In addition, participating brokers contractually obligated to their clients for the payment of fees on terms inconsistent with the terms of acceptance of all or a portion of the selling commissions and/or Managing Broker-Dealer Fees may elect not to accept all or a portion of such compensation. In that event, such Bonds will be sold to the investor at a per Bond purchase price, net of all or a portion of selling commissions and/or Managing Broker-Dealer Fees. All sales must be made through a registered broker-dealer participating in this offering, and investment advisors must arrange for the placement of sales accordingly. The net proceeds to us will not be affected by reducing or eliminating selling commissions and/or Managing Broker-Dealer Fees payable in connection with sales to or through the persons described above. Purchasers purchasing net of some or all of the selling commissions and Managing Broker-Dealer Fees will receive Bonds in principal amount of $1,000 per Bond purchased.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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We anticipate that adequate cash will be generated from operations to fund our operating and administrative expenses, and all continuing debt service obligations, including the Bond Service Obligations. However, our ability to finance our operations is subject to some uncertainties. Our ability to generate working capital is dependent on our ability to attract and retain tenants and the economic and business environments of the various markets in which our properties are located. Our ability to sell our assets is partially dependent upon the state of real estate markets and the ability of purchasers to obtain financing at reasonable commercial rates. In general, we intend to pay debt service from cash flow from operations. If cash flow from operations is insufficient then our Cash Flow Lenders are obliged to make the Cash Flow Loans to us. If we have not generated sufficient cash flow from our operations and other sources, such as from borrowings, including the Cash Flow Loans, we may use funds out of the Debt Service Reserve. Moreover, our manager may change this policy, in its sole discretion, at any time. See "Description of Company's Securities - Certain Covenants" in this Offering Circular for more information.

Potential future sources of capital include secured or unsecured financings from banks or other lenders, establishing additional lines of credit, proceeds from the sale of properties and undistributed cash flow. Note that, currently, we have not identified any additional source of financing, other than the proceeds of this offering, and there is no assurance that such sources of financing will be available on favorable terms or at all.  

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GENERAL INFORMATION AS TO OUR COMPANY

GK Investment Holdings, LLC is a Delaware limited liability company formed on September 14, 2015 that invests in and operates commercial rental properties, leases such properties to multiple tenants, and makes such other real estate related investments as are consistent with its investment objectives and that GK Development, Inc., GK Development, our manager, deems appropriate. Our company, through wholly-owned subsidiaries, owns and operates one such property, Lake Mead Crossing. The office of our company and GK Development are located at 257 East Main Street, Suite 200, Barrington, IL 60010, and the telephone number is (847) 277-9930.

GK Development is an Illinois corporation. GK Development is responsible for managing our company's affairs and for identifying and making acquisitions and dispositions on our company's behalf. GK Development is a commercial real estate acquisition and development company specializing in the acquisition, management and redevelopment of commercial rental properties such as regional malls and neighborhood shopping centers. GK Development controls a portfolio of real estate assets currently valued at over $500,000,000, the majority of which are commercial rental properties.

GK Development's management team is comprised of operation managers who are responsible for the day-to-day operation of GK Development and our company. See "Directors and Executive Officers" for more information on the management team of GK Development and our company.

Operating Agreement

Formation and Purpose

Our company was formed on September 14, 2015. Our company is governed by its operating agreement, dated as of September 14, 2015 and entered into under the laws of the State of Delaware, or the Operating Agreement. Under the Operating Agreement, our company was formed with the intent to acquire, own, redevelop, and operate commercial real estate. Notwithstanding the intended purposes of our company, pursuant to the Operating Agreement, our company is permitted to transact any lawful business not required to be stated specifically in the Operating Agreement and for which limited liability companies may be formed under the Delaware Limited Liability Company Act (Title 6, Subtitle II, Chapter 18), as amended from time to time. See "Risk Factors – Risks Related to this Offering and Our Corporate Structure" for more information.

Management

The management of our company is entrusted solely to GK Development for as long as it remains the sole manager of our company. Only the members of our company have the right to remove our manager, and only if our manager has made a decision to file a voluntary petition or otherwise initiate proceedings to have it adjudicated insolvent, or to seek an order for relief as debtor under the United States Bankruptcy Code (11 U.S.C. §§ 101 et seq.); to file any petition seeking any composition, reorganization, readjustment, liquidation, dissolution or similar relief under the present or any future federal bankruptcy laws or any other present or future applicable federal, state or other statute or law relative to bankruptcy, insolvency, or other relief for debtors; to seek the appointment of any trustee, receiver, conservator, assignee, sequestrator, custodian, liquidator (or other similar official) of our company or of all or any substantial part of the assets of our company, to make any general assignment for the benefit of creditors of our company, to admit in writing the inability of our company to pay its debts generally as they become due, or to declare or effect a moratorium on our company's debt or to take any action in furtherance of any of the above proscribed actions. Bondholders will have no rights in the management of our company.

Under the Operating Agreement, certain powers are reserved for our manager. The approval of our manager is required for the following actions with respect to our company:

Membership

Our company has two classes of units, Class A Units and Class B Units. Fourteen individuals, or the Class A Members, hold all of the Class A Units. Four entities, or the Class B Members, hold all of the Class B Units. Currently, Class A Units and Class B Units constitute 50% of the outstanding membership units and voting power, respectively, each a Membership Interest. Mr. Garo Kholamian owns a 25.519% Membership Interest individually, and he controls an additional 46% through certain Class B Members. As a result, Mr. Garo Kholamian has a beneficial Membership Interest of 71.519%. Mrs. Nancy Kholamian owns a 15.519% Membership Interest individually, and she will control an additional 4% through a certain Class B Member. As a result, Mrs. Nancy Kholamian will have a beneficial Membership Interest of 19.519%.

At such time as the Initial Forced Sale Agreements have been terminated, or the Conversion Date, Class B Units will be converted into Class A Units at a ratio of four (4) Class A Units for each Class B Unit converted. After the Conversion Date, there will be no Class B Units, the entities formerly holding Class B Units will hold an 80% Membership Interest, and the individuals holding Class A Units prior to the Conversion Date will hold a 20% Membership Interest. After the Conversion Date, Mr. Garo Kholamian will own a 10.209% Membership Interest, individually, and he will control an additional 73.612% through certain Class B Members. As a result Mr. Garo Kholamian will have a beneficial Membership Interest of 83.821%. Mrs. Nancy Kholamian will own a 6.209% Membership Interest after the Conversion Date, and she will control an additional 6.401% through a certain Class B Member. As a result, Mrs. Nancy Kholamian will have a beneficial Membership Interest of 12.610%.

Membership provides certain protections and rights to the members. Pursuant to the Operating Agreement, upon approval by GK Development and recommendation to the members, a majority of the members, either present and voting at a meeting duly called and held or acting by written consent shall be required to approve the following actions with respect to our company:

Indemnification

Our Operating Agreement limits the liability of our manager, GK Development and certain other persons or entities. See "Limitations on Liability" in this Offering Circular for more information.

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POLICY WITH RESPECT TO CERTAIN ACTIVITIES

Issuance of Additional Securities

Except for those actions specifically discussed in this Offering Circular, the issuing of the Bonds will not impose any restrictions on the ability of our company to issue additional bonds, debt, preferred equity or other security. The Bonds will be our direct, senior unsecured obligations and will:

See "Description of Bonds - Certain Covenants" for more information.

Reports

We will furnish the following reports to each Bondholders:

Reporting Requirements under Tier II of Regulation A. Following this Tier II, Regulation A bond offering, we will be required to comply with certain ongoing disclosure requirements under Rule 257 of Regulation A. We will be required to file: an annual report with the SEC on Form 1-K; a semi-annual report with the SEC on Form 1-SA; current reports with the SEC on Form 1-U; and a notice under cover of Form 1-Z. The necessity to file current reports will be triggered by certain corporate events, similar to the ongoing reporting obligation faced by issuers under the Exchange Act, however the requirement to file a Form 1-U is expected to be triggered by significantly fewer corporate events than that of the Form 8-K. Parts I & II of Form 1-Z will be filed by us if and when we decide to and are no longer obligated to file and provide annual reports pursuant to the requirements of Regulation A.

Annual Reports. As soon as practicable, but in no event later than one hundred twenty (120) days after the close of our fiscal year, ending December 31^st, our manager will cause to be mailed or made available, by any reasonable means, to each Bondholder as of a date selected by our manager, an annual report containing financial statements of our company for such fiscal year, presented in accordance with GAAP, including a balance sheet and statements of operations, Company equity and cash flows, with such statements having been audited by an accountant selected by our manager. Our manager shall be deemed to have made a report available to each Bondholder as required if it has either (i) filed such report with the SEC via its Electronic Data Gathering, Analysis and Retrieval (EDGAR) system and such report is publicly available on such system or (ii) made such report available on any website maintained by our company and available for viewing by the Bondholders.

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INVESTMENT POLICIES OF OUR COMPANY

Investment Strategy

Our company focuses on investments in existing, income-producing, commercial rental real estate that will benefit from GK Development's real estate operating and leasing skills, including releasing, redevelopment, renovation, refinancing, repositioning and sale. Our company, through wholly-owned subsidiaries, currently owns and operates one such property, Lake Mead Crossing. GK Development intends to actively participate in the management of our company's properties, rather than holding the properties as passive investments. The objective of this strategy is to maximize cash flow and property value at the time of final disposition. By doing this, GK Development maximizes the potential of our company to pay its obligations under the Bonds as they become due. Holding periods for our company's investments will vary depending on a number of factors.

Our company's investment strategy is focused primarily on rental-based commercial real estate that has current income. Targeted property types include but are not limited to established regional malls, neighborhood shopping centers, power centers, grocery-anchored centers, lifestyle centers, office buildings, multi-family and other commercial properties. The selection of solid investment opportunities is based, in part, upon the properties' potential for enhancement in cash flows and market value.

Our company has acquired, and plans to acquire, properties on a leveraged basis, operate them in a manner to maximize their value (including execution of any of the aforementioned strategies), and then sell or refinance them to realize a return.

Our company generally will purchase individual properties, but in some cases it may consider the purchase of a portfolio of properties. Neither the Operating Agreement nor the Indenture limits the amount our company may invest in a single property; however, GK Development intends to diversify our company's real estate investments.

Our company does not intend to act as a land developer in that it is has no intent to invest in, acquire, own, hold, lease, operate, manage, maintain, redevelop, sell or otherwise use undeveloped real property or "raw land," as a ground up development. Our company, engaging in its commercial real estate activities, may have the opportunity to acquire commercial real property which includes unimproved pad sites for future development and lease-up opportunities. In such instances, our company will retain the unimproved pad sites for ground lease, build-to-suit and/or sell opportunities. In situations where our company has the opportunity to acquire commercial real property which includes a large tract of developable raw land, the developable raw land will not be acquired by our company, but by an entity affiliated with GK Development. Our company may choose to redevelop real property for an alternative use than intended when originally acquired or developed.

Other than Lake Mead Crossing, our company does not own any properties, nor has it identified any properties which are probable for acquisition, as of the date of this Offering Circular.

Dispositions

We may from time to time dispose of properties if, based upon management's periodic review of our portfolio, our manager determines such action would be in our best interest. In addition, we may elect to enter into joint ventures or other types of co-ownership with respect to properties that we already own, either in connection with acquiring interests in other properties or from investors to raise equity capital.

Leverage of Properties

Our company borrows money to acquire its properties when GK Development determines that it is advantageous to our company. By operating on a leveraged basis, our company expects that it will have more funds available for investment in properties and other investments. This will allow our company to make more investment than would otherwise be possible, resulting in a more diversified portfolio. Although our company expects its liability for the repayment of indebtedness to be limited to the value of the specific property securing the liability and the rents or profits derived therefrom, our company's use of leverage increases the risk of default on the mortgage payments and a resulting foreclosure of a particular property. See "Risk Factors" for more information.

Our company may borrow any amount necessary to enable our company to invest the proceeds of this offering in properties. Our company intends to borrow up to the maximum amount available from its lenders, thus increasing the number of properties that our company can acquire as well as enhancing the yield to our company. GK Development's experience with prior real estate programs with similar commercial rental properties has been that lender's preferences will be to make loans with an approximately 60-70% loan-to-value ratio in respect to the properties in the class targeted by our company. Therefore, our company believes that its aggregate loan-to-value on its portfolio will be approximately 65%. Lake Mead Crossing has been assessed an aggregate value of approximately $48,400,000. The $42,065,000 purchase price of Lake Mead Crossing was funded by: (i) mortgage loans aggregating $32,200,000; (ii) a mezzanine loan of $8,530,000 and (iii) interim loans aggregating $1,335,000. Although our company's current loan-to-value ratio is approximately 90.3%, using the current outstanding balances for all loans, our company plans to use proceeds from this offering to repay the mezzanine and interim loans. If our company repays these loans in their entirety, its loan-to-value ratio will be reduced to 66.5%. With respect to the Lake Mead Crossing acquisition, management determined the fair value of the total identifiable net assets with the assistance of a third party appraiser using the income approach methodology of valuation. The income approach methodology utilizes the remaining non-cancelable lease terms as defined in lease agreements, market rental data, and discount rates. Key assumptions used includes a capitalization rate of 7.5%, growth rates for market rentals of 3.0%, and a discount rate of 9.0%. The fair value is allocated to the acquired tangible assets (consisting of land, buildings and improvements), and acquired intangible assets and liabilities (consisting of above-market and below-market leases, leasing commissions and acquired in-place leases).

GK Development may choose to refinance our company's properties during the term of a loan. The benefits of refinancing may include an increased cash flow resulting from reduced debt service requirements, thus an increase in cash available for payments under the Bonds, and an increase in property ownership if refinancing proceeds are reinvested in real estate.

Investments in Real Estate Mortgages

Our business objectives emphasize equity investments in commercial rental property. Although we do not presently intend to invest in mortgages or deeds of trust, other than in a manner that is ancillary to an equity investment, we may elect, in our discretion, to invest in mortgages and other types of real estate interests, including, without limitation, participating or convertible mortgages. Investments in real estate mortgages run the risk that one or more borrowers may default under certain mortgages and that the collateral securing certain mortgages may not be sufficient to enable us to recoup our full investment.

Investment in Other Securities

Other than as described above, we do not intend to acquire any additional securities such as bonds, preferred stocks or common stock, for investment purposes. From time to time, we may elect to acquire properties through co-investment or joint venture structures. In such an instance, we intend to structure such investments so that we maintain control of the property owning subsidiary.

Investment Company Act Considerations

	·	pursuant to Section 3(a)(1)(A), it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities; and
	·	pursuant to Section 3(a)(1)(C), it is engaged, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire "investment securities" having a value exceeding 40% of the value of its total assets on an unconsolidated basis. "Investment securities" does not include U.S. Government securities and securities of majority-owned subsidiaries that are not themselves investment companies and are not relying on the exception from the definition of investment company under Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act.

 

We will classify our assets for purposes of the Investment Company Act, including our 3(c)(5)(C) exclusion, in large measure upon no-action positions taken by the SEC staff in the past. These no-action positions were issued in accordance with factual situations that may be substantially different from the factual situations we may face, and a number of these no-action positions were issued more than ten years ago. No assurance can be given that the SEC staff will concur with our classification of our assets. In addition, the SEC staff may, in the future, issue further guidance that may require us to re-classify our assets for purposes of the Investment Company Act. If we are required to re-classify our assets, we may no longer be in compliance with the exclusion from the definition of an investment company provided by Section 3(c)(5)(C) of the Investment Company Act.

For purposes of determining whether we satisfy the 55%/80% tests, we will classify the assets in which we invest as follows:

We will classify our investments in construction loans as qualifying assets, as long as the loans are "fully secured" by an interest in real estate at the time we originate or acquire the loan. With respect to construction loans that are funded over time, we will consider the outstanding balance (i.e., the amount of the loan actually drawn) as a qualifying asset. The SEC staff has not issued no-action letters specifically addressing construction loans. If the SEC staff takes a position in the future that is contrary to our classification, we will modify our classification accordingly.

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Consistent with no-action positions taken by the SEC staff, we will consider any participation in a whole mortgage loan, including B-Notes, to be a qualifying real estate asset only if: (1) we have a participation interest in a mortgage loan that is fully secured by real property; (2) we have the right to receive our proportionate share of the interest and the principal payments made on the loan by the borrower, and our returns on the loan are based on such payments; (3) we invest only after performing the same type of due diligence and credit underwriting procedures that we would perform if we were underwriting the underlying mortgage loan; (4) we have approval rights in connection with any material decisions pertaining to the administration and servicing of the loan and with respect to any material modification to the loan agreements; and (5) if the loan becomes non-performing, we have effective control over the remedies relating to the enforcement of the mortgage loan, including ultimate control of the foreclosure process, by having the right to: (a) appoint the special servicer to manage the resolution of the loan; (b) advise, direct or approve the actions of the special servicer; (c) terminate the special servicer at any time with or without cause; (d) cure the default so that the mortgage loan is no longer non-performing; and (e) purchase the senior loan at par plus accrued interest, thereby acquiring the entire mortgage loan.

We will base our treatment of any other investments as qualifying assets and real estate-related assets on the characteristics of the underlying collateral and the particular type of loan (including whether we have foreclosure rights with respect to those securities or loans that have underlying real estate collateral) and we will make these determinations in a manner consistent with guidance issued by the SEC staff.

A change in the value of any of our assets could negatively affect our ability to maintain our exemption from regulation under the Investment Company Act. To maintain compliance with the Section 3(c)(5)(C) exclusion, we may be unable to sell assets we would otherwise want to sell and may need to sell assets we would otherwise wish to retain. In addition, we may have to acquire additional assets that we might not otherwise have acquired or may have to forego opportunities to acquire assets that we would otherwise want to acquire and would be important to our investment strategy.

To the extent that the SEC staff provides more specific guidance regarding any of the matters bearing upon the definition of investment company and the exceptions to that definition, we may be required to adjust our investment strategy accordingly. Additional guidance from the SEC staff could provide additional flexibility to us, or it could further inhibit our ability to pursue the investment strategy we have chosen.

DESCRIPTION OF REAL ESTATE

We currently own one property, Lake Mead Crossing.  

Lake Mead Crossing

Our company acquired, through wholly-owned subsidiaries, (i) Lake Mead Parent, LLC, the sole member of Lake Mead Partners, LLC, the owner of a portion of Lake Mead Crossing, and (ii) Lake Mead Development, LLC, the owner of a portion of Lake Mead Crossing, a portion of a retail power center known as Lake Mead Crossing, located in Henderson Nevada for a purchase price aggregating $42,065,000, excluding prorations. Lake Mead Crossing, which is comprised of approximately 222,000 square feet of retail space leased to numerous tenants under leases expiring on various dates between 2018 and 2022, was purchased on November 12, 2015 from an unaffiliated, third party seller. The purchase was funded as follows: (i) mortgage loans aggregating $32,200,000; (ii) a mezzanine loan of $8,530,000 and (iii) interim loans aggregating $1,335,000.

Lake Mead Crossing consists of approximately 220,000 square feet of commercial retail rental space, 30,000 square feet, comprise of two concrete pads, and 45,000 square feet of vacant land. Of the approximately 220,000 square feet of space, approximately 185,000 square feet, or 84.27%, is currently leased. Lake Mead Crossing is part of a larger shopping center with over 400,000 square feet of commercial rental space. Lake Mead Crossing is shadow anchored by a Target consisting of 152,000 square feet of space not owned by our company. Lake Mead Crossing's largest tenants are Ross, Dress for Less, a retail apparel store, PetSmart, an animal retail and pet care store, Marshalls, a retail apparel store, and Big Lots, a miscellaneous retail store. Each of these stores occupies 10% or more of Lake Mead Crossing. Lake Mead Crossing was constructed in 2008. For more details, related to Lake Mead Crossing its tenants and their leases, see below. 

Proposed program for the renovation, improvement or development of such properties.

With respect to Lake Mead Parent, LLC, the commercial rental property is comprised of 155,140 square feet of rentable space for lease to multiple tenants. As of December 31, 2015, 150,460 square feet (96.98%) was leased to eleven tenants under various leases expiring on various dates between 2019 and 2020. We plan to lease the vacant retail space and currently, we have no present plans for the improvement of the property.

With respect to Lake Development, LLC, the commercial rental property is comprised of 66,044 square feet of rentable space for lease to multiple tenants. As of December 31, 2015, 34,700 square feet (52.54%) was leased to three tenants under various leases expiring on various dates between 2018 and 2022. We plan to lease the vacant retail space. In addition, the commercial rental property includes unimproved pad sites which Lake Mead Development, LLC intends to secure one or more tenants for a build-to-suit opportunity. These could include stand-alone retailers, medical office facilities and/or restaurants. Currently, no tenants have been secured and there are no present plans for the improvement of the property.

Lake Mead Crossing is a multi-tenant retail shopping center located in downtown Henderson, Nevada and management believes it has excellent visibility, access and daytime traffic. The neighborhood is dominated by retail and other commercial development and is also provided with an abundant residential development properties located in subdivisions scattered throughout the market area. Additionally, Lake Mead Crossing is located in the path of substantial residential growth. Cadence, is a 2,200 acre planned residential development located 0.2 miles from Lake Mead Crossing. Under the plan for Cadence, multiple developers are expected to build up to 13,250 homes.

A summary of the key competitive conditions are as follows:

Key Tenant Lease Terms

Below is a summary of the key lease terms of tenants that currently occupy at least 10% of our gross leasable area, or GLA.

Schedule of Lease Expirations

The following chart shows the number of leases expiring at Lake Mead Crossing in each of the next ten years and the square footage, percentage of overall leased space, and annual rent relating to such expiring leases.

Components Upon Which Depreciation Are Taken

The following chart provides the details of how tax depreciation is calculated at Lake Mead Crossing.

Realty Taxes

The following chart provides the details of how taxes are assessed at Lake Mead Crossing.

The total operating revenue for Lake Mead Crossing for the year ended December 31, 2014 was approximately $3,395,000, certain operating expenses excluding depreciation, amortization, management fees, interest expense, amortization of in-place leases, and amortization of above- and below-market leases was approximately $638,000, and revenue in excess of certain operating expenses was approximately $2,757,000 each determined in accordance with GAAP and excludes financial  information attributable to the portions of Lake Mead Crossing owned by unaffiliated entities.

Lake Mead Crossing was financed using 100% debt in the form of mortgage debt, mezzanine debt and interim debt. In connection with the financing of Lake Mead Crossing, the following loans are outstanding:

Lake Mead Crossing contains two unimproved pad sites, each being 30,000 square feet, for future development and lease-up opportunities. Our company may use the unimproved pad sites for ground lease, build-to-suit and/or sell opportunities.

Properties Subject to the Initial Forced Sale Agreements

The real estate described below is not owned by our company. However, the equity interests in the real estate described below are subject to the Initial Forced Sale Agreements and the proceeds of any sale of such equity interests may be used to repay our Bondholders.

Lakeview Square

Our company does not own Lakeview Square, but equity interests that indirectly own a percentage of the property owner's parent will be subject to an Initial Forced Sale Agreement. See "Description of Bonds - Certain Covenants" for more information. This description should be used by potential investors to determine the risks of our company defaulting under terms of the Indenture and the Bonds.

Lakeview Square is located at the intersection of Interstate 94 and Michigan State Route 66, approximately four miles south of downtown Battle Creek, Michigan. As of the 2010 census, Battle Creek had a population of approximately 52,000, while the Battle Creek metropolitan area, comprising all of Calhoun county, had a population of approximately 136,000. The headquarters of Kellogg Company, a multinational food company, is located in Battle Creek.

Lakeview Square has approximately 551,228 square feet of space, of which 291,593 square feet is owned by the following anchor tenants: Sears, JCPenney and Macy's. Of the remaining leasable space, 79.49% is currently under lease. The total operating revenue for Lakeview Square for the year ended December 31, 2015 was approximately $5,017,200 net operating income before depreciation and amortization was approximately $2,032,000, and net income was approximately $779,000, each determined in accordance with GAAP and excludes financial information attributable to the portion of Lakeview Square owned by unaffiliated third parties. Lakeview Square's largest tenants, by annual rent for the fiscal year ended December 31, 2015, were: Barnes & Noble, GKC Theaters, Dunham's Sports, Encore Shoes, Fred Meyer Jewelers, Buffalo Wild Wings, Buckle, Zales Jewelers, and Pearle Vision.

The Lakeview Equity consists of the equity interests of Garo Kholamian and GKPI I Partners (Lakeview Square), LLC, or GKPI, in GK Preferred Income Investments I, LLC, or GK Preferred, the sole member of Lakeview Square, LLC, or the Owner, the sole owner of Lakeview Square. As of the date of this Offering Circular, Garo Kholamian and GKPI collectively own 72% of GK Preferred.  Mr. Kholamian and GKPI will provide Cash Flow Loans in amounts up to all of the distributions they collectively receive from the Lakeview Equity. No distributions were made to Mr. Kholamian or GKPI from Lakeview Equity during the fiscal year ended December 31, 2014. In the fiscal year ended December 31, 2015, Mr. Kholamian and GKPI received distributions totaling $1,364,211 from GK Preferred.

Lakeview Equity, as 72% owner of GK Preferred, sole owner of Owner, owner of Lakeview Square, indirectly owns 72% of the overall equity in Lakeview Square, which is also the amount of its equity in Lakeview Square available under the Initial Forced Sale Agreements. As determined by management relying, in part, upon an independent, third party appraisal dated of August 15, 2015, the overall equity in Lakeview Square has a value of $10,211,927; which provides $7,352,587 of equity available of the value of the underlying real property under the Initial Forced Sale Agreements.

Ridgmar is a commercial rental mall located just minutes from downtown Fort Worth, Texas on Interstate 30. This strategic location leaves Ridgmar positioned to draw from an overall trade area of 741,841 people in some 267,078 households, with a median age of 35.1 years. The population in this market is projected to grow 9.82% over the next five years. This in conjunction with the relatively high average household incomes ($63,983) in the area provides Ridgmar with a significant customer base.

Ridgmar consists of 1,235,515 square feet of space, of which 836,675 square feet is owned by the following anchor tenants: Dillard's, JCPenney, Macy's and Neiman Marcus. Of the remaining space, 74.66% is currently under lease. The total operating revenue for Ridgmar Mall for the year ended December 31, 2015 was approximately $11,365,500 net operating income before depreciation and amortization was approximately $4,844,900, and net loss was approximately $148,700, each determined in accordance with GAAP and excludes financial information attributable to the portion of Ridgmar owned by unaffiliated third parties.

The Ridgmar Equity consists of the 100% equity interest of 1551 Kingsbury Partners, L.L.C. in 1551 Kingsbury Partners Senior Mezz, LLC, Senior Mezz, the sole owner of 1551 Kingsbury Partners SPE, LLC, the Owner, possessing a 12.5% TIC ownership interest in Ridgmar. As a result, 1551 Kingsbury Partners, L.L.C will provide Cash Flow Loans in amounts up to all of the distributions it receives from the Ridgmar Equity. In the fiscal years ended December 31, 2014 and 2015, 1551 Kingsbury Partners, L.L.C. received distributions totaling $193,537 and $48,781, respectively, from Ridgmar Equity.

Ridgmar Equity, as sole owner of Senior Mezz, sole owner of Owner, possessing a 12.5% TIC ownership interest in Ridgmar, indirectly owns 12.5% of the overall equity in Ridgmar, which is also the amount of its equity in Ridgmar available under the Initial Forced Sale Agreements. As determined by management relying, in part, upon an independent, third party appraisal dated August 15, 2015 of the value of the underlying real property, the overall equity in Ridgmar has a value of $39,891,089; which provides $4,986,386 of equity attributable to our company and available under the Initial Forced Sale Agreements.  

Limitations of the Forced Sale Agreements

Ridgmar was financed using senior and mezzanine debt. Terms of each loan provide that the borrower will be in default if the ownership interest in Ridgmar, directly or indirectly, changes without lender consent. Under the loan documents, if the borrower is in default, the lender has the ability to accelerate the debt and charge certain penalties payable by the borrower. As a result, it may not be possible or it may be prohibitively expensive to sell Ridgmar Equity without lender consent. See “Risk Factors – Risks Related to the Offering – The Effectiveness of our trustee's remedy to force a sale of the Ridgmar Equity, Lakeview Equity and call the loans of Lake Mead Crossing and future acquired properties may be limited by covenants and penalties in debt documents for senior mortgages secured by the respective underlying properties” and “Risk Factors – Risks Related to the Offering – Our trustee's remedy to force a sale of Ridgmar may be limited due to covenants contained in the senior and mezzanine debt secured by those properties”for more information.

The Forced Sale Agreements do not limit the rights of the holders of Ridgmar Equity and Lakeview Equity to sell their equity, nor do those agreements preclude a sale of the underlying real properties. If this were to occur, the value of the interest sold would no longer be available to support the Equity-Bond Ratio or the repayment of the Bonds in the event the trustee exercised its rights under the Forced Sale Agreements. While we may replace the Lakeview Equity or Ridgmar Equity with equity in other properties, you will not have had the opportunity to evaluate such properties prior to making an investment in the Bonds. See “Risk Factors – Risks Related to the Offering –Neither the Forced Sale Agreements nor the Cash Flow Loan Agreements limit the rights of GK Development's affiliates to sell the Lakeview Equity or the Ridgmar Equity to an unaffiliated third party, nor do they preclude the sale of the real property underlying each of the Lakeview Equity and the Ridgmar Equity” for more information. 

We may enter into Additional Forced Sale Agreements with affiliates. If we do, we anticipate the terms of the Forced Sale Agreements to be substantially similar to the ones related to Ridgmar and Lakeview Square. As a result, the risks associated with the Initial Forced Sale Agreements are expected to also exist with any Additional Forced Sale Agreements, including but not limited to (i) the inability to  effectively sell the affected equity due to restrictions contained in the underlying senior and mezzanine debt documents , (ii) the ability of the property owner to sell the property without the consent of the trustee, and (iii) the ability of the holder of the affected equity to sell the affected equity without the consent of the trustee.

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MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS

The following discussion is a summary of certain material U.S. federal income tax consequences relevant to the purchase, ownership and disposition of the Bonds, but does not purport to be a complete analysis of all potential tax consequences. The discussion is based upon the Code, current, temporary and proposed U.S. Treasury regulations issued under the Code, or collectively the Treasury Regulations, the legislative history of the Code, IRS rulings, pronouncements, interpretations and practices, and judicial decisions now in effect, all of which are subject to change at any time. Any such change may be applied retroactively in a manner that could adversely affect a holder of the Bonds. This discussion does not address all of the U.S. federal income tax consequences that may be relevant to a holder in light of such holder's particular circumstances or to holders subject to special rules, including, without limitation:

In addition, this discussion is limited to persons that purchase the Bonds in this offering for cash and that hold the Bonds as "capital assets" within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address the effect of any applicable state, local, non-U.S. or other tax laws, including gift and estate tax laws.

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As used herein, "U.S. Holder" means a beneficial owner of the Bonds that is, for U.S. federal income tax purposes:

	·	an individual who is a citizen or resident of the United States;
	·	a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
	·	an estate, the income of which is subject to U.S. federal income tax regardless of its source; or
	·	a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more U.S. persons that have the authority to control all substantial decisions of the trust, or (2) has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.

If an entity treated as a partnership for U.S. federal income tax purposes holds the Bonds, the tax treatment of an owner of the entity generally will depend upon the status of the particular owner and the activities of the entity. If you are an owner of an entity treated as a partnership for U.S. federal income tax purposes, you should consult your tax advisor regarding the tax consequences of the purchase, ownership and disposition of the Bonds.

We have not sought and will not seek any rulings from the IRS with respect to the matters discussed below. There can be no assurance that the IRS will not take a different position concerning the tax consequences of the purchase, ownership or disposition of the Bonds or that any such position would not be sustained.

THIS SUMMARY OF MATERIAL FEDERAL INCOME TAX CONSIDERATIONS IS FOR GENERAL INFORMATION ONLY AND DOES NOT CONSTITUTE TAX ADVICE. PROSPECTIVE INVESTORS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE APPLICATION OF THE TAX CONSIDERATIONS DISCUSSED BELOW TO THEIR PARTICULAR SITUATIONS, POTENTIAL CHANGES IN APPLICABLE TAX LAWS AND THE APPLICATION OF ANY STATE, LOCAL, FOREIGN OR OTHER TAX LAWS, INCLUDING GIFT AND ESTATE TAX LAWS, AND ANY TAX TREATIES.

U.S. Holders

Interest

U.S. Holder generally will be required to recognize and include in gross income any stated interest as ordinary income at the time it is paid or accrued on the Bonds in accordance with such holder's method of accounting for U.S. federal income tax purposes.

Sale or Other Taxable Disposition of the Bonds

A U.S. Holder will recognize gain or loss on the sale, exchange, redemption (including a partial redemption), retirement or other taxable disposition of a Bond equal to the difference between the sum of the cash and the fair market value of any property received in exchange therefore (less a portion allocable to any accrued and unpaid stated interest, which generally will be taxable as ordinary income if not previously included in such holder's income) and the U.S. Holder's adjusted tax basis in the Bond. A U.S. Holder's adjusted tax basis in a Bond (or a portion thereof) generally will be the U.S. Holder's cost therefore decreased by any payment on the Bond other than a payment of qualified stated interest. This gain or loss will generally constitute capital gain or loss. In the case of a non-corporate U.S. Holder, including an individual, if the Bond has been held for more than one year, such capital gain may be subject to reduced federal income tax rates. The deductibility of capital losses is subject to certain limitations.

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Medicare Tax

Certain individuals, trusts and estates are subject to a Medicare tax of 3.8% on the lesser of (i) "net investment income", or (ii) the excess of modified adjusted gross income over a threshold amount. Net investment income generally includes interest income and net gains from the disposition of Bonds, unless such interest payments or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). U.S. Holders are encouraged to consult with their tax advisors regarding the possible implications of the Medicare tax on their ownership and disposition of Bonds in light of their individual circumstances.

Information Reporting and Backup Withholding

A U.S. Holder may be subject to information reporting and backup withholding when such holder receives interest and principal payments on the Bonds or proceeds upon the sale or other disposition of such Bonds (including a redemption or retirement of the Bonds). Certain holders (including, among others, corporations and certain tax-exempt organizations) generally are not subject to information reporting or backup withholding. A U.S. Holder will be subject to backup withholding if such holder is not otherwise exempt and:

	·	such holder fails to furnish its taxpayer identification number, or TIN, which, for an individual is ordinarily his or her social security number;
	·	the IRS notifies the payor that such holder furnished an incorrect TIN;
	·	in the case of interest payments such holder is notified by the IRS of a failure to properly report payments of interest or dividends;
	·	in the case of interest payments, such holder fails to certify, under penalties of perjury, that such holder has furnished a correct TIN and that the IRS has not notified such holder that it is subject to backup withholding; or
	·	such holder does not otherwise establish an exemption from backup withholding.

A U.S. Holder should consult its tax advisor regarding its qualification for an exemption from backup withholding and the procedures for obtaining such an exemption, if applicable. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a U.S. Holder will be allowed as a credit against the holder's U.S. federal income tax liability or may be refunded, provided the required information is furnished in a timely manner to the IRS.

Non-U.S. Holders are encouraged to consult their tax advisors.

 
DESCRIPTION OF BONDS

This description sets forth certain terms of the Bonds that we are offering pursuant to this Offering Circular. In this section, we use capitalized words to signify terms that are specifically defined in the Indenture to be dated as of the first Closing Date, by and between us and UMB Bank, as trustee, or the trustee. This section contains definitions of certain capitalized terms that are used herein. We refer you to the Indenture for a full disclosure of all such terms, as well as any other capitalized terms used in this Offering Circular for which no definition is provided.

Because this section is a summary, it does not describe every aspect of the Bonds or the Indenture. We urge you to read the Indenture because that document and not this summary defines your rights as a Bondholders. Please review a copy of the Indenture. The Indenture is filed as an exhibit to the offering statement, of which this offering circular is a part, at www.sec.gov. You may also obtain a copy of the Indenture from us without charge. See "Where You Can Find More Information" for more information. You may also review the Indenture at the trustee's corporate trust office at 1670 Broadway, Denver, Colorado 80202.

Ranking

The Bonds will be our direct, senior unsecured obligations and will:

	·	rank equally with each other and with all of our existing and future unsecured and unsubordinated indebtedness outstanding from time to time;
	·	rank senior to all of our future indebtedness that by its terms is expressly subordinate to the Bonds;
	·	effectively rank junior to any of our future secured indebtedness to the extent of the value of the assets securing such indebtedness; and
	·	effectively be structurally subordinated to all existing and future indebtedness and other obligations of each of our subsidiaries, including the claims of mortgage lenders holding secured indebtedness, as to the specific property receiving each lender's mortgage and other secured indebtedness.

 

Manner of Offering

The offering is being made on a best-efforts basis through JCC Advisors, LLC, our Managing Broker-Dealer, as well as other selected dealers, or Selling Group Members. Our Managing Broker-Dealer, nor any Selling Group Member, will be required to purchase any of our Bonds.

Interest and Maturity

The Bonds will mature on  September 30, 2022 and will bear interest at a fixed rate of 7% per annum. Interest on the Bonds will be paid monthly beginning on the 15^th day of the second month following the first Closing Date.

THE REQUIRED INTEREST PAYMENTS AND PRINCIPAL PAYMENT ARE NOT A GUARANTY OF ANY RETURN TO YOU NOR ARE THEY A GUARANTY OF THE RETURN OF YOUR INVESTED CAPITAL. While our company is required to make the Interest Payments and Principal Payment as described in the Indenture and above, we do not intend to establish a sinking fund to fund such payments. Therefore, our ability to honor these obligations will be subject to our ability to generate sufficient cash flow or procure additional financing in order to fund those payments. If we cannot generate sufficient cash flow or procure additional financing to honor these obligations, we may be forced to sell some or all of our company's assets to fund the payments, or we may not be able to fund the payments in their entirety or at all. If we cannot fund the above payments, Bondholders will have claims against us with respect to such violation.

Optional Redemption

We may redeem the Bonds in whole or in part, at any time. If we plan to redeem our Bonds, we are required to give notice of redemption not less than 30 days nor more than 60 days prior to any date of redemption, the Redemption Date, to each Bondholder's address appearing in the securities register maintained by the trustee. In the event we elect to redeem less than all of the Bonds, the particular Bonds to be redeemed will be selected by the trustee by such method as the trustee shall deem fair and appropriate.

If the Redemption Date is on or before  September 30, 2019, our company will pay the Bondholder an amount equal to 1.02 times the Price to Public for each Bond being redeemed at that time. If the Redemption Date is after  September 30, 2019 but on or before  September 30, 2020, our company will pay the Bondholder 1.015 times to the Price to Public for each Bond redeemed at that time. If the Redemption Date is after  September 30, 2020 but on or before  September 30, 2021, our company will pay the Bondholder 1.01 times to the Price to Public for each Bond redeemed at that time. If the Redemption Date is after  September 30, 2021, our company will pay the Bondholder the Price to Public for each Bond redeemed at that time.

Merger, Consolidation or Sale

We may consolidate or merge with or into any other corporation, and we may sell, lease or convey all or substantially all of our assets to any corporation, provided that the successor entity, if other than us:

	·	is organized and existing under the laws of the United States of America or any United States, or U.S., state or the District of Columbia; and
	·	assumes all of our obligations to perform and observe all of our obligations under the Bonds and the Indenture;

 

and provided further that no Event of Default (as defined below) shall have occurred and be continuing.

Except as described below under "- Certain Covenants - Offer to Repurchase Upon a Change of Control Repurchase Event," the Indenture does not provide for any right of acceleration in the event of a consolidation, merger, sale of all or substantially all of the assets, recapitalization or change in our stock ownership. In addition, the Indenture does not contain any provision which would protect the Bondholders against a sudden and dramatic decline in credit quality resulting from takeovers, recapitalizations or similar restructurings.

Certain Covenants

Equity-Bond Ratio and Forced Sale Agreements

The Bonds will be unsecured; however, our company will be required to comply with the Equity-Bond Ratio covenant by owning real property with aggregate equity value of at least 70% of the outstanding principal of the Bonds, or the Equity-Bond Ratio. The equity subject to Forced Sale Agreements will also be included in the Equity-Bond Ratio. For properties acquired, directly or indirectly, by our company, the equity value for purposes of the Equity-Bond Ratio will initially be the equity invested into the applicable property. Each acquired property will be required to be appraised, by an independent third party appraiser, annually during the term of the Bonds, and, following any such appraisal, our company's equity value from a newly appraised property will be adjusted to equal the appraised value of the property less the outstanding indebtedness secured by such property and multiplied by our company's ownership interest in the applicable property, in the event we acquire a partial interest in any property.

For the first year following the first Closing Date, our company will be a party to the Initial Forced Sale Agreements with UMB Bank and certain of GK Development's affiliates. Under those agreements, the trustee will be able to force the sale of the Ridgmar Equity and Lakeview Equity as a remedy if our company defaults on the Bonds, the trustee (or the Bondholders if permitted) accelerates the maturity of the Bonds, and our company is otherwise unable to pay off the Bonds. During the pendency of the Forced Sale Agreements, the value of the Ridgmar Equity and Lakeview Equity, $4,986,386 and $7,352,587, as determined by management relying, in part, upon independent, third party appraisals dated August 15, 2015, of the underlying real property, and any other equity interest subject to a Forced Sale Agreement shall be included in the equity of our company for the purposes of calculating the Equity-Bond Ratio. The Initial Forced Sale Agreements shall terminate automatically on the first anniversary of the first Closing date of this offering, and will also terminate if the real property underlying the applicable Initial Forced Sale Agreement is sold to a third party. However, the parties to the Initial Forced Sale Agreements may extend them at their discretion (subject to approval of the trustee). In order to comply with the Equity-Bond Ratio, our company may, with the trustee's reasonable approval, enter into Additional Forced Sale Agreements, in substantially similar form as the Initial Forced Sale Agreements, with affiliates of GK Development.

As with all non-payment defaults, our company will have a 120-day cure period to cure any breach of the Equity-Bond Ratio covenant before a default may be declared relative to such covenant. Any cure may be made by either acquiring additional property or entering into Additional Forced Sale Agreements.

Cash Coverage Ratio and Cash Flow Loans

While any Bonds remain outstanding, the Indenture provides that our company will maintain cash and cash equivalents, as defined by GAAP, equal to at least 120% of our company's Bond Service Obligations for a period of three (3) months. Our company will be required to make monthly reports of its cash and cash equivalents to the trustee to ensure compliance with the Cash Coverage Ratio covenant. If our company falls out of compliance with the Cash Coverage Ratio covenant, it will have 120 days to cure such non-compliance.

Our company has entered into loan agreements with the holders of the Lakeview Equity and the Ridgmar Equity, or the Cash Flow Lenders, whereby the Cash Flow Lenders are obligated to advance our company up to the entirety of the monthly distributions to them from the Lakeview Equity and Ridgmar Equity, in order to enable our company to meet the Cash Coverage Ratio covenant. Any such advances will be represented by a promissory note, subordinate to the Bonds, that will bear interest at the then in effect IRS imputed interest rate and will have the same maturity date as the Bonds. We will be required to represent to the Cash Flow Lenders (or any of them) that we require such a loan in order to comply with the Cash Coverage Ratio covenant in order to  receive such a loan. Prior to the Cash Flow Loans' maturity date, our company may, but is not required, to make payments on the Cash Flow Loans at its discretion. At its discretion, our company may enter into substantial similar arrangements with other affiliates of GK Development in order to provide cash to our company to ensure compliance with the Cash Coverage Ratio covenant; provided, that the repayment of any loan from an affiliate of GK Development to our company shall be subordinate to the Bonds.

Limitations of the Forced Sale Agreements and Cash Flow Loans

Ridgmar was financed using senior and mezzanine debt. Terms of each loan provide that the borrower will be in default if the ownership interest in Ridgmar, directly or indirectly, changes without lender consent. Under the loan documents, if the borrower is in default, the lender has the ability to accelerate the debt and charge certain penalties payable by the borrower. As a result, it may not be possible or it may be prohibitively expensive to sell Ridgmar Equity without lender consent. See “Risk Factors – Risks Related to the Offering – The Effectiveness of our trustee's remedy to force a sale of the Ridgmar Equity, Lakeview Equity and call the loans of Lake Mead Crossing and future acquired properties may be limited by covenants and penalties in debt documents for senior mortgages secured by the respective underlying properties” and “Risk Factors – Risks Related to the Offering – Our trustee's remedy to force a sale of Ridgmar may be limited due to covenants contained in the senior and mezzanine debt secured by those properties”for more information. Properties that we acquire in the future may have restrictions.  

The Forced Sale Agreements and the Cash Flow Loan Agreements do not limit the rights of the holders of Ridgmar Equity and Lakeview Equity to sell their equity, nor do those agreements preclude a sale of the underlying real properties. In either circumstance, we would lose our rights to cash flow loans relative to the interest sold, and the value of the interest sold would no longer be available to support the Equity-Bond Ratio or the repayment of the Bonds in the event the trustee exercised its rights under the Forced Sale Agreements. While we may replace the Lakeview Equity or Ridgmar Equity with equity in other properties, you will not have had the opportunity to evaluate such properties prior to making an investment in the Bonds. See “Risk Factors – Risks Related to the Offering –Neither the Forced Sale Agreements nor the Cash Flow Loan Agreements limit the rights of GK Development's affiliates to sell the Lakeview Equity or the Ridgmar Equity to an unaffiliated third party, nor do they preclude the sale of the real property underlying each of the Lakeview Equity and the Ridgmar Equity” for more information.

We may enter into Additional Forced Sale Agreements with affiliates. If we do, we anticipate the terms of the Forced Sale Agreements to be substantially similar to the ones related to Ridgmar and Lakeview Square. As a result, the risks associated with the Initial Forced Sale Agreements are expected to also exist with any Additional Forced Sale Agreements, including but not limited to (i) the inability effectively sell the affected equity due to restrictions contained in the underlying senior and mezzanine debt documents, (ii) the ability of the property owner to sell the property without the consent of the trustee, and (iii) the ability of the holder of the affected equity to sell the affected equity without the consent of the trustee.

If a Change of Control Repurchase Event occurs, unless we have exercised our option to redeem the Bonds as described under "- Optional Redemption," we will make an offer to each Bondholder to repurchase all or any part of that Bondholder's Bonds at a repurchase price equal to 1.02 times the Price to Public if on or before  September 30, 2019, 1.015 times the Price to Public if such event occurs after  September 30, 2019 but on or before the  September 30, 2020, 1.01 times the Price to Public if such event occurs after  September 30, 2020 but on or before  September 30, 2021, and at the Price to Public if such event occurs after  September 30, 2021, plus any accrued and unpaid interest to, but not including the repurchase date. 

Reports

We will furnish the following reports to each Bondholder:

Reporting Requirements under Tier II of Regulation A. Following this Tier II, Regulation A bond offering, we will be required to comply with certain ongoing disclosure requirements under Rule 257 of Regulation A. We will be required to file: an annual report with the SEC on Form 1-K; a semi-annual report with the SEC on Form 1-SA; current reports with the SEC on Form 1-U; and a notice under cover of Form 1-Z. The necessity to file current reports will be triggered by certain corporate events, similar to the ongoing reporting obligation faced by issuers under the Exchange Act, however the requirement to file a Form 1-U is expected to be triggered by significantly fewer corporate events than that of the Form 8-K. Parts I & II of Form 1-Z will be filed by us if and when we decide to and are no longer obligated to file and provide annual reports pursuant to the requirements of Regulation A.

Annual Reports. As soon as practicable, but in no event later than one hundred twenty (120) days after the close of our fiscal year, ending December 31st, our manager will cause to be mailed or made available, by any reasonable means, to each Bondholder as of a date selected by our manager, an annual report containing financial statements of our company for such fiscal year, presented in accordance with GAAP, including a balance sheet and statements of operations, Company equity and cash flows, with such statements having been audited by an accountant selected by our manager. Our manager shall be deemed to have made a report available to each Bondholder as required if it has either (i) filed such report with the SEC via its Electronic Data Gathering, Analysis and Retrieval (EDGAR) system and such report is publicly available on such system or (ii) made such report available on any website maintained by our company and available for viewing by the Bondholders. 

Insurance

We will, and will cause each of our subsidiaries to, keep all of its insurable property insured against loss or damage at least equal to their then full insurable value with insurers of recognized responsibility and having an A.M Best policy holder's rating of not less than A-V.

Payment of Taxes and Other Claims

We will pay or discharge or cause to be paid or discharged, before the same shall become delinquent: (i) all taxes, assessments and governmental charges levied or imposed upon us or any subsidiary or upon the income, profits or property of us or any subsidiary; and (ii) all lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien upon the property of us or any subsidiary; provided, however, that we shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings or for which we have set apart and maintain an adequate reserve.

Prior to this offering, there has been no public market for the Bonds. We may apply for quotation of the Bonds on an alternative trading system or over the counter market beginning after the final closing of this offering. However, even if the Bonds are listed or quoted, no assurance can be given as to (1) the likelihood that an active market for the Bonds will develop, (2) the liquidity of any such market, (3) the ability of Bondholders to sell the Bonds or (4) the prices that Bondholders may obtain for any of the Bonds. No prediction can be made as to the effect, if any, that future sales of the Bonds, or the availability of the Bonds for future sale, will have on the market price prevailing from time to time. Sales of substantial amounts of the Bonds, or the perception that such sales could occur, may adversely affect prevailing market prices of the Bonds. See "Risk Factors — Investment Risks."

Event of Default

The following are Events of Default under the Indenture with respect to the Bonds:

Annually, within 120 days following December 31^st while the Bonds are outstanding, we will furnish to the trustee a written statement of certain of our officers certifying that to their knowledge we are in compliance with the Indenture, or else specifying any Default and the nature and status thereof. We will also deliver to the trustee a written notification of any uncured Default within 30 days after we become aware of such uncured Default.

Remedies if an Event of Default Occurs

Subject to any respective Cure Period, if an Event of Default occurs and is continuing, the trustee or the Bondholders of not less than a majority in aggregate principal amount of the Bonds may declare the principal thereof, premium, if any, and all unpaid interest thereon to be due and payable immediately. In such event, the trustee will have the right force us to sell any real property held by us or any subsidiary of ours that we have the unilateral right to cause it to sell its assets. We will be required to contribute the proceeds of any such sale to the repayment of the Bonds. With respect to subsidiaries for which we do not have the unilateral right to sell their assets (for example, if we acquire a property in a joint venture), the trustee has the right to force us to sell our equity in such subsidiary in order to repay the Bonds.

If the sale of our assets is insufficient to repay all obligations under the Bonds, then the trustee will also have the right to force the sale of any equity interest or property then subject to a Forced Sale Agreement.

Limitations of the Forced Sale Agreements

Ridgmar was financed using senior and mezzanine debt. Terms of each loan provide that the borrower will be in default if the ownership interest in Ridgmar, directly or indirectly, changes without lender consent. Under the loan documents, if the borrower is in default, the lender has the ability to accelerate the debt and charge certain penalties payable by the borrower. As a result, it may not be possible or it may be prohibitively expensive to sell Ridgmar Equity without lender consent. See “Risk Factors – Risks Related to the Offering – The Effectiveness of our trustee's remedy to force a sale of the Ridgmar Equity, Lakeview Equity and call the loans of Lake Mead Crossing and future acquired properties may be limited by covenants and penalties in debt documents for senior mortgages secured by the respective underlying properties” and “Risk Factors – Risks Related to the Offering – Our trustee's remedy to force a sale of Ridgmar may be limited due to covenants contained in the senior and mezzanine debt secured by those properties”for more information.

The Bondholders of a majority in principal amount of the outstanding Bonds may waive any default with respect to that series, except a default:

The Bondholders of a majority in principal amount of the outstanding Bonds may direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee with respect to the Bonds, provided that (i) such direction is not in conflict with any rule of law or the Indenture, (ii) the trustee may take any other action deemed proper by the trustee that is not inconsistent with such direction and (iii) the trustee need not take any action that might involve it in personal liability or be unduly prejudicial to the Bondholders not joining therein. Subject to the provisions of the Indenture relating to the duties of the trustee, before proceeding to exercise any right or power under the Indenture at the direction of the Bondholders, the trustee is entitled to receive from those Bondholders security or indemnity satisfactory to the trustee against the costs, expenses and liabilities which it might incur in complying with any direction.

A Bondholder will have the right to institute a proceeding with respect to the Indenture or for any remedy under the Indenture, if:

However, the Bondholder has the right, which is absolute and unconditional, to receive payment of the principal of and interest on such Bond on the respective due dates (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment and such rights shall not be impaired without the consent of such Bondholder.

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On December 23, 2015, the Secretary of State of the State of Illinois entered a consent order censuring GK Development, Inc., our manager, and Garo Kholamian, the President, sole director and sole shareholder of our manager for violation of the Illinois Securities Act related to certain previous private offerings.  The Illinois Secretary of State stated in the order that it is not intended to trigger or otherwise result in disqualification from the usage of Regulation A or Regulation D.  The Illinois Secretary of State alleged failures of risk disclosure in those offerings based upon the actual performance of those programs and to disclose certain prior performance information considered required by the Illinois Secretary of State.  Our manager and Mr. Kholamian disputed these allegations but, nevertheless, on December 22, 2015 stipulated to the entry of the consent order to settle this matter without any admission of the veracity of the alleged facts or conclusions of law of the Illinois Secretary of State. 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Beneficial Owners (5% or more)

Security Ownership of Management

___________________

(1)     Held by Garo Kholamian individually and through the Garo Kholamian Revocable Trust, the Kholamian Family Insurance Trust, and GK Corporate Partners, LLC.

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DIRECTORS AND EXECUTIVE OFFICERS

Executive Officers

Set forth below is biographical information for GK Development's executive officers.

Garo Kholamian, age 58, is the President, sole Director and sole shareholder of GK Development. Since the formation of the GK Development in 1995, Mr. Kholamian and his affiliates have acquired and developed over 120 million square feet of commercial property including apartments, office and commercial rental. Prior to forming GK Development, Mr. Kholamian was Senior Vice President of Development for Homart Development Co., the real estate development arm of Sears Roebuck, specializing in regional shopping malls, power centers and office buildings. At Homart, Mr. Kholamian was responsible for site selection, negotiation and project development and management of Homart's community shopping centers, including over 2.2 million square feet of commercial rental space in the Midwest and Florida. Before managing the development of these centers, Mr. Kholamian assisted in the development of 1.5 million square feet of regional malls and 1.1 million square feet of office space throughout the U.S. for Homart. Mr. Kholamian received his Master's Degree in Business Management from Loyola University of Chicago in 1985 and his Bachelor's Degree in Architecture from the Illinois Institute of Technology in 1981. He is a member of the International Council of Shopping Centers and a licensed real estate broker in Illinois.

Sherry Mast, age 48, is the Principal - Leasing at GK Development. Ms. Mast joined GK Development in 1997 and, prior to taking over leasing, established property management and financial systems for GK Development. Ms. Mast is responsible for leasing of the company's entire portfolio and manages outside broker relationships, as well as day-to-day leasing activity. Prior to joining GK Development, Ms. Mast was Marketing Manager for Karp's, a nationally recognized bakery supply company. There she was responsible for new product development, creating bakery supply solutions for national retailers. From joining that company in 1992, Ms. Mast was involved in the creation of new products and worked closely with national clients, including Starbucks Coffee, Wal-Mart, Dominick's Finer Foods and American Superstores. Prior to joining Karp's, Ms. Mast was Quality Assurance Associate for Hyatt Hotel Corporation from 1989 through 1992. There she assisted in improving customer relations and maintaining Hyatt's industry-leading service standards. Ms. Mast received her Bachelor's Degree in Corporate Communications from Northern Illinois University. She is a member of the International Council of Shopping Centers and is a registered real estate salesperson in Illinois.

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Gregory C. Kveton, age 60, is the Principal - Development at GK Development. He joined GK Development in 2002 to spearhead the company's ground-up development team by identifying opportunities in emerging growth markets. He also directs new development and ongoing capital construction. During his tenure, GK Development has specialized in projects that deliver steady, increasing value for GK Development's investors, tenants and community. Previously, Greg was Senior Vice President - Operations with fiscal and operation responsibility for GK Development's portfolio. Before he joined GK Development, he was Vice President of Asset Management in the commercial rental group of Lend Lease Real Estate Investments, where he was responsible for project oversight for power center development in the western United States. At Homart Development Company, the real estate development arm of Sears Roebuck, Greg was National Director of the Community Centers group, where he oversaw asset and property management for the company's power and community centers portfolio. Greg graduated from Iowa State University with a Bachelor of Science degree in Business Administration, and holds both the Certified Shopping Center Manager and Certified Retail Property Executive designations from the International Council of Shopping Centers (ICSC).

Susan Dewar, age 58, is the Senior Vice President - Acquisitions at GK Development. Susan joined GK Development in 2004, enriching the team with her extensive background in commercial, office and industrial real estate. Susan is responsible for reviewing and assessing each potential acquisition for GK Development. She has been actively involved in the acquisition and financing of several regional malls, including a portfolio of four malls totaling more than 1.74 million square feet. She was previously involved in obtaining financing for several of GK Development's properties, and maintains a presence in both the local and national banking communities. Previously, Susan was Vice President of Real Estate for the Elmer J. Krauss Organization, at the time, the largest industrial real estate owner in the State of Florida. While with Krauss, she oversaw more than 30 acquisition/disposition transactions in a 3-year period, including all due diligence and financing. In addition, she was responsible for all property and asset management for the entire portfolio. Susan attended the University of Houston, focusing on Business and Real Estate, and is a licensed real estate broker in the State of Florida. She is a member of the International Council of Shopping Centers (ICSC), a Certified Property Manager, and a 20-year member of the Institute of Real Estate Management.

Matt Leiter, age 43, is the Senior Vice President - Equity Markets at GK Development. Matt manages legacy investments and its investors. Matt also structures new investment products for distribution to Broker Dealers, Family Offices, and Institutional investors. Matt manages and monitors the financial performance of the company's four equity funds and seven single-asset real estate investment offerings. He has also selected and managed GK's National Sales, Key Accounts and Wholesaling team, leading them to more than $50 million raised in less than two-years, allowing for the purchase or recapitalization of more than $150 million of real estate assets. Before joining GK Development, he was General Manager at the Leiter Group, a Florida real estate development firm with a focus on mixed-use multi-family public/private projects. There he led in managing and developing projects with a combined value of over $300 million. He also has experience as the Chief Operating Officer of a European software company and as a sales manager at Caterpillar, Inc., where he worked for six years. Matt received his Bachelor of Science degree from the University of Illinois at Champaign - Urbana and his Masters of Business Administration from the University of Chicago.

Melissa Pielet, age 51, is the Principal - Finance at GK Development. Melissa arranges financing for all of GK Development's acquisitions and developments. She procures first mortgage debt, mezzanine debt and preferred equity for GK Development's portfolio. This includes construction loans, bridge loans and permanent loans. She is also responsible for ongoing communication with lenders on all GK-owned assets. Before joining the GK Development team, Melissa was a Principal and Executive Vice President of finance for 26 years with HSA Commercial. There she was responsible for financing the development and acquisition of over 67 million square feet of real estate with a market value of over $2.5 billion. This included industrial, commercial, office, medical office, senior living, hotels and vacant land. During her tenure at HSA, Melissa oversaw communication with lenders for all ongoing needs related to HSA Commercial's 16 million square feet of owned assets, including negotiation various loan restructures to benefit ownership. She also arranged financing for various third party borrowers, including all of GK Development's acquisitions and developments. Melissa attended the University of Wisconsin, studying real estate and marketing. She is a member of the International Council of Shopping Centers (ICSC) and is licensed as a real estate broker in the state of Illinois.

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RaeAnn Overberg, age 52, is the Senior Vice President - Operations at GK Development. RaeAnn brings the GK Development more than 20 years' experience in leasing, facilities management, marketing, and site selection of commercial and commercial rental properties. Currently, RaeAnn oversees operations and has fiscal responsibility for GK Development's portfolio of more than 6 million square feet of space. She is responsible for managing revenue and capital projections, physical property condition, and shopper marketing programs to meet the changing needs of the portfolio. RaeAnn was previously Director of Specialty Leasing; in 2004 she initiated the specialty leasing program for GK Development's regional mall acquisitions. Before joining GK Development, RaeAnn worked for DHL Airways as Director of Corporate Services. She has also held positions in office building development and mall management for Homart Development Company, the real estate development arm of Sears Roebuck. RaeAnn graduated from DePauw University in Greencastle, Indiana with a Bachelor of Arts degree in Communications and Business. She is a member of the International Council of Shopping Centers (ICSC) and holds both their Certified Shopping Center Manager designation and Certified Retail Executive designation.

Michael Sher, age 58, is the Chief Financial Officer of GK Development Inc. Michael joined GK bringing over 30 years of experience including public accounting, specializing in audit, tax and consulting services within the real estate industry. Michael has a wide breadth of audit experience including managing the audits of large real estate portfolios encompassing all asset classes; privately offered real estate syndications; and entities with troubled loan and real estate-owned portfolios. Prior to joining GK, Michael was a partner with McGladrey LLP and served as the Chief Financial Officer of a multifamily real estate developer, Mesa Development Corporation based in Chicago, Illinois. Mesa Development has developed over $400,000,000 of multifamily real estate. As CFO, Michael was responsible for all aspects of the finance department including the reporting process, investor and lender relations, treasury, tax and compliance. Michael's education includes a Bachelor of Science in Accounting and a Master's of Science in Taxation from the University of the Witwatersrand, Johannesburg, South Africa. Michael is a Certified Public Accountant and member of American Institute of Certified Public Accountants and the Illinois CPA Society.

Directors

EXECUTIVE COMPENSATION

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Forced Sale Agreements

For the first year following the first Closing Date, our company will be a party to the Initial Forced Sale Agreements with UMB Bank and certain of GK Development's affiliates. Under those agreements, the trustee will be able to force the sale of the Ridgmar Equity and Lakeview Equity as a remedy if our company defaults on the Bonds, the trustee (or the bondholders if permitted) accelerates the maturity of the Bonds, and our company is otherwise unable to pay off the Bonds. During the pendency of the Forced Sale Agreements, the value of the Ridgmar Equity and Lakeview Equity, $4,986,386 and $7,352,587, as determined by management relying, in part, upon independent, third party appraisals dated August 15, 2015, of the value of the underlying real properties, and any other equity interest subject to a Forced Sale Agreement shall be included in the equity of our company for the purposes of calculating the Equity-Bond Ratio. The Initial Forced Sale Agreements shall terminate automatically on the first anniversary of the first Closing Date of this offering, and will also terminate if the real property underlying the applicable Initial Forced Sale Agreement is sold to a third party. However, the parties to the Initial Forced Sale Agreements may extend them at their discretion (subject to approval of the trustee). In order to comply with the Equity-Bond Ratio, our company may, with the trustee's reasonable approval, enter into Additional Forced Sale Agreements, in substantially similar form as the Initial Forced Sale Agreements, with affiliates of GK Development.

Ridgmar was financed using senior and mezzanine debt. Terms of each loan provide that the borrower will be in default if the ownership interest in Ridgmar, directly or indirectly, changes without lender consent. Under the loan documents, if the borrower is in default, the lender has the ability to accelerate the debt and charge certain penalties payable by the borrower. As a result, it may not be possible or it may be prohibitively expensive to sell Ridgmar Equity without lender consent. See “Risk Factors – Risks Related to the Offering – The Effectiveness of our trustee's remedy to force a sale of the Ridgmar Equity, Lakeview Equity and call the loans of Lake Mead Crossing and future acquired properties may be limited by covenants and penalties in debt documents for senior mortgages secured by the respective underlying properties” and “Risk Factors – Risks Related to the Offering – Our trustee's remedy to force a sale of Ridgmar may be limited due to covenants contained in the senior and mezzanine debt secured by those properties”for more information.

The Forced Sale Agreements do not limit the rights of the holders of such equity to sell their equity, nor do those agreements preclude a sale of the underlying real properties. If this were to occur, the value of the interest sold would no longer be available to support the Equity-Bond Ratio or the repayment of the Bonds in the event the trustee exercised its rights under the Forced Sale Agreements. While we may replace the Lakeview Equity or Ridgmar Equity with equity in other properties, you will not have had the opportunity to evaluate such properties prior to making an investment in the Bonds. See “Risk Factors – Risks Related to the Offering –Neither the Forced Sale Agreements nor the Cash Flow Loan Agreements limit the rights of GK Development's affiliates to sell the Lakeview Equity or the Ridgmar Equity to an unaffiliated third party, nor do they preclude the sale of the real property underlying each of the Lakeview Equity and the Ridgmar Equity” for more information. 

We may enter into Additional Forced Sale Agreements with affiliates. If we do, we anticipate the terms of the Forced Sale Agreements to be substantially similar to the ones related to Ridgmar and Lakeview Square. As a result, the risks associated with the Initial Forced Sale Agreements are expected to also exist with any Additional Forced Sale Agreements, including but not limited to (i) the inability to effectively sell the affected equity due to restrictions contained in the underlying senior and mezzanine debt documents, (ii) the ability of the property owner to sell the property without the consent of the trustee, and (iii) the ability of the holder of the affected equity to sell the affected equity without the consent of the trustee.

Cash Flow Loans

Our company has entered into loan agreements with the holders of the Lakeview Equity and the Ridgmar Equity, or the Cash Flow Lenders, whereby the Cash Flow Lenders are obligated to advance our company up to the entirety of the monthly cash flow to them from the Lakeview Equity and Ridgmar Equity, in order to enable our company to meet the Cash Coverage Ratio covenant. Any such advances will be represented by a promissory note, subordinate to the Bonds, that will bear interest at the then in effect IRS impute interest rate and will have the same maturity date as the Bonds. We will be required to represent to the Cash Flow Lenders (or any of them) that we require such a loan in order to comply with the Cash Coverage Ratio covenant in order to receive such a loan. The source of the Cash Flow Loans will be the distributions from GK Preferred and Senior Mezz to Lakeview Equity and Ridgmar Equity, respectively. Prior to the Cash Flow Loans' maturity date, our company may, but is not required, to make payments on the Cash Flow Loans at its discretion. At its discretion, our company may enter into substantial similar arrangements with other affiliates of GK Development in order to provide cash to our company to ensure compliance with the Cash Coverage Ratio covenant; provided, that the repayment of any loan from an affiliate of GK Development to our company shall be subordinate to the Bonds.

The Cash Flow Loan Agreements do not limit the rights of the holders of such equity to sell their equity, nor do those agreements preclude a sale of the underlying real properties. If this were to occur, we would lose our rights to the cash flow loans relative to the interest sold. See “Risk Factors – Risks Related to the Offering –Neither the Forced Sale Agreements nor the Cash Flow Loan Agreements limit the rights of GK Development's affiliates to sell the Lakeview Equity or the Ridgmar Equity to an unaffiliated third party, nor do they preclude the sale of the real property underlying each of the Lakeview Equity and the Ridgmar Equity” for more information.  

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Mezzanine Debt

Lake Mead Parent, LLC, the owner of Lake Mead Partners, LLC and the wholly-owned subsidiary of our company, and Lake Mead Development, LLC received mezzanine debt to purchase Lake Mead Crossing from an affiliate of our manager. Under the promissory note, Lake Mead Parent, LLC and Lake Mead Development, LLC can borrow up to $10,500,000 at 8% interest. The mezzanine loan requires monthly interest payments only. The loan matures on November 12, 2018. Currently, the mezzanine loan has an outstanding principal of approximately $9,978,500. We believe the terms of the current loan are, and any future loans from an affiliate of our manager will be, fair and at market rates for such loans. However, we cannot assure you that a third party unaffiliated with GK Development would not be willing to provide current loan financing on better terms.

SELECTION, RETENTION AND CUSTODY OF COMPANY'S INVESTMENTS

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POLICIES WITH RESPECT TO CERTAIN TRANSACTIONS

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COMPENSATION OF OUR MANAGER AND ITS AFFILIATES

The following is a description of compensation that may be received by GK Development and its affiliates from our company or in connection with the proceeds of this offering. These compensation arrangements have been established by GK Development and its affiliates and are not the result of arm's-length negotiations. Services for which our company engages GK Development or its affiliates and which are not described below will be compensated at the market rate. Fees payable to GK Development or its affiliates in excess of the rate set forth in this section entitled "Compensation of our Manager and Its Affiliates" will require the consent of a majority of the Bonds. For this purpose, a Bondholder will be deemed to have consented with respect to its Bonds if he has not objected in writing within five (5) calendar days after the receipt of the consent request. GK Development or an affiliate may elect to waive or defer certain of these fees in its sole discretion. This table assumes that the maximum offering amount of $50,000,000 is sold in this offering.