Steadfast

The OP Agreement expressly discloses that conflicts may arise between the General Partner's fiduciary duties to the Limited Partners and the duties its officers and directors owe to the General Partner's own stockholders (the REIT shareholders), and that in such conflicts, the General Partner's stockholders will be favored over the Limited Partners.

“There may be circumstances in which the fiduciary duties that the General Partner owes to the Limited Partners conflicts with any duties that the officers and directors of General Partner owe to its stockholders. For so long as the General Partner owns a controlling interest in the Partnership, any such conflict that cannot be resolved in a manner not adverse to either the stockholders or the Limited Partners shall be resolved in favor of the General Partner's stockholders.”

The Advisor to the REIT (Steadfast Apartment Advisor III, LLC) is the same entity that holds the Special Limited Partner Interest and receives the 15% subordinated promote on capital event proceeds above the Priority Return. This dual role creates a conflict between the Advisor's incentive to maximize its promote (through asset sales and capital appreciation) and its duty to manage the portfolio in the best long-term interests of investors.

“THIS AGREEMENT OF LIMITED PARTNERSHIP OF STEADFAST APARTMENT REIT III OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (the 'Partnership'), dated as of July 29, 2015 (the 'Effective Date'), is entered into by and among Steadfast Apartment REIT III, Inc., a Maryland corporation holding the sole general interest in the Partnership (the 'General Partner'), and Steadfast Apartment Advisor III, LLC, a Delaware limited liability company, holding a special limited partner interest in the Partnership (the 'Special Limited Partner')”