We’re pleased to report that construction has wrapped up on The Estraya at Falcon Pointe, a brand-new 324-unit luxury apartment community located in Pflugerville, Texas, just 10 miles north of downtown Austin.
This project is a great example of the type of investment we have been increasingly shifting towards in order to reduce risk while maintaining strong returns. In this case, our total commitment was approximately $3 million, but that did not all get invested up front. Instead, our investment was drawn down in several installments. Only as construction progressed and work was completed did we then fund another portion of our investment.
The benefit of this type of drawing down of our investment means that we only continue to invest if the project continues to increase in value.
This ensures that the project always has enough funds available to be fully completed, reducing the risk of a situation where our investment ends up in an incomplete or half-built project.
The completion of construction is a key milestone in the business plan for our investment. Now that the apartments are finished, the project’s sponsor can start leasing them out to tenants. During this time, our investment will continue to earn its full return as it becomes increasingly lower risk as the properties cash-flow increases with each signed lease. Once the property reaches a certain level of occupancy, they should be able to secure long-term financing at a lower interest rate, and pay back our investment.
For additional photos and information on the project, please see estrayafalconpointe.com
