In September 2017, we invested roughly $5.4 million in the acquisition of the Forest Cove Apartments in Denver, Colorado, along with $11.25 million in financing, while our partners on the project, Orion Real Estate, contributed the remaining equity. The apartment community consists of 100 two-story garden-style units with community amenities. Shortly after acquiring the property, we kicked off our value-add plan, which included interior renovations on the apartments, as well as improvements to the common areas.
Since acquisition, rent collections, a key indicator of an apartment property's health, have remained consistently strong. Moreover, the occupancy levels have remained above 90%.
Today, we’re pleased to share that with strong rent collections and the implementation of our value-add plan, the property value has increased significantly, representing an 80% increase from the original property purchase price of $15 million, according to a recent appraisal. To capitalize on this increased value, we’ve secured a new senior loan of approximately $17.3 million, and the fund received a cash distribution, which it now has the ability to redeploy, either in this project or elsewhere.
Like our other apartment communities that follow our value-add strategy, we view the performance of the Forest Cove Apartments, both generally and through the pandemic, as a reinforcement of our conviction that affordable real estate in growing areas is always in demand.
Investor FAQ: How does this project impact your portfolio?
This investment is structured as equity, which means we are the owners of the property and entitled to our share of rental income, plus any future increase in the value of the property. As an investor, you can expect to see this impact your return in two ways. Any additional rental income would contribute to quarterly dividends, while any increase in the property value would be captured in adjustments to the Heartland eREIT’s net asset value (NAV) per share.
As always, if you have any questions or feedback, please visit our help center or reach out to us at investments@fundrise.com.
