We’re pleased to share that the development of Terrapin Station, a build-for-rent community in Jacksonville, Florida, is now fully complete, with roughly 93% of the community’s 60 homes occupied and generating rental income at the time of writing.

Each fully delivered community is a major milestone because the collective value of a community far surpasses the sum of its individual components (i.e., each house). Once a community is fully delivered, the project can achieve greater leasing and operating efficiencies. Because build-for-rent homes are built and leased in batches, typically of 6-10 homes delivered per month, once a full community is complete it is nearly fully leased up, which would mean it is a few months from steady cash flow and permanent financing. Whole build-for-rent communities are still relatively rare, especially compared to traditional vertical apartments, which we believe will make them more attractive to renters.

We first acquired Terrapin Station in October 2022 and worked closely with a nationally recognized homebuilder on the development of the 60 homes, which were constructed, completed, and leased up in batches.

Our total purchase price for the full community was roughly $20 million. We have also since secured financing of roughly $16.8 million; accounting for that leverage, plus operating expenses and fees, the Flagship Fund’s deployed investment is currently roughly $4.7 million, and Growth eREIT VII’s $521,000.

We now intend to own and operate the community for the foreseeable future, where we expect occupancy rates to remain strong, while we anticipate significant appreciation in the property’s underlying value, powered by the updrafts driving the growth of build-for-rent as an asset type overall. We believe that build-for-rent stands at the convergence of three modern megatrends — technology, demographics, and affordability — and is in the process of becoming the next major asset class in the real estate industry, like malls in the 1960s and data centers in the 2000s. Fundrise is already one of the leading investors, drivers, and managers in the build-for-rent space.

Investor FAQ: How does this project impact your portfolio?

This investment is structured as equity, i.e., we are the owners of the property and entitled to our share of rental income as well as any profits from its eventual sale. Rental income it produces over the duration of our investment will contribute to quarterly dividends, while increases to the property value will be captured in adjustments to the Flagship Fund and Growth eREIT VII’s 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.

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Additional Information: An investor in the Fundrise Real Estate Interval Fund (the “Flagship Fund”) should consider the investment objectives, risks, and charges and expenses of the Flagship Fund carefully before investing. The Flagship Fund’s prospectus contains this and other information about the Flagship Fund and may be obtained here. Investors should read the prospectus carefully before investing.