We're pleased to announce that Highland Townhomes, our 220-unit townhome community in the Charleston, South Carolina area, has achieved stabilization as of October 2024, following construction completion in August 2024. This milestone marks another successful transition in our portfolio from the development phase to the cash-flowing stabilization phase.
From Construction to cash flow
As highlighted in our recent portfolio update, real estate development follows a natural "J-curve" pattern, where investments initially require capital and generate minimal income during development before transitioning to produce stronger returns as properties stabilize and begin generating consistent cash flow.
Highland Townhomes exemplifies this progression through the three key phases we've outlined:
- Acquisition & Planning: We identified this opportunity in the Charleston market and completed all necessary permitting and design work
- Development & Improvement: Construction was completed in August 2024
- Stabilization & Operation: The property achieved stabilization in October 2024 and is now generating steady income
Strategic management drives results
Our team implemented several effective operational strategies to optimize the property's performance during lease-up:
- New security infrastructure with perimeter fencing, helping enhance the properties community feel
- Responsive pricing adjustments to accelerate lease-up momentum, capitalizing on Charleston’s market demand
- Personalized marketing campaigns, targeting prospective tenants who value increased space and modern amenities
These initiatives have positioned Highland Townhomes as a premium housing option approximately 20 minutes from downtown Charleston, attracting residents who appreciate the combination of suburban space and urban accessibility.
Portfolio impact
Highland Townhomes joins the growing number of our assets completing the transition from development to stabilization. This progression is crucial to our long-term strategy and represents exactly the kind of execution that will continue to drive the Flagship Fund's performance as more properties reach this stage.
With asking rents now at their highest levels since the property's launch, Highland Townhomes demonstrates how patience through the development cycle can be rewarded with strong, stabilized assets that contribute consistent cash flow to the portfolio.
This successful stabilization further validates our approach to creating value through the full real estate lifecycle and underscores why the longer investors remain invested, the more likely they are to benefit from the "back-ended" returns characteristic of real estate development.
