We’ve invested roughly $7.5 million in the construction of a 316-unit apartment community on roughly 40 acres of land in Pooler, GA, a rapidly-developing suburb west of Savannah. This project is the latest execution of our opportunistic financing strategy, which aims to earn an attractive risk-adjusted return, in this case roughly 12% annually, by investing in new multifamily developments in high-growth areas.
Business plan
The project’s sponsor, Middleburg Real Estate Partners, plans to break ground on the property shortly. Once they finish construction and lease up the apartments, they plan to pay back our investment by either securing permanent financing or selling the property. The anticipated duration of our investment is between three and five years.
Why we invested
- Attractive margin of safety: The sponsor has roughly $7.5 million of equity (15% of total expected project costs) junior to our position. They would have to lose their entire investment before our principal was threatened.
- Construction-ready property: The borrower has already obtained the permits necessary for the project’s construction and expects to break ground on construction soon. Having permits in hand at the time of investment increases the likelihood of the project completing on-time and on-budget.
