In October 2017, we invested roughly $5.7 million in the construction of the Volaris Starkey Ranch Apartments, a 384-unit apartment community in Odessa, Florida, north of Tampa. The finished product is expected to include 20 three-story apartment buildings offering modern amenities within convenient driving distance of major employers and natural recreation areas.
Today, we’re pleased to report that substantial progress has been made on the project. As you can see from the photos, construction is complete on one residential building, the clubhouse, and fitness center. The first residents began moving into the community in December.
While the finished units are leasing up, construction continues on the rest of the community, with work wrapping up on six other residential buildings. The remaining 12 residential buildings have taken shape, but still have some way to go.
At the time of closing, this was our fourth investment with the sponsor, Waypoint Residential, a Florida-based multifamily owner and developer with over $3 billion invested across 22,000 units. They have proven themselves a capable partner, and since then, we have gone on to make another four investments with them. Their performance on this and similar projects, including the completion of Estraya at Falcon Pointe Apartments, continues to strengthen our confidence.
We look forward to providing you with further updates on this project as it nears completion.
Investor FAQ: How does an individual project impact your portfolio?
This investment was structured like debt, where the borrower must pay us a fixed rate of return before they can earn a return for themselves, and their equity provides us with a cushion against losses.
While construction continues and the sponsor leases up the units, our investment will continue to earn an annualized return of roughly 10%, which supports dividends for the East Coast eREIT. At the same time, the successful completion of each construction milestone reduces the overall risk of the project.
