We’ve invested $5.8 million in the construction of a 309-unit apartment community on a 14-acre property in Charlotte, North Carolina. This project is the latest execution of our opportunistic financing strategy, which aims to earn an attractive risk-adjusted return, in this case roughly 11% annually, by investing in new multifamily developments in high-growth areas.
Business plan
The borrower, Middleburg Real Estate Partners, obtained the permits and entitlements necessary to begin construction on the property with a bridge loan provided by the Income eREIT II. Now that the property is shovel ready, they paid back the bridge loan and secured construction financing from the Growth eREIT II.
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
- Proximity to established university: The property is located within three miles of the University of North Carolina at Charlotte which enrolls 29,000+ students and employs 3,000+ in faculty and staff, making it the 4th largest university in the state.
- Experienced repeat sponsor: This is our second investment with Middleburg Real Estate Partners, a Virginia-based real estate operating company that specializes in the acquisition, development, and management of apartment communities throughout the Mid-Atlantic and Southeastern states. Since its founding in 2004, the company has acquired and developed more than 16,000 apartment units, completing approximately $2.0 billion in transactions.
- Steps from transit: Just across the street from the property, the University City Blvd station on the LYNX light rail offers access to downtown Charlotte in approximately 20 minutes and UNC Charlotte in about five minutes.
