In May 2018, we invested $9 million in the construction of Quest at Cedar Park — a mixed-use project consisting of 333 apartments and 3,900 square feet of commercial space in Cedar Park, Texas, a major suburb of Austin. Today, we’re pleased to report that concrete work, including foundations and parking garage, is finished, and construction has gone vertical with initial framing in place.
The project is moving along, however, the sponsor reported some initial delays due to a period of heavy rain last summer and fall. While we can’t control the weather, we can mitigate the impact of delays by structuring most of our investments in construction like debt, where we are entitled to a fixed annual rate of return, even if the project takes longer to finish than initially expected (which it usually does).
Construction on Quest at Cedar Park is currently expected to complete by the end of 2020, which is a little over two months behind the initial schedule.
Investor FAQ: How does an individual project impact your portfolio?
This investment is structured like debt, where we are entitled to a fixed rate of return before the project's sponsor can earn a return for themselves, and their equity provides us with a cushion against losses.
While construction continues, our investment will continue to earn an annualized return of roughly 11%, which supports dividends for the Growth eREIT. The successful completion of each construction milestone reduces the overall risk of the project.
We look forward to providing you with additional updates on this project. As always, please don’t hesitate to reach out to investments@fundrise.com.
