We are pleased to announce the acquisition of a $5.4 million JV equity investment in a stabilized multifamily property in Denver, Colorado. Fundrise has partnered with the sponsor, Orion Real Estate Partners, to acquire the Forest Cove Apartments for approximately $15 million. The sponsor plans to invest approximately $1.7 million to perform common area and unit improvements, with roughly $530,000 of additional soft and financing costs.

Why we invested

  • Experienced sponsor: The principals of the sponsor, Orion Real Estate Partners, have extensive experience in value-add multifamily projects.
  • Stabilized with upside potential: Currently, the property is fully stabilized. The sponsor plans to invest approximately $2.2M—including hard and soft costs—to perform common area and unit improvements, which are anticipated to boost rents.
  • Strong market: The property is located near Denver, which presents a strong opportunity arising from consistent demographic growth and solid multifamily fundamentals.

Value investing: Buy, fix, and cash flow

Denver has recently seen an influx of new residents attracted to the area’s natural beauty, low cost of living, and job opportunities. Population growth has lead to an increased demand for housing, which boosted the average rental rate by approximately 4% year-over-year as of the second quarter of 2017.

Renters are now competing over a limited stock of relatively affordable housing, which faces little competition from brand new, Class A apartment buildings being brought to market. Since the units at Forest Cove are reasonably priced compared to newer product, they are no exception. We expect demand for this type of product will continue to remain robust.

This investment follows our “buy, fix, and cash flow” strategy, whereby we intend to add value to the property and boost rents through unit and common area improvements. We expect that population growth, solid rental market dynamics, and slated improvements to the asset will combine to boost cash flow at the property and, in turn, support healthy investment returns.