We’ve invested roughly $5.8 million in the acquisition of a 352-unit apartment community located in Southaven, Mississippi, just outside Memphis. This project fits into our broader strategy of investing in reasonably-priced apartments in high-demand areas across the Sun Belt, and performing renovations aimed at increasing property values.
Business plan
Built in 1997, the property is structurally solid but in need of a facelift to make it more competitive. The project’s sponsor, ValCap Group, plans to perform a comprehensive renovation to common amenities, including gated entries for cars, a modern sports court, and refreshed landscaping and painting. Plans for in-unit upgrades include quartz countertops, stainless steel appliances, and new hardwood floors.
Following the completion of renovations, ValCap plans to manage the property in-house and begin pursuing a sale after approximately five years. Our investment in the project is structured like debt, where we are entitled to earn a fixed annual return of roughly 9.25% over the life of the investment before the sponsor can earn a return for themselves.
Why we invested
- Experienced sponsor: ValCap is a Dallas-based real estate investment firm that focuses on investing in apartments in the Southeast US. Their portfolio currently includes more than 6,500 apartments and more than $600 million under management.
- Healthy rental market: Occupancy rates in the immediate area are roughly 95%, with no new development planned at this time.
- Major nearby employers: In addition to Baptist Medical Center and several major retail centers nearby, FedEx employs roughly 30,000 people in the greater Memphis area, with 11,000 located at the FedEx World Hub, which is 15 miles from the property.
We look forward to sharing progress on the renovations as this apartment community is given a fresh new look. As always, please don’t hesitate to reach out to investments@fundrise.com with any questions or feedback.
