Editor's Note: an earlier version of this update reported the expected annual return of the portfolio as 11%. We have adjusted this to 10.6% to more accurately reflect the expected return on the entire portfolio of 11 assets, including the portion of our investment which we expect to be used for renovation costs.

We’ve invested roughly $1.4 million in the Kessler Point Apartments, a 120-unit apartment community in Garden City, Georgia, a suburb northwest of Savannah. This project is part of a six-asset portfolio located in the Savannah metro area, which has grown by more than double the national average since 2010.

At a strategic level, we continue to see opportunities to earn attractive risk-adjusted returns by identifying older, affordably-priced apartments in growing areas, and renovating them to increase rental income and property values.

Business plan

The property was roughly 92% occupied when we invested. The project’s sponsor, Carter Multifamily, plans to upgrade the community amenities and renovate all 120 apartments as they turn over. We expect this value-add program to drive an increase in rental income, and consequently, the overall value of the property.

Following the completion of renovations, Carter Multifamily plans to actively manage the property for roughly five years before seeking exit opportunities via sale or refinance. During the term of the investment, we are entitled to our share of the monthly cash flow. Upon exit, we are entitled to receive a return equivalent to 10.6% annually (including the cash flow we received in the interim) before the sponsor can earn a return for themselves.

Why we invested

  • Experienced sponsor: Carter Multifamily is a Florida-based real estate investment firm that specializes in renovating apartment communities across Alabama, Florida, Georgia, Louisiana, and North Carolina. Their current portfolio is valued in excess of $100 million.
  • Paid first upon exit: Upon sale or refinance, we are entitled to receive a return equivalent to 10.6% annually (including the cash flow we received in the interim) before the sponsor can earn a return for themselves.

As always, please don’t hesitate to reach out to investments@fundrise.com with any questions or feedback.