In June 2018, we invested $2.5 million in the acquisition of an underutilized 14,500 square foot (0.3 acre) lot in the Koreatown neighborhood of Los Angeles, as the future site of a 31-unit apartment building.
Today, we’re pleased to report that the project’s sponsor has secured construction permits and paid back our loan by refinancing into a construction loan. All interest payments were paid in full during the investment period, generating an annualized return of roughly 9%¹ over the term, which matches our initial projection.
Investor FAQ: How does an individual project impact your portfolio?
This investment was structured as debt, where the project’s sponsor must pay us a fixed rate of return — in this case, 9% annually — before they can earn a return for themselves, and their equity provides us with a cushion against losses. Throughout the term of this investment, the regular income it generated supported quarterly dividends for the Income eREIT.
