We’ve invested in the acquisition and renovation of five apartment communities in Georgia — three in Macon, one in Augusta, and one in Canton. Adding to six similar properties that we acquired earlier this summer in the Savannah area, these acquisitions complete an 11-asset, $39 million investment.
Unlike the majority of our apartment renovations, which are more growth-focused and have a variable expected return depending on property appreciation, we structured this deal so that we are entitled to a fixed return equivalent to roughly 10.6% annually before the sponsor can earn a return for themselves. This creates a strong incentive for the sponsor to perform well, and makes the expected return profile more like that of an income-focused investment.
Business plan
Each of the properties is a garden-style apartment community, with occupancy ranging from 93 – 97% at the time of our acquisition. While structurally sound, they could benefit from aesthetic improvements to make them more competitive.
The project’s sponsor, Carter Multifamily, plans to upgrade each community’s common amenities and renovate all 1,156 apartments as they turn over. We expect the improvements to drive an increase in rental income, and consequently, the overall value of the properties.
Following the completion of renovations, the sponsor plans to actively manage the property for roughly five years before seeking exit opportunities via sale or refinance.
Why we invested
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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.
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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.
Details about each project
| Investment | No. of units | Occupancy | |
|---|---|---|---|
| Riverstone | $4,889,956 | 220 | 97.0% |
| Heritage at Riverstone | $6,584,958 | 240 | 97.7% |
| Ten35 Alexander | $4,360,199 | 200 | 93.3% |
| Falls at Spring Creek | $5,097,890 | 296 | 93.5% |
| Legacy at River Crossing | $3,353,238 | 200 | 94.4% |
We look forward to sharing progress on the renovations as these apartments are given a fresh new look. As always, please don’t hesitate to reach out to investments@fundrise.com with any questions or feedback.
