We’ve invested roughly $4.4 million in the acquisition and renovation of the Belterra Apartments, a 314-unit apartment community in Dallas, Texas. Along with the adjacent Estancia Apartments, this project is part of a two-asset portfolio with the same sponsor and business plan.
While record asset prices have driven yields on public stocks and bonds to near-historic lows, we continue to see opportunities to target attractive yields by financing the acquisition and renovation of reasonably-priced apartments in growing areas.
Business plan
The property was roughly 94% occupied when we invested. The project’s sponsor, ValCap, intends to execute on a value-add business plan including interior renovations and improvements to the community’s leasing center, gym, and pool area.
Following the completion of renovations, ValCap plans to hold and manage the property for roughly ten years before seeking opportunities for an exit via sale or refinance. Our investment is structured like debt, where we are entitled to earn a 9% annualized return 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. They currently manage more than 6,000 apartments valued at more than $600 million.
- Income-generating asset: The apartment community was roughly 94% occupied at the time of our investment, generating consistent cash flow through rental income.
- Healthy local economy: The Bureau of Labor Statistics reported a 2.9% increase in employment between May 2018 and May 2019 for the Dallas-Fort Worth-Arlington MSA, nearly double the national average of 1.5%. With Toyota, Liberty Mutual, and JPMorgan Chase having recently expanded their operations in the area, we expect continued strong demand for reasonably-priced apartment housing.
As always, please don’t hesitate to reach out to investments@fundrise.com with any questions or feedback.
