In May 2018, we invested $9.9 million in the acquisition of 16.5 acres of land in Daly City, California, on the southern border of San Francisco. We’re pleased to report that our partner has secured entitlements to create a new subdivision of 133 for-sale townhomes.
Based on the progress made on this project, we increased our initial investment by $6 million to roughly $15.9 million. During the remaining term of the investment, our investment is expected to continue to earn an annualized return of roughly 9%.
The next step is to wrap up the initial site work to market the now-entitled property for sale. Once the property is shovel ready, the borrower plans to sell it to a home builder and use the proceeds to pay back our investment.
Investor FAQ: How does an individual project impact your portfolio?
This investment is structured as debt, where the borrower 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 the investment, the regular income it has generated has supported quarterly dividends for the West Coast eREIT.
