In May 2018, we invested $5 million in the construction of The Quarter Apartments — a 271-unit apartment community in the Upper Westside area of Atlanta.
Today, we’re pleased to report that major progress has been made on the project. Three of the five residential buildings have taken shape, as siding and window installation begins. At the same time, foundations are in place and structural work is underway on the remaining residential buildings in the community.
While construction is progressing smoothly at this point, the project was initially delayed due to a period of heavy rain last summer and fall. Months of muddy conditions on the site made it difficult to complete the initial phase of construction, which typically includes excavation and site work.
To mitigate the risk of unexpected delays, we structure most of our investments in construction like debt, where we are entitled to a fixed annual rate of return for as long as it takes to finish the project and pay back our investment. This means that delays do not negatively impact returns as long as the project eventually finishes.
Construction is expected to wrap up in the fall of next year, which is roughly nine months behind the original schedule.
Investor FAQ: How does an individual project impact your portfolio?
This investment is structured like debt, where the project’s sponsor must pay us a fixed rate of return — in this case 10.5% 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 East Coast eREIT.
We look forward to providing you with additional updates on this project. As always, please don’t hesitate to reach out to investments@fundrise.com.
