Progress update: Construction of Atlanta apartments nearing completion

In May 2018, we invested $5 million in the development of Vue at the Quarter, a 271-unit luxury apartment community in the Upper Westside of Atlanta.

After initial delays caused by a period of heavy rain, work was progressing steadily through the start of the year and the project was nearing the final phase of construction when COVID-19 began to impact the nation. As part of the nationwide shutdown that began in March, the City of Atlanta suspended inspections that were necessary for us to move forward with construction, and a number of manufacturers halted production, causing a delay in the shipment of materials needed to finish the units.

Despite these slowdowns, we’re pleased to report that construction has since resumed and is wrapping up on two of the three residential buildings. The project’s sponsor has begun ramping up leasing efforts. Virtual tours of the finished units are available on the apartment community’s marketing site.

While additional delays due to COVID-19 are still possible, no specific complications due to the pandemic are currently at hand. Construction on the last remaining residential building is expected to wrap up this fall, which is roughly nine months behind the original schedule.

To mitigate the impact of delays, we structure many of our investments in construction like debt. This means that we are entitled to earn a fixed rate of return each month for as long as it takes to finish the project, regardless of any changes to the project timeline. Though we always prefer to see construction proceed on schedule, investments like this one are designed to accommodate timeline extensions without negatively impacting our returns.

Once the apartments are leased up and stabilized, the project’s sponsor intends to pay back our investment through a sale of the property or by refinancing to lower-rate, long-term debt.

Investor FAQ: How does this project impact your portfolio?

As construction proceeds, our investment will continue to earn an annualized return of roughly 10.5%, which supports dividends for the East Coast eREIT. At the same time, the successful completion of each construction milestone reduces the overall risk of the project.

We look forward to providing you with additional updates on this project. As always, if you have any questions or feedback, please visit our help center or reach out to us at investments@fundrise.com.