In May 2018, we invested $9 million in the construction of Quest at Cedar Park — a mixed-use development consisting of 333 apartments and 3,900 square feet of commercial space in Cedar Park, TX, a major suburb of Austin.
Today, we’re pleased to share that five of the seven residential buildings have received certificates of occupancy, and the property is currently leasing up. In addition to standard in-person tours, the sponsor is offering virtual tours and self-guided tours of the property for prospective residents who want to take additional precautions with social distancing.
The apartments feature high-quality interiors and competitive square footage at prices ranging from $900 for a studio up to $1700 for a larger 2-bedroom unit. While leasing is early on, rents secured from signed leases are so far roughly 9 - 10% higher than our underwritten projections.
As with any investment in new construction, obtaining certificates of occupancy and signed leases are major milestones on the journey to a fully leased, stabilized property, and represent substantial reductions in the risk to our investment. While the future is of course uncertain, the strong execution to date reinforces our confidence that the project's sponsor will be able successfully lease up the property and pay back our investment via a sale or refinance.
Investor FAQ: How does this 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, 11% 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 Growth eREIT.
As always, if you have any questions or feedback, please visit our help center or reach out to us at investments@fundrise.com.
