In June 2019, we invested roughly $8.6 million in the acquisition and renovation of Runaway Bay apartments, a 192-unit apartment community in Pinellas Park, Florida, a suburb of Tampa. Shortly after acquiring the property, we kicked off our value-add plan, which included interior renovations on the apartments, as well as improvements to the property’s clubhouse, fitness center, and landscaping.
Renovations progressed steadily through the remainder of 2019 and early 2020. When the COVID-19 pandemic emerged in March, our partner elected to slow the pace of work to allow for social distancing and similar precautions aimed at ensuring a safe and healthy jobsite. To date, 11 units have been successfully renovated, while we originally projected completing 35 in the first year of the investment. Despite the pandemic-related delays to the value-add plan, we’re encouraged by the fact that the renovated units have so far achieved an average increase of about $150 per unit, roughly 34% higher than our originally underwritten projections.
Meanwhile, rent collections — one of the primary measures of health at an apartment property — have stayed at strong levels, averaging about 95% for April through August, in line with the apartment industry average reported by NAREIT over that same period.
Like our other apartment communities in Sunbelt cities, we view the performance of this investment, both generally and through the pandemic, as a reinforcement of our conviction that affordable real estate in growing areas is always in demand.
Investor FAQ: How does this project impact your portfolio?
This investment is structured as equity, which means we are the owners of the property and entitled to our share of rental income, plus any future increase in the value of the property. As an investor, you can expect to see this impact your return in two ways. Any additional rental income would contribute to quarterly dividends, while any increase in the property value would be captured in adjustments to the Growth eREIT II’s net asset value (NAV) per share.
As always, if you have any questions or feedback, please visit our help center or reach out to us at investments@fundrise.com.
