In July 2019, we invested $18.1 million in the acquisition and renovation of the Amira at Westly, a 360-unit apartment community in Tampa, Florida. As is typical of many of our investments in affordably-priced apartments in the Sunbelt, we saw an opportunity to buy and improve an existing property below replacement cost, i.e. what it would cost to build a similar new community from the ground up.
Prior to our investment, the previous owner had started renovating a small number of units. Immediately after we closed, our partner kicked off a more comprehensive value-add plan, renovating all of the remaining units along with the pool and common areas.
Increases in property income gaining steam
We’re pleased to share that work is now complete, and to date, the property has achieved an overall average rental increase of $71 per unit, a 5.7% increase since acquisition. This increase is roughly $100 less than what we originally projected, largely due to the decision to renew existing leases with only minor rent increases in light of the uncertainty surrounding COVID-19. Over the longer term, we believe that there is plenty of built-up growth potential as we eventually overcome the pandemic and the economy starts to return to a healthier state.
Rent collections near 100%
Meanwhile, rent collections at Amira at Westly — one of the primary measures of health at an apartment property — have stayed strong through the pandemic. From April through October, collections typically ended the month at around 97%, eventually maturing up to 100% in some cases as tenants made good on past months’ overdue rent. This performance represents an improvement over apartment industry averages of roughly 94 – 96%, according to the latest available data reported by NAREIT.
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 (for a more in-depth discussion of this topic we suggest you read our mid-year letter to investors if you haven’t already).
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’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.
