Important note: The realized return on an individual project may vary significantly from your portfolio-level return as an investor. To learn more about why this may be the case, see the “how did this project impact your portfolio?” section.

In July 2017, we invested in the acquisition of the Chestnut Springs Apartments, a 92-unit apartment complex in Colorado Springs, Colorado. The business plan involved the sponsor holding the asset for several years while robust market and population growth supported the property’s value.

Recently, the sponsor paid back our investment in full. Per the terms of our preferred structure investment (which is similar to debt), we earned an annualized return of roughly 11% over the life of the investment.

Investor FAQ: How does this project impact your portfolio?

Throughout the term of this investment, the regular income it generated supported quarterly dividends for the Heartland eREIT.

Income in a historically low interest rate environment

This investment is part of our broader Fixed Income strategy, which has historically consisted primarily of short to medium-term loans or similar financing of new development. Many of these investments are either reaching maturity, or being paid back early via refinance due to the historically low interest rate environment. This has resulted in us holding a greater than usual amount of cash on hand, which, as we stated in our year-end letter, serves to reduce returns in the immediate term. For example, while this investment generated a roughly 11% yield, the annualized yield on the Heartland eREIT was 3.76%, as of the time of this writing.

While we are actively evaluating the most attractive strategies to deploy into new income-generating investments in this environment, it is reasonable to expect that (along with nearly every other asset class), yields on private real estate investments in the near term would generally be lower than they were in the past.

As always, if you have any questions or feedback, please visit our help center or reach out to us at investments@fundrise.com.