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 November 2018, we invested roughly $3.4 million in the construction of The Overland, a mixed-use building in the Platt Park neighborhood of Denver, including 139 apartments and approximately 5,000 square feet of commercial space.
After some initial delays in obtaining construction permits, work progressed smoothly despite the difficulties presented by the COVID-19 pandemic. We’re pleased to share that construction at the property is now complete, and the sponsor has begun to market the apartments and retail spaces for lease.
Last month, the sponsor refinanced the property to pay 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 11.75% over the life of the investment.
Investor FAQ: How does this project impact your portfolio?
This investment was structured like debt, where the project’s sponsor must pay us a fixed rate of return before they can earn a return for themselves, and their equity provides us with a cushion against losses. Throughout the term of this investment, the regular income it generated supported quarterly dividends for the Heartland eREIT.
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. While we are actively evaluating the most attractive strategies to deploy into new income-generating investments in the current, historically low interest rate environment, it is reasonable to expect that yields on private real estate investments in the near term would generally be lower than they were in the past (along with nearly every other asset class).
As always, if you have any questions or feedback, please visit our help center or reach out to us at investments@fundrise.com.
