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 September 2019, we invested in the acquisition of The Watson, a brand new 247-unit apartment community in Grand Prairie, Texas, within the Mid-Cities region between Dallas and Fort Worth.
At the time of our acquisition, the property was approximately 95% occupied. The original business plan involved the sponsor, Ventures Development Group, holding and managing the property for several years before paying back our investment via sale or refinance.
Last month, however, the sponsor successfully sold the property and 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 9.5% 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 Income eREIT 2019.
This investment is part of our broader Fixed Income strategy, which has historically consisted primarily of short to medium-term loans or 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 have been in the past (along with most other asset classes).
As always, if you have any questions or feedback, please visit our help center or reach out to us at investments@fundrise.com.
