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 March 2016, we invested in the acquisition of The Grove at Trinity Pointe, a stabilized 464-unit apartment community in Cordova, Tennessee, about 30 minutes east from downtown Memphis.
At the time of our acquisition, the property was approximately 93% occupied. The business plan involved the sponsor improving the units to increase rental income, and then holding and managing the property for several years before paying back our investment via sale or refinance.
Recently, 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 11.9% 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.
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.
