In June 2019, we invested in the acquisition and renovation of Mezza apartments, a 440-unit apartment community in Jacksonville, Florida. We purchased the property with the intention of completing renovations to boost rents, and subsequently the property value.

Renovations on the property were completed in November 2020, successfully driving rent growth and supporting strong rent collections, despite the impacts of the COVID-19 pandemic. Since then, the property has remained near full occupancy, generating strong cash flow.

With the improvements to the property and increases in income, we’re pleased to share that we were able to secure a supplemental loan of approximately $12.9 million, which allowed us to pull roughly $7.3 million of our $13.2 million investment out of the deal to deploy into other investment opportunities, increasing both expected returns and diversification.

According to the appraisal ordered by our lender as part of the refinancing, we have increased the value of the property by about 48% over the original purchase price.

We view the property’s strong performance as a result of the successful execution of renovations, and further reinforcement of our affordably-priced Sunbelt apartment / rental housing thesis. We expect that the long-term trend of individuals moving out of expensive gateway cities toward locations that offer lower living costs and more agreeable climates, which was accelerated by the COVID-19 pandemic, will continue to drive demand for well-priced, well-located real estate, and support steady returns for disciplined investors.

Appreciation like what we have seen thus far at Mezza Apartments is, we believe, a compelling example of this trend in action.

Investor FAQ: How does this project impact your portfolio?

This investment is structured as equity, i.e. we are owners of the property and entitled to our share of rental income as well as any profits from its eventual sale. Rental income it produces over the duration of our investment will contribute to quarterly dividends, while increases to the property value will be captured in adjustments to the East Coast eREIT’s 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.