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 April 2019, we invested $1.6 million in the acquisition of a 16,600 square foot (0.38 acre) property in Upland, CA, as the future site of 19 new townhomes.
The borrower, Ridge Crest Real Estate, acquired the underutilized site with plans to subdivide it into 19 smaller lots, upon each of which a new home could be built. In mid-2020, they successfully secured entitlements for 26 homes — seven more than initially planned, thereby increasing the property’s potential value — and in 2021, they completed their business plan by obtaining the permits necessary to begin construction.
Today we’re pleased to report that the project’s sponsor has paid back our investment by refinancing into a construction loan. Per the terms of our loan, we earned an annualized return of roughly 9% 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 Income eREIT II.
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.
