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 2018, we invested $10.25 million in the acquisition and renovation of The Mark Apartments, a 227-unit apartment community located just south of Washington, DC, in Alexandria, Virginia.
Prior to our investment, the project’s sponsor had started a major improvement plan at the property, which included renovating the unit interiors and upgrading the community’s amenities. The business plan involved the sponsor completing the renovations and then holding and managing the apartment building over the long term before paying back our investment via sale or refinance.
Today, we’re pleased to share that our sponsor has 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 10.4% 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 East Coast 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.
