The Growth eREIT III launched in 2019 to invest in Class B multifamily properties and is primarily concentrated in the Dallas-Fort Worth metro area.
The Sunbelt region of the United States has seen impressive population growth over the past several years, with residential real estate assets in Texas markets regularly outperforming expectations. This has been driven partially by Texas strong economy, business-friendly policies, ample available land, and favorable personal income tax laws, making it the fastest growing state in the nation for almost two decades.
Investment strategy drivers:
- Population growth in Texas: As the population has grown and businesses have continued to move into the state, Texas has averaged almost 500,000 new residents a year, with the Dallas-Fort Worth metro area arguably the strongest growth engine in the state. Much of the economic growth can be attributed to large companies establishing secondary headquarters in the state, fueling a construction boom across the MSA and resulting in additional demand for housing in all categories: workforce, apartments, and single-family rental.
- Infill housing supply constraints: Potential for outsized appreciation of the assets due to this growing demand for housing. This may result in values going up over time, particularly as the balance of supply increasingly shifts to Class A apartments and single family rental properties, decreasing the overall percentage of Class B apartments and more affordably-priced available options in the region.
- Long-term fixed financing: Bolstering these strategies is the long-term fixed financing we have in place on most of the assets today. Moderate-leverage, ten year loans were secured in 2019 at fixed rates sub 4.0% , providing the ability to maximize consistent cash-flow while also reducing volatility over the term of the investment.
