|Current Ann. Return||8.0%|
|Accrued Ann. Return||+
|Gross Ann. Return*|
|Current Ann. Return||8.0%|
|Accrued Ann. Return||+ 4.0%|
|Gross Ann. Return*||12.0%|
|Term Remaining||0 of 36 mo.|
|Underlying Security||Preferred Equity|
This is an opportunity to invest in Notes tied to a preferred equity investment in a 24 unit multifamily portfolio located at 290 & 294 Harman Street, in the Bushwick neighborhood of Brooklyn, NY. Bushwick is currently experiencing tremendous growth due to its proximity to both Manhattan and Williamsburg. According to a recent report by real estate advisory firm MNS, overall rents in Bushwick have risen 13% since September 2012 and two-bedroom units have seen a 16% year-over-year increase in price.
Cayuga Capital Management LLC ("CMM"), the sponsor, will be managing the property directly. Upon acquisition, CCM plans to begin renovation of 3 vacant units and lease them at market rate rents. Shortly after acquisition, one additional unit will go vacant and undergo renovation. During the projected 3-year holding period, CCM plans to pursue tenant buyouts for an estimated 8 units currently under rent stabilization.
The projected rents for the newly renovated two-bedroom units are between $2,200 and $2,400. CCM believes that these rates are below market and has obtained rents of over $2,200 for newly renovated two-bedroom units in similar properties in the same neighborhood. The current average rent for the occupied units is approximately $1,750 (roughly 40% below market rates). CCM will seek to capitalize on this opportunity and grow the net operating income by bringing these units to market rate.
Once the renovations have been completed and the new units released, CCM plans to sell the entire portfolio to a long-term buyer looking for stable cash-flow at a conservative cap rate of between 5%-6%.
The interest payments on the notes will be tied to the distribution schedule under the terms of the preferred equity investment made by Fundrise, as follows:
All accrued interest will be paid out at maturity. The sponsor will have the option to extend the preferred equity investment for two 12-month periods. In the event of an extension, the entire preferred return will be paid at the rate of 12% current on a 25-year amortization schedule.
|Gross Annual Return*||12.0%|
|Capital Senior to Fundrise||50-59%||2|
|Capital Junior to Fundrise||20-29%||3|
|Sponsor’s Track Record||$50-249 million||2|
The information contained in the Fundrise Rating is for informational purposes only. It is impersonal and not individualized for any specific investor's financial situation and is not investment advice. These ratings are not intended to be, nor should you interpret them to be, a prediction of how a particular investment will actually perform. You should always carefully consider investments in any security and be comfortable with your understanding of the investment. You may also consider consulting investment professionals.
|Type||Source||% of Total||Amount|
|Preferred Equity||Fundrise Offering||19.2%||$1,350,000|
The portfolio consists of four adjacent multifamily apartment buildings totaling twenty-four (24) individual units. Two of the buildings have frontage on Harman Street. The remaining two properties are separated from the Harman Street buildings by an interior courtyard. The apartment units are made up of both 2-bedroom / 1-bathroom railroad style units.
|Address||290 Harman Street|
|City & State||Brooklyn, NYC|
|Product Type||Residential / Multi-Family|
|Project Phase||Value-Add / Reposition|
The properties are located in a growing, supply-constrained market with excellent access to public transportation. Bushwick has traditionally been a working class neighborhood, but recently the area has seen a great influx of young artists, professionals, recent graduates and hipsters mainly due to its close proximity to Manhattan. The quick and direct commute to Manhattan via the L and JMZ train lines is an important feature of this neighborhood.
The recent rent growth in Williamsburg and Greenpoint has driven price sensitive renters to the Bushwick market. According to a recent report by MNS, a real estate advisory firm, "Overall rents in Bushwick have risen 13% since September 2012 or an aggregate value of $248. Two Bedroom units have risen in price for the third conservative month contributing to a 16% increase in price on a year over year basis." In addition to strong rental growth, Brooklyn itself has seen significant economic growth; since 2003, the number of businesses in Brooklyn has increased 21% and private sector employment grew by 19.8% between 2003 and 2012.
Cayuga Capital Management LLC (“CCM”) is a real estate operating partner, development manager and property manager based in Brooklyn, New York. CCM identifies properties not operated at best and highest potential and invests to maximize returns. This is achieved through repositioning, renovation, or ground up construction.View full profile
|Gross ann. return*||12.0%|
|Servicing and administration fee||-0.3%|
|Net ann. return to investors||11.7%|