|Current Ann. Return||0.0%|
|Accrued Ann. Return||+
|Gross Ann. Return*|
|Current Ann. Return||0.0%|
|Accrued Ann. Return||+ 16.0%|
|Gross Ann. Return*||16.0%|
|Term Remaining||0 of 24 mo.|
|Underlying Security||Senior Debt|
This is an opportunity to invest in a series of Notes tied to an acquisition and pre-development loan for an 8,800 SF piece of land located at 2100 East Madison Street. The site is on the eastern edge of Seattle’s prominent Capitol Hill neighborhood and currently consists of a soon to be vacant one-story retail building. The sponsor, JCMV Equities, is planning to take the land through the entitlement process with end goal of developing a 50-unit class A apartment building.
The loan from Fundrise is being used for the acquisition and pre-development of the site and is expected to be paid back within 24 months.
Milestones & Exit Strategy: The sponsor closed on the acquisition on December 12, 2014 at a purchase price of $1,800,000 and anticipates completing the entitlements, drawings and permitting by mid-2016, at which point they plan to pay back the Fundrise loan via new construction financing for groundbreaking on the project.
Neighborhood: The site is located at the NW corner of the bustling intersection of East Madison St. and 22nd St. which is undergoing significant development. To the west of the subject site across 22nd St., Lennar is developing 157 apartment units with groundbreaking set to occur in early 2015. To the south of the subject on the opposite side of the intersection, the sponsor is planning to develop an additional 95 apartment units with groundbreaking imminent. Additionally, to the east of the subject site across East Madison St., there is a 242 unit apartment complex with a ground floor Safeway grocery store that delivered in 2004.
Financials: The underlying Fundrise loan of $1,400,000 represents a favorable basis of $159/SF, less than 50% of average comparable land sales in the area of which range from $248/SF to $506/SF.
The sponsor projects a total project cost of $14,000,000 and a stabilized NOI of approximately $927,000. Using a 4.75% cap rate for residential income and 6.50% cap rate for retail income, the sponsor projects a valuation of over $18,000,000 for the completed project. Based on these projections, the development plan is economically viable and supportive of the construction financing sufficient to cover both the principal and accrued interest of the Fundrise loan.
Payments: Interest payments on this series of notes will be as follows:
The sponsor will have one 6-month extension at an annual rate of 18%.
|Gross Annual Return*||16.0%|
|Capital Senior to Fundrise||0%||0|
|Capital Junior to Fundrise||20-29%||3|
|Sponsor’s Track Record||$50-249 million||2|
|Secured by the Property||Yes||-1|
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|
|Equity||Sponsor and Limited Partner Equity||25.5%||$478,864|
|Senior Debt||Fundrise Investment||74.5%||$1,400,000|
The site consists of 8,800 SF of land with a single one-story retail building. Upon completion of the pre-development period, the existing structure will be demolished, allowing for the construction of a 50-unit class A apartment complex. The sponsor plans to complete entitlements, drawings, and permitting by mid-2016. The apartments are anticipated to deliver approximately fourteen months after the groundbreaking in summer 2017 with stabilization six months thereafter.
|Address||2100 East Madison Street|
|City & State||Seattle, WA|
|Neighborhood||East Capitol Hill|
|Product Type||Land Acquisition / Planned Multifamily|
|Project Phase||Ground-Up / Pre-Development|
Seattle is the largest city in the Pacific Northwest and one of the fastest-growing cities in the United States. The cultural and business center of the region, Seattle and its surrounding areas are the home to Boeing’s aircraft assembly plants, Microsoft, Amazon.com, Costco, Nintendo of America, Starbucks, and the University of Washington, as well as a vibrant arts scene and an excellent park system. Seattle added nearly 50,000 to the MSA in each of the past four years with additional employment gains forecast well into the future driving continued demographic growth.
The Seattle market continues to rank in the top five national investment markets in several asset classes. Long term, the multifamily sector’s expansion is limited by available land, a major reason that investors with longer hold horizons rank the region highly.
The ongoing favorable market performance in the apartment sector has been attributed to several demand factors including:
These factors point toward continued demand for apartment units over the next few years, especially better quality apartments, as renters are looking at longer stays, justifying a flight to quality. The likely outcome is increased demand for rental housing. In addition, there will likely be some loss of apartment inventory as conversions of newer or planned apartments to condominiums will eventually provide entry level units as the for sale market continues to recover.
East Capitol Hill
Capitol Hill has been the region’s densest and strongest apartment market since the early 1900s, and the market has a mix of product dating from those original brick buildings to modern mid-rise projects. In 2012, it was ranked the "8th Hippest Neighborhood" in the nation by Forbes, and is currently one of the busiest submarkets in terms of number of projects under construction.
2100 East Madison is positioned as a midpoint between the saltwater of Elliot Bay downtown and the freshwater beach in the wealthy neighborhood of Madison Park to the East. The site represents a rare close-in transit-oriented development opportunity with Madison Street targeted as a Bus Rapid Transit corridor. Residents in the area benefit from Trader Joe’s, Safeway, restaurants, bars and shopping within easy walking distance. The new Central Area Neighborhood Greenway is also located in close proximity to the site.
Established in the fall of 2014, JCMV Equities is the merging of two seasoned real estate companies, JC Mueller LLC and Teichos Terra LLC. The new company is focused on large-scale urban redevelopment that delivers lasting sustainability and long-term value to our investors and city neighborhoods.View full profile
|Gross ann. return*||16.0%|
|Servicing and administration fee||-0.3%|
|Net ann. return to investors||15.7%|