|Current Ann. Return||6.0%|
|Accrued Ann. Return||+
|Gross Ann. Return*|
|Current Ann. Return||6.0%|
|Accrued Ann. Return||+ 7.2%|
|Gross Ann. Return*||13.2%|
|Term Remaining||0 of 15 mo.|
|Underlying Security||Preferred Equity|
This is an opportunity to invest in a series of Project Payment Dependent Notes ("Construction Note") tied to a preferred equity investment in the ground-up new construction of a mixed-use apartment development located in Denver’s fast-growing River North ("RiNo") neighborhood. The sponsor, Littleton Capital Partners, is planning to break ground on a 62 unit mixed-use development in Spring 2015.
The preferred equity investment from Fundrise is being used to finance the construction of the project. The sponsor has estimated a completion date for all major construction by February 2016.
Fundrise plans to refinance the Construction Note after major construction has been completed (estimated March 2016) via a Stabilized Note at a lower rate until the underlying Fundrise preferred equity investment has been paid off by the Sponsor at exit.
Milestones: The following is the anticipated development timeline for the project:
Financials: The sponsor projects a total project cost of $13,758,275 and a base case as-stabilized NOI of $1,077,466 achieved in year 4. Using a 6.2% blended cap rate (6.0% on residential income and 7.0% on commercial income), the sponsor projects a valuation of over $17,400,000 for the completed project. Based on these projections, the preferred equity investment comfortably exits with sale proceeds sufficient to cover both the principal and accrued interest of the Fundrise investment.
Payments: Interest payments on this series of notes will be as follows:
|Gross Annual Return*||13.2%|
|Capital Senior to Fundrise||70-79%||4|
|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|
|Equity||Sponsor and Limited Partner Equity||22.2%||$3,058,275|
|Preferred Equity||Fundrise Investment||7.3%||$1,000,000|
As-Is: The site is currently improved with 13,800 SF of existing commercial space and 2 houses. Most or all of the existing structures will be demolished, though the sponsor may leave in place the 13,800 SF masonry and concrete commercial building, from 1917, which may be kept and renovated or demolished with its exterior façade incorporated into the new design.
As-Completed: The planned structure will consist of 10,800 SF of commercial space and 62 apartment units. The building will be 3-stories - 2 levels of apartments over street-level retail and office space. The structure will be wood-framed construction on top of a concrete podium.
Parking will include 48 covered and secured spaces for the apartment tenants, and 21 surface spaces for commercial tenants.
On-site amenities include two street-level courtyard areas along Larimer Street that will allow apartment residents to mix with commercial tenants and patrons. The commercial courtyard to the north will mostly be utilized as outdoor seating for restaurants and other tenants in the commercial space, and the residential courtyard to the south that will provide a more intimate outdoor space for those apartments units with exterior entries that overlook the courtyard. To facilitate social interactions, the Project will also offer two second-floor terraces including one larger amenity terrace overlooking Larimer Street and the commercial courtyard with a fire pit, barbeque grills, and seating areas. The smaller terrace will be more private particularly for the courtyard apartment residents as it will be set-back from Larimer Street and will overlook the residential courtyard. To support cycling and other outdoor interests of our targeted demographic, the Project will also provide secure bike parking, a bike maintenance room, and ample storage areas. Most of the units will have private exterior balconies and/or direct access onto one of the terraces. Those units without balconies or terraces will have sliding glass doors with building mounted guardrails (juliet balconies)
|Address||35th and Larimer Streets|
|City & State||Denver, CO|
|Product Type||Mixed-Use / Multifamily|
|Project Phase||Ground-Up / Pre-Development|
Denver benefits from strong in-migration population growth, a highly-educated workforce and cost of living advantages compared to the coasts, factors that will continue to attract companies to the region. The significant infrastructure investment underway in Denver draws attention to the standout economic activity locally, including an airport and mass transit expansion.
The multi-billion dollar FasTracks project will transform travel within the region by adding 122 miles of commuter and light rail service. Construction was recently approved for the $343 North Metro rail line from Union Station north to 124th Avenue by January 2018. Work is underway on the Gold, East, Northwest and I-225 lines. Denver is also growing its connectivity to international markets with the addition of three new international destinations for a total of 23 destinations, including a nonstop flight to Tokyo.
River North ("RiNo")
Over the last decade, the RiNo District has been transitioning from a primarily industrial district to a vibrant mixed-use community. The district’s close proximity to Downtown, LoDo, and the Ballpark neighborhoods allowed it to benefit from the redevelopment and change that began spilling over from these areas in the mid-2000s. The edgy character of the area and the flexibility offered by its converted industrial space has proved appealing to residences and businesses alike.
The RiNo district has become a hotspot for many of Denver’s artistic minds attracting many creative businesses and entrepreneurs to the area. The district is home to many art galleries, lively restaurants, bars, and breweries.
The many transformative changes that have occurred to the once industrial neighborhood are readily apparent. New development in the district creatively reinforces its industrial roots, a trend that is unlikely to go away. A February 2014 report by CBRE on the redevelopment of RiNo stated: "the next ten years will bring further land use dissemination to non-industrial uses, although the industrial character will not only be maintained but celebrated through creative renovation and retrofits."
Littleton Capital Partners is a privately held real estate company that provides development, property management and consulting services across a diversified mix of asset types. The firm and its principals have a reputation for the development and redevelopment of quality infill projects, active property management, strong property performance and the creation of value for our clients, tenants and investors.View full profile
|Gross ann. return*||13.2%|
|Servicing and administration fee||-0.3%|
|Net ann. return to investors||12.9%|