|Current Ann. Return||6.0%|
|Accrued Ann. Return||+
|Gross Ann. Return*|
|Current Ann. Return||6.0%|
|Accrued Ann. Return||+ 8.0%|
|Gross Ann. Return*||14.0%|
|Term Remaining||8 of 30 mo.|
|Underlying Security||Preferred Equity|
This is an opportunity to invest in a series of Notes tied to the performance of a 30,400 SF multi-family and retail rental property located in Seattle’s First Hill neighborhood.
First Hill is located at the southeast corner of the Seattle Central Business District and closely tied to the Capitol Hill neighborhood to the north. The area has a broad demographic appeal given its close proximity to Seattle University and several well-regarded hospitals. There is a well-developed base of services and retail in the neighborhood and convenient access to a variety of employment centers.
Revolve Development purchased the land in December 2012, and has fully entitled the property with the City of Seattle. This location is arguably one of the most difficult for entitling new construction projects. Demolition permits for the existing structure (a vacant restaurant) were recently obtained, and the site is now shovel-ready.
The sponsor closed on the senior construction loan in December 2014. Demolition has been completed and excavation of the site is anticipated to begin shortly. Construction is projected to take approximately 12 months from ground breaking and is estimated to be completed in early 2016.
Exit Strategy: The sponsors plan to exit the Investment via refinancing by May 2017.
The sponsor has received approval for Seattle’s Multifamily Property Tax Exemption ("MFTE") program. Under this program, taxes are exempted for up to 12 years, requiring that 20% of the units (7 for the subject) be affordable to households earning 65% of median income for studio units, 75% for one-bedroom units, and 85% of median income for two-bedroom and larger units.
The subject’s unit mix features the following projected rents:
The blended average projected rent for the residential units (inclusive of market and MFTE units) is $2.77 / SF / Month, or $1,457 / Unit / Month.
The projected rent for the ground-floor commercial space is $24.00 / SF / NNN. The commercial space is targeted towards restaurant and retail tenants.
The sponsor projects as-stabilized NOI of $530,000, which includes the tax exemption. Forgoing the tax exemption (for valuation and refinance proceeds), the sponsor projects as-stabilized income of $490,102.
Interest payments on the notes will be tied to the distribution schedule under the terms of the preferred equity investment.
Years 1 - 2.5: 6% simple interest current + 8% simple interest accrued. All accrued interest will be paid out at maturity. The sponsor will have the option of one (1) six (6) month extension during which preferred return must be paid at 15% current over a 25-year amortization schedule.
Openness is a key design element of the ground-level experience, and indoor-outdoor flow will be emphasized in the building through the use of large operable windows and retractable doors. Street trees and streetscape furnishings will add to the ground-plane and help create an active streetscape that is suitable for a building and neighborhood interested in sidewalk dining and retail opportunities. Additionally, the property will feature a large roof deck amenity space that will provide attractive views of the Seattle skyline, Seattle University campus, and Mt. Rainier.
|Gross Annual Return*||14.0%|
|Capital Senior to Fundrise||60-69%||3|
|Capital Junior to Fundrise||20-29%||3|
|Sponsor’s Track Record||Less than $50 million||3|
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 & Limited Partner Equity||23.2%||$1,993,269|
|Preferred Equity||Fundrise Investment||11.6%||$1,000,000|
The property will include a four-story wood frame structure consisting of 32 residential units and approximately 3,600 SF of street-level retail. The structure will be constructed above a subterranean parking garage consisting of 16 parking stalls. 3 surface stalls will be located behind the building. The building will feature a lobby entrance for the residential units on East Jefferson Street and a rooftop deck amenity with views of Mt. Rainier and the Seattle skyline.
The unit mix will consist of 9 studio units, 13 open one-bedroom units, and 10 one-bedroom units.
|Address||1315 E Jefferson Street|
|City & State||Seattle, WA|
|Product Type||Residential / Multi-Family|
|Project Phase||Ground-Up / Construction|
Driven by steady job growth, the Seattle residential market continues to exhibit strong fundamentals, especially within the for-rent segment. Current apartment rents in Capitol Hill and First Hill are averaging $2.85 / SF, ranging from $2.24–$3.86 / SF. Residential parking in these neighborhoods is renting for an average of $179 per month, with a range of $150–$265 per month. Given the high demand for locations in close proximity to downtown and South Lake Union, vacancy for rental product in these central neighborhoods remains low.
First Hill Neighborhood
Perched above the Retail Core and Chinatown/International District, First Hill is regarded as Seattle’s first neighborhood where pioneer families established roots and left behind a rich history of classic homes, gardens and churches. First Hill is named for being the first hill from downtown, headed east. This diverse neighborhood is also home to some the world’s most respected medical and research institutions, most notably Swedish Hospital and Virginia Mason Medical Center. The high concentration of hospitals in the neighborhood has garnered it the nickname ‘Pill Hill’.
First Hill is primarily residential area, and is home to a variety of demographic profiles, most notably medical professionals and affluent students due to its proximity to the area’s major hospitals and Seattle University. The First Hill market is also benefiting from the rapid growth of Seattle’s hottest submarket- the Capitol Hill neighborhood to the north, which is expanding south into First Hill as it continues to grow.
The neighborhood currently has excellent bus service, which will be augmented by the First Hill Streetcar due to start service in 2015 (a stop is five blocks west of the subject on Broadway). The First Hill Streetcar will also eventually connect First Hill to the regional transit system’s light rail extension known as University Link. The University Link’s first stop on Capitol Hill will be at Cal Anderson Park (about a mile north of the subject), near Seattle Central Community College, before heading north to its final stop at the University of Washington near Husky Stadium and the Burke-Gilman Trail. Link operations are set to commence in 2016. Link also currently runs south to SeaTac airport.
Revolve was born out of a desire to utilize the partners collective skill sets in the real estate industry to create unique real estate product and investment opportunities. Revolve is focused on investments in multifamily residential developments and value-add projects, predominately located in Seattle, WA.View full profile
|Gross ann. return*||14.0%|
|Servicing and administration fee||-0.3%|
|Net ann. return to investors||13.7%|