|Current Ann. Return||6.0%|
|Accrued Ann. Return||+
|Gross Ann. Return*|
|Current Ann. Return||6.0%|
|Accrued Ann. Return||+ 5.0%|
|Gross Ann. Return*||11.0%|
|Term Remaining||0 of 24 mo.|
|Underlying Security||Senior Debt|
This is an opportunity to invest in the construction and development of a roughly 10,000 square foot brand new Starbucks-anchored retail center located in Tempe, Arizona. The sponsor, Birtcher Anderson Realty, purchased the land in October 2007 and recently moved forward with plans to develop a retail strip center on the site.
The Fundrise Investment is a senior construction loan which is capped at 75% of the total project cost ($4,138,000) and secured by the property.
The site is already under construction and is approximately 50% complete. The sponsor has invested roughly $1.2M of equity to date to fund the acquisition, pre-development, and initial construction work.
The project has two leases already signed with Starbucks and Jersey Mike’s, amounting to roughly 30% of the total space. The sponsor is also in negotiations with national brand tenants for the remaining spaces including a hair salon, wireless mobile carrier, and a fast casual Mexican restaurant.
The Fundrise Investment is anticipated to be drawn down in 5 separate disbursements over the course of the construction period. The sponsor tentatively plans to complete construction in the next 60-90 days. Once the project is fully leased and stabilized, the sponsor plans to exit via a sale of the property and use the proceeds to pay off the Fundrise senior loan.
Similar newly-delivered NNN retail centers with Starbucks or other national credit tenants as anchors are currently trading in ranges between 6.5% - 7.5% cap rates. Based on a projected stabilized NOI of $335k and an exit cap rate of 7% the sale price for the property would be in excess of $4.5M.
In a conservative scenario where the exit cap rate was 7.5% the NOI would have to be more than 12% below projections before the Fundrise Investment was negatively impacted.
This investment is projected to pay an annual gross return of 11% over the 24 month term. 6% of the projected annual return will be paid out on a quarterly basis. The other 5% will accrue annually and be paid out at the maturity of the investment.
The sponsor has a signed a 10-year lease with Starbucks who will anchor the property along with Jersey Mike's. They are also in negotiations with several national credit tenants for the remaining 70% percent of the space. Starbucks is a publicly traded company with an A- credit rating, a $75 Billion market cap, and more than 22,000 stores located in 66 countries.
The project is currently under construction and is approximately 50% complete. The sponsor has invested roughly $1.2M to date and expects to finish construction within the next 60-90 days.
The Fundrise Investment is a senior loan at 75% of the total project cost and secured by the property. The Investment is anticipated to be drawn down by the sponsor in five separate disbursements over the course of the construction period.
|Gross Annual Return*||11.0%|
|Capital Senior to Fundrise||0%||0|
|Capital Junior to Fundrise||20-29%||3|
|Sponsor’s Track Record||$250 million or more||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|
|Senior Debt||Fundrise Investment||75.0%||$3,103,379|
Asset Overview - The property will consist of two (2) single story buildings totaling 10,663 SF upon completion. The retail space is subdivided into six (6) suites ranging in size from 950 SF to 2,280 SF. The property will have ample parking of 122 spaces, a parking ratio of 11.44 spaces per 1,000 SF of gross building area.
Construction and Schedule - The project is fully permitted and has been under construction since Spring 2015. At this stage of development, the project is approximately 50% complete and expected to be completed by September 2015. Fundrise has retained a local construction reviewer to provide monthly updates and review contractor payment applications.
Leasing - There are two executed leases in place:
The sponsor is also in negotiations with national brand tenants for the remaining spaces including a hair salon, wireless mobile carrier, and a fast casual Mexican restaurant.
|Address||55th Street & Broadway Road|
|City & State||Tempe, AZ|
|Product Type||Retail / Retail & Restaurant|
|Project Phase||Ground-Up / Pre-Leasing|
The property is located in a suburban area of Tempe, located just 9 miles east of Phoenix. Within one mile of the property there are approximately 1,000 multi-family units completed or under construction and around 1,200 hotel rooms. Almost 43,000 cars travel on Broadway Road per day. The University of Phoenix's main campus is only 1/2 a mile of the property. Arizona State University is located approximately 3 miles from the subject site. Additionally, Fountainhead Corporate Center, a 470,000 SF+ office park, is located less than 1/2 mile from the subject site.
Since its inception in 1939, the Birtcher organization has grown from a local home building contractor to national prominence as a leading real estate firm in the Western United States. The company has managed over 22 million square feet of commercial property for both their own investment and for various private and public investment entities over the past 40 years, in the United States and in Asia. Additionally, the Birtcher organization has engaged in asset management and repositioning assignments for major financial institutions, including the U.S. Government, as well as constructed or developed over 100 million square feet of commercial property nationally.View full profile
|Gross ann. return*||11.0%|
|Servicing and administration fee||-0.5%|
|Net ann. return to investors||10.5%|