Atlanta Condo Pre-Development Loan

14.0%
gross ann. return*
0 mo.
term remaining
B
Investment Complete
Current Ann. Return 14.0%
Accrued Ann. Return 0.0%
Gross Ann. Return* 14.0%

Investment Details

Current Ann. Return 14.0%
Accrued Ann. Return + 0.0%
Gross Ann. Return* 14.0%
Term Remaining 0 of 12 mo.
Min. Investment $5,000
Investment Size $400,000
Underlying Security Senior Debt

Investment Summary

We are pleased to provide the opportunity to invest in Kim King Associates LLC's acquisition of a 14,000 SF lot located in Midtown Atlanta next to Piedmont Park. The site is currently vacant and was purchased off market from a long-term holder. The sponsor had originally spoken to their traditional senior lender, but because of a tight acquisition timeline, approached us for certainty of close. This investment provides the opportunity to invest in a tight supply constrained and growing market at 72% of the purchase price (61% of total acqusition costs) with a personal guarantee from a strong sponsor. The sponsor will complete construction drawings and then seek to take Fundrise out within 12 months with a senior construction loan. The developer may also pay back principal in advance, as there is no prepayment penalty. Given Fundrise's high interest rate, it is a likely scenario that the investment could be repaid shortly after the 90 day pre-payment lockout expires.

Key Deal Points

Strong Location

The Midtown area is one of the strongest submarkets of Atlanta. There is low new condo supply and high professional job growth. 1 Block from W Hotel and proposed Whole Foods Development.

Favorable Basis

The sponsor is purchasing the land for $90/SF, and the Fundrise senior debt investment will feature a basis of $65/SF. Comparable land sales in Midtown average $96 psf; 2014 Midtown sales averaged $132 psf. 

Personal Guarantee

The loan is personally guaranteed by a high net worth individual with extensive real estate experience and sufficient liquidity.

High Current Return

14% current return with a fully pre-funded interest reserve is above market for a secured position.

Active Local Sponsors

Kim King completed the first Midtown condo project in this cycle (Ansley Green). It is a 6-unit wood-frame project 2 blocks north of the subject project. 5 of 6 units have sold and the project is three months from delivery. The sponsor has a deep understanding of the immediate market, excellent track record and local reputation. 

Clear Exit Strategy

The investment is projected to exit after construction plans are completed and a senior construction loan is secured. Fundrise was presented this deal because Kim King’s traditional bank was not able to close quickly enough. There is also a high probability that Kim King refinances the Fundrise acquisition loan with cheaper capital in 90 days after lockout.

Projected Return Calculator

Principal
$5,000
Gross Annual Return* 14.0%
Term 12 mo.
Total Return*

Fundrise Rating

The Fundrise Rating is a letter rating ranging from A to E that provides investors with the ability to easily compare investments across the Fundrise platform. The Fundrise rating measures the relative risk-adjusted return of an investment. Learn more
B2
A
1
2
3
B
1
2
3
C
1
2
3
D
1
2
3
E
1
2
3
Category Assessment Points
Capital Senior to Fundrise 0% 0
Capital Junior to Fundrise 30-39% 2
Location Primary 1
Occupancy Vacant 3
Development Phase Ground-up 3
Sponsor’s Track Record $50-249 million 2
Personal Guaranty Yes -1
Overall 10 B2

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.

Risk-Adjusted Return

Capital Structure

Type Source % of Total Amount
Equity Sponsor and LPs 38.7% $569,192
Senior Debt Fundrise Investment 61.3% $900,000
Total 100.0% $1,469,192

Property Summary

The site is 0.32 acres / 14,000 SF of vacant land. Upon completion of the pre-development period, it is anticipated the Fundrise’s investment will be repaid, and a 20 unit luxury condo building will be constructed.

Address 238 14th Street
City & State Atlanta, GA
Neighborhood Midtown
Product Type Residential / Multifamily
Project Phase Acquisition / Pre-Development

Market Summary

Atlanta is the largest city in the South and is considered the region’s main cultural and economic hub. The Atlanta MSA is the 8th largest in the nation, and net migration is expected to top 50,000 people by year end 2016. 

About the Sponsor

Kim King Associates, LLC is an Atlanta based, full service real estate firm that creates value through commercial, residential and mixed-use development and through select acquisition and re-positioning of under performing assets.

View full profile

Fee Schedule

Gross ann. return* 14.0%
Servicing and administration fee -0.5%
Net ann. return to investors 13.5%

Other Past Investments

DC Luxury Condo Loft Conversion

Washington, DC
D
Gross Ann. Return* 15.0%
Term Remaining 0 mo.
Underlying Security Preferred Equity

Brooklyn 3-Unit Apartment Repositioning - Senior Loan

Brooklyn, NY
B
Gross Ann. Return* 11.0%
Term Remaining 0 mo.
Underlying Security Senior Debt