The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.
Harbert Realty Services has launched its latest real estate crowdfunding offering on the CrowdStreet Marketplace for the development of Artisan Flats Birmingham, a 120-unit boutique apartment building with a target return of 19.8%.
The Project: The property is being developed in the heart of downtown Birmingham, Alabama, where rent growth has outperformed the national average for three straight years, rising more than 10% since the beginning of 2017.
The developer is focusing on providing a tailored, boutique experience with high-end unit finishes and common area amenities to rival larger scale properties in the market.
The proforma is based on rental rates that are $50-$150 below similar-sized units at comparable properties in downtown Birmingham, allowing for an expedited lease-up and higher stabilized occupancy.
Construction of the project is planned to begin in November 2021 with completion expected by April 2023.
Investment Highlights: The total development cost for the project is budgeted at roughly $26.3 million with an anticipated sale price of $34.1 million in year three. The anticipated sale price is based on a capitalization rate of 4.75% after reaching 95% occupancy, which is in line with recent sales and rent data on comparable properties.
- Minimum Investment: $25,000
- Target Investor IRR: 19.8%
- Preferred Return: 10%
- Target Equity Multiple: 1.7x
- Target Investment Term: 3 years
Deal Sponsor: The investment opportunity is being offered by Harbert Realty Services, one of the largest privately held, full-service commercial real estate firms in the Southeast.
The company has a strong track record of providing positive returns to investors on similar projects, with realized returns exceeding target returns on four of the company's seven fully realized offerings.
Birmingham Market: Downtown Birmingham has experienced significant growth with over $2.5 billion invested in more than 75 projects over the past decade. Birmingham is also part of the sunbelt region, which is capturing increased attention from developers and institutional investors due to strong population growth and rental demand.
In fact, this region is the focus of several apartment REITs that have experienced the highest growth over the past year. Mid-America Apartment Communities Inc. MAA, which owns five multifamily properties in Birmingham, has seen a same store revenue increase of 4.7% and a 3.6% same store NOI increase from the second quarter of 2020 to the second quarter 2021.
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While real estate crowdfunding is giving individual investors access to private deals that have historically been out of reach, many of the most lucrative deals are fully funded before the average investor ever has a chance to get involved.
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The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.
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