[Private Deal Alert] Real Estate Investment Fund Targeting High Growth Markets In Sunbelt States

America has always been a nation on the move. In the 60s, 70s and 80s, millions of baby boomers and Gen X’ers moved from the Northeast and Midwest to the west coast. It made perfect sense. There were lots of jobs and affordable housing. 300 days of sunshine per year didn’t hurt either.

Today, millennials are still chasing warm weather and affordable housing like their predecessors. But they’re looking for it in a different place. The affordable housing that once attracted millions of people to the west coast is all but gone. That’s left millennials moving in droves to the sunbelt, where the weather is still warm but the housing prices are much more accessible. By some estimates, over 60% of the US population now lives in sunbelt states.

New Fund Sees an Opportunity in Sunbelt Population Growth

Sunbelt states like Florida, Arizona and Texas have a lot to offer. Not only is there plenty of affordable housing, but two of those states also have zero income tax and Arizona’s top tax bracket is only 4.5%. Besides this, these states offer lots of sunny weather and outdoor recreation.

The private equity real estate platform CrowdStreet is betting on continued growth in the sunbelt region. The platform’s latest managed fund offering, the Sunbelt Growth Fund I, seeks to give investors the opportunity to buy into multiple class A assets in a highly diversified fund for a fraction of what it would cost to acquire those assets individually.

CrowdStreet’s Sunbelt Growth Fund will look to build between 8-10 high-quality assets in several prominent sunbelt cities. Both the cities where the assets will be located, and the assets themselves, have been carefully chosen based on projected population growth and market upside.

What’s in the Sunbelt Growth Fund?

Considering the high number of millennials and retirees moving into the sunbelt, the growth fund is targeting a diverse array of assets in multiple sectors. The idea here is to give investors as diverse a portfolio across as wide a swath of the sunbelt as possible.

Specifically, the fund is considering cities like Atlanta, Miami, San Antonio, Houston and Phoenix (among others) for multifamily and build-to-rent housing developments. The hospitality sector of the fund is looking in cities like Charleston, Miami, Myrtle Beach and Tampa/St. Petersburg. On the industrial and retail front, cities like Charlotte, Nashville, Austin and Dallas are on CrowdStreet’s target list.

CrowdStreet believes that once the assets are built, Sunbelt Growth Fund I investors will benefit from solid dividends and property appreciation. If the fund performs like CrowdStreet’s previous offerings, investors should be quite happy with the results. To date, CrowdStreet has raised nearly $3 billion in capital and paid out over $400 million in dividends.

Investment Terms

Offers to invest in Sunbelt Growth Fund I are due by April 12, 2022, with funds due by April 15, 2022. The fund is open to accredited US Investors and is eligible for Self-Directed IRA contributions. Interested investors should act promptly because the fund is only accepting 100 investors.

• Minimum investment: $100,000
• Target IRR: 16%
• Target equity multiple: 1.8x - 2.6x
• Distribution period: Quarterly
• Target investment term: 5-7 years

View current CrowdStreet offerings on Benzinga Alternative Investments.

Photo: Courtesy of CrowdStreet