Portland, OR

Realized Deal : Burnside

Sponsored By Urban Green

Risk Profile
Opportunistic
Amount Invested
$845,000
Targeted IRR
22%
Actual IRR*
49.9%
Targeted Equity Multiple
1.93x
Actual Equity Multiple*
1.73x
Targeted Hold Period
4.0 years
Actual Hold Period
1.3 years

In December 2016, Urban Green and Affinity Property Management jointly launched an offering for a 52-unit, Class-A apartment development in Portland, OR.

Affinity had acquired the site in October 2014 and contributed the land to the partnership with Urban Green below market value. Subsequently, the two sponsors entitled the property for 52 market-rate apartments and secured construction permits, which were advantageously pulled prior to the adoption of the new (and more restrictive) permit fee regime in Portland. Construction was planned over a period of 18 months, followed by a lease-up and stabilization by December 2018. The all-in delivered basis was expected to compare favorably to other newly delivered Portland multifamily projects.

Upon stabilization, the sponsors intended to refinance the project, followed by an additional year of operations and a targeted sale at the end of Year 4. However, by the time the deal launched on the CrowdStreet Marketplace, the sponsors had already received an unsolicited offer above pro forma projections from a buyer to purchase the project upon construction completion.

Project Timeline

Construction Started

March 2017

In Q1 2017, the building permit had been picked up and construction of the site work had begun. Additionally, the sponsors obtained a metro grant that would be used as part of the project funding.

Construction Loan Finalized

June 2017

In Q2 2017, the sponsors closed on the construction loan for the project. By the end of June, all of the earthwork and slab prep were completed on the site, the footings and columns were poured, and the underground utility work was completed. Construction was continuing on schedule with only minor delays, targeting a completion date of May 2018.

Early Sale Announcement

March 2018

In Q1 2018, the sponsors announced that the project was under contract for sale, remaining largely on schedule and within budget. The buyer was conducting due diligence and desired to close in late June or July, upon project completion.

Final Outcome

The sale transaction officially closed in June 2018. Attractive basis in the property, timely and on-budget construction, and overall a successful business plan execution allowed the two sponsors to take advantage of an opportunistic exit, achieving strong returns for investors, including a higher-than-projected IRR, which in part, was due to the short hold period and early nature of the exit.

*Net of fees.

This report contains explanations of a series of events associated with Urban Green’s Burnside offering that resulted in an approximate 73% (net of fees) absolute return on original equity to investors (including those from the CrowdStreet Marketplace). Certain aspects of the report such as dates of major events and the final outcome are easily verifiable while others, particularly underlying reasons behind the sponsor’s business plan execution, are not. 

The report partially relies upon the sponsor’s explanations, the information contained within sponsor-produced quarterly reports, and conference calls. This analysis is not an assertion of independently verified facts but, rather, is for informational purposes only, to convey CrowdStreet’s understanding of what transpired.

CrowdStreet makes no representation or warranty, express or implied, in relation to the fairness, accuracy, correctness, completeness, or reliability of the information contained in this report. CrowdStreet does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this report or for any decision based on it.

This communication should not be construed nor is it intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Furthermore, this communication does not establish an attorney-client relationship or constitute legal advice.