Realized Deal : Willow Creek GSO Portfolio

Sponsored By Willow Creek Partners

Risk Profile
Amount Invested
Targeted IRR
Actual IRR*
Targeted Equity Multiple
Actual Equity Multiple*
Targeted Hold Period
5.0 years
Actual Hold Period
3.3 years

In July 2017, Willow Creek Partners (“Willow Creek”) launched an offering for a 456-unit portfolio consisting of three multifamily apartment communities located in Greensboro, North Carolina.

Willow Creek had acquired the properties off market from the same seller in mid-June alongside an institutional capital partner, which had provided approximately 83.5% of the total required equity. Willow Creek sought to recapitalize a portion of its original equity contribution in order to reduce its co-investment in the deal.

The properties had all undergone renovations ranging from light to significant within the last several years, but each of them was lagging in rental rates versus competitors. Willow Creek’s business plan included inserting a professional management company which would implement an aggressive marketing and outreach campaign, and thus help capture rental increases. Furthermore, Willow Creek intended to leverage the expertise and systems its management company had in place to streamline property operations, revenue optimization, expense control, and investor/owner reporting.

Project Timeline

Portfolio Performing Well

December 2018

At the end of 2018, the average occupancy for the portfolio stood at approximately 95% and all three properties were performing well, producing an annualized cash yield of 8.4% to investors. Since acquisition, Willow Creek had deployed significant capital to improve both the curb appeal of the assets and to address deferred maintenance items. Additionally, Willow Creek was moving forward with purchasing washers and dryers (previously leased from a supplier), which would allow for higher returns while keeping the costs the same or lower to residents.

BOVs Received

December 2019

The portfolio continued to perform well throughout 2019 and as a result, in the fourth quarter, Willow Creek solicited broker opinions of value (BOVs) for each of the properties, receiving feedback from three separate groups. The valuation estimates obtained compared favorably to the original acquisition price and Willow Creek elected to begin the full marketing of the portfolio for sale, with an initial marketing launch scheduled for early February 2020.

Successful Sale

November 2020

After some delays in early 2020 due to the pandemic, in November 2020, Willow Creek successfully sold the portfolio for a price that was in-line with the projected sale price originally underwritten for a year five exit.

Final Outcome

Good business plan execution, including effective property management, property upgrades, organic rent growth, and unit renovations, created the opportunity for Willow Creek to successfully exit the investment and achieve strong returns for investors.

*Net of the most onerous fees charged to clients of CrowdStreet Advisors, LLC, our registered investment advisor subsidiary; an investor’s actual returns on a realized investment may differ.

This report contains explanations of a series of events associated with the Willow Creek GSO Portfolio offering that resulted in an approximate 16.3% (net of most onerous fees) IRR 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.

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