ArborCrowd Exits Sioux Falls Multifamily Portfolio Investment, Exceeds Initially Targeted Internal Rate of Return
May 18 2020 - 12:00PM
Business Wire
Real estate crowdfunding platform’s diligent
asset management approach generates strong profits for investors in
challenging market environment
ArborCrowd (the “Company”), the first crowdfunding platform
launched by a real estate institution, announced today that it has
exited its investment in the Sioux Falls Multifamily Portfolio, a
collection of Class B apartment communities located in Sioux Falls,
S.D. This strategic decision generated a net internal rate of
return (IRR) of over 16 percent, exceeding the original targeted
net IRR of 12 to 14 percent.
The Company’s decision to exit the 707-unit Sioux Falls
Multifamily Portfolio investment was based on a number of factors,
including changes the sponsor sought to make to the business plan
that could have materially impacted the initially projected returns
and investment horizon. These changes were determined to be too
much of a deviation from the original business plan, and the
Company was able to negotiate an exit from the investment that
generated strong profits for investors in a challenging market
environment.
“What sets ArborCrowd apart from our competitors is not only our
approach to sourcing and underwriting investment opportunities, but
also our commitment to active asset management and our unique
ability to identify and mitigate potential risks,” said Adam
Kaufman, Co-Founder and COO of ArborCrowd. “Our longstanding
philosophy of responsible investing doesn’t stop when we commit
capital to a deal – we closely monitor and continually evaluate
each investment throughout its lifecycle. This approach is
particularly important as we enter an economic and real estate
downcycle.”
The exit from the Sioux Falls Multifamily Portfolio after a
13-month period came well ahead of the initially projected three-
to five-year hold period. The outsized IRR generated by the sale
marks the third ArborCrowd investment to exceed its targeted IRR.
The other two investments – the Southern States Multifamily
Portfolio and Quarry Station Apartments – were realized ahead of
schedule in 2018 and 2019, respectively.
Kaufman added, “Now more than ever, it’s incumbent upon real
estate crowdfunding platforms to work even harder on behalf of
investors to monitor the performance of current investments and to
rigorously evaluate new deals they bring to the crowd – especially
as the real estate industry at large works to determine how the
current market environment will impact asset valuations. At this
point in time, we believe it is irresponsible to not take a pause
before introducing new offerings to the crowd until the initial
impact of the current economic challenges are better known.”
About ArborCrowd
ArborCrowd is the first real estate crowdfunding platform
launched by a real estate institution, opening up an exclusive
network to a new class of investors. As part of The Arbor Family of
Companies, which includes Arbor Realty Trust (NYSE: ABR), a leading
publicly traded commercial mortgage real estate investment trust,
ArborCrowd is backed by more than 30 years of leadership
experience. ArborCrowd reviews more than 500 deals a year from its
proprietary network and only chooses the ones that survive its
rigorous underwriting process. ArborCrowd prefunds capital to a
deal prior to launching the offering to investors. This ensures the
deal closes and allows ArborCrowd to offer investors accurate and
detailed information about the property. Additionally, ArborCrowd
chooses to present one deal at a time, so there is no guessing what
property investors will actually own.
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version on businesswire.com: https://www.businesswire.com/news/home/20200518005545/en/
Media: Megan Kivlehan – 646-677-1807
ArborCrowd@icrinc.com
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