For those invested in our Infinite Alpha Growth 2017 Portfolio, here is an update regarding the status of our three multi-family real estate projects. The good news is that all are on schedule and on budget. The manager anticipates a projected development yield of around 7% and a projected IRR of 17.7% for Mishawaka, IN, 16.1% for Huntsville, AL, and 15.2% for Colorado Springs, CO.
THE VILLAS ON FIR: MISHAWAKA, INDIANA
Market Update
The South Bend/Mishawaka MSA has a projected unemployment rate in October of 3.6%, which is 0.5% below the national average of 4.1%. Overall, the rental market remains strong as the comp set is currently 93% occupied and 94% leased. Grandview Flats and River Rock, both of which were in lease up in early 2017, have now fully stabilized. The Four Winds Casino (located less than 10 miles from The Villas on Fir) is still scheduled to open in early 2018 and will bring 1,200 new jobs to the region. In addition, the ongoing resurgence of the RV and automotive industries in the adjacent Elkhart-Goshen region has resulted in 4,900 new manufacturing jobs this year.
Construction Progress
Mishawaka construction continues to progress well, and the project is really starting to take shape. Site utilities are near completion, and three phases of asphalt binder are complete. Curbs and sidewalks for paving purposes are complete on four phases of the site. Six “big house” buildings have shingles and are dried in, with drywall installation underway. Big house 7 has roof deck and is ready for shingles, and framing has started on big houses 8, 9 & 10. Interior finishes are being installed in the clubhouse, and the pool is nearly ready for plaster.
BRIDGE STREET TOWN CENTRE: HUNTSVILLE, ALABAMA
Market Update
Huntsville has continued to show a strong job market as we near the end of 2017. Year over year, job growth (October) shows an increase of 5,600 (2.45%) for the MSA while year to date, Huntsville has experienced 7,700 added jobs. Coupled with strong job growth, Huntsville has a projected unemployment rate in October of 3.1%, which is 1% below the national average of 4.1%. Overall, the rental market remains strong as comparable property occupancy remains at 94%. Huntsville continues to have job growth indicating future growth of the city. A major employment announcement in recent months: Aerojet Rocketdyne has made a $27 million investment in Huntsville. This investment includes a 135,000 manufacturing facility as well as a new headquarters within Cummings Research Park. In total, the development will account for a minimum of 705 new jobs at an average salary of $79,560.
Construction Progress Construction on Huntsville is off to a great start. Curb and base for the roadways are being placed and underground utilities are 90% complete. The first slab pour is scheduled for the end of the week of December 4th, and it is anticipated that asphalt will be placed before the end of the year.
UNION: COLORADO SPRINGS, COLORADO
Market Update
Market fundamentals remain strong in Colorado Springs with a trailing 12 rent growth of 7% as of October 2017. Market wide vacancy stands at 4.4% while our sub market maintains an impressive 3% vacancy rate. Given its proximity to Pike’s Peak and the front range, Colorado Springs continues to be one of the most sought after places to live, and ranked as the 2nd most desirable place to live by US News and World Report in 2017. Colorado Springs currently has an unemployment rate of 3.1%, which is a full percent below the national average. El Paso County, home to Colorado Springs, is projected to gain 410,163 residents– a 58.6 percent increase – by 2050.
Construction Progress Construction is underway and progressing well. Site utilities, beginning with a sanitary sewer are currently being installed. Retaining walls are underway, and underground plumbing is being installed under the first building
TIFFANY SPRINGS: KANSAS CITY, MISSOURI
Market Update
North Kansas City, Missouri Platte County remains one of the most intriguing sub-markets in the Kansas City metro area. Occupancy in Platte County, 95.3% outpaces the Kansas City Metro occupancy of 94.8%, and there was an annual rent growth of 2.3% in 2017. According to US Census Estimates, Platte County has experienced a population growth of 10.1% since the 2010 census outpacing all other Missouri counties. The job market remains strong in Kansas City with an unemployment rate of 3.2%, nearly a full percent under the nation’s rate of 4.1%.
Construction Progress
Earthwork has been completed and underground site utilities are being installed. Building pads are complete. Several have been stabilized so that under slab work can begin and slabs can be poured in the next few months. Retaining wall construction will begin this month.
