ArborCrowd Launches Single-Family Build-to-Rent Investment Offering in Colorado Springs, CO
Targeting 18% to 23% net internal rate of return over a two- to four-year hold period
ArborCrowd, the first crowdfunding platform launched by a real estate institution, announced a new offering that allows investors to acquire equity interests in Selby Ranch, a single-family rental (SFR) and build-to-rent (BTR) development located in Colorado Springs, CO. with a total capitalization of $61.65 million. The offering enables individuals to invest in the SFR and BTR asset class, one of commercial real estate’s fastest growing and most in-demand sectors. Representing approximately 17 percent of the overall single-family housing market, the SFR asset class has seen significant institutional investment, driving increased competition and creating higher barriers to entry for individual investors.
AHV Communities (AHV), a leading, vertically integrated developer and operator with extensive experience in the build-to-rent asset class, is part of the project’s sponsorship group. Affiliates of ArborCrowd, AHV and MDO Capital, a commercial real estate finance firm, have collectively funded 30 percent of the deal’s total equity. Arbor Commercial Mortgage, a national direct lender and member of The Arbor Family of Companies alongside ArborCrowd, provided a $46.24 million loan to finance the construction of the project. ArborCrowd now seeks to raise $10.79 million from investors for the remaining equity, which an ArborCrowd affiliate has prefunded into the transaction. The project is expected to break ground in 2022 and complete construction in 2024.
The Selby Ranch deal is an especially attractive investment opportunity due to:
- The continued prominence and growth of the single-family build-to-rent asset class, which has seen more than $45 billion of institutional investment in 2021 and 14.7 percent year-over-year national rent growth ending in October 2021.
- Strong sponsorship in AHV, an experienced developer of build-to-rent communities having developed 13 communities containing over 2,200 homes since 2013.
- The Arbor Family of Companies’ unparalleled experience in single-family rentals, having pioneered a specific lending program for the asset class in 2019.
- The alignment of interests between ArborCrowd and investors in the deal’s capital stack, in which a member of its management team is also personally invested.
- Colorado Springs’ booming metro area, which has experienced population and employment growth far exceeding national rates over the past decade.
“Our expansion into the single-family build-to-rent asset class represents a significant step in ArborCrowd’s broader evolution by enabling us to offer individual investors coveted access to a highly sought-after property type,” said Co-Founder and COO Adam Kaufman. “By breaking down the barriers to entry for investing in single-family rentals and capitalizing on the incredible demand for these communities across the nation – particularly in secondary and tertiary markets – we’re affording investors opportunities to generate the returns they seek. Moreover, as one of the first institutions to focus heavily in the space, our management team is uniquely positioned to evaluate and invest in single-family build-to-rent projects.”
Mr. Kaufman continued, “Selby Ranch in particular is an ideal project to launch our first investment offering in the single-family rental space as it meets our rigorous underwriting requirements and provides exposure to the thriving Colorado Springs market, which features a distinct balance between suburban and urban lifestyles. As factors that include rising home prices, remote work trends, migration to suburban locations and an aging millennial population continue to drive interest in single-family rentals, we see significant growth for this asset class on the horizon.”
Once completed, Selby Ranch will feature 163 three- and four-bedroom units with an average size of 1,310 square feet. Spanning roughly 13.2 acres, the townhome-style single-family units will be spread across 47 buildings and include attached two-car garages, stainless steel appliances, and central air conditioning. Proposed shared amenities consist of a community clubhouse, pool, fitness center and children’s play area.
The Colorado Springs Metropolitan Statistical Area (“Colorado Springs MSA”) is the second largest in Colorado after Denver, with a population that’s expected to grow to nearly 770,500 residents by 2026. Its high quality of life, vibrant downtown, affordability and flourishing business climate, which is bolstered by major employers including Lockheed Martin, Boeing, Raytheon and L3 Harris Technologies, have contributed to population growth that has doubled the national average from 2010 to 2021. Additionally, Colorado Springs offers numerous highlights for residents, including more than 50 major outdoor attractions and parks, the U.S. Olympic & Paralympic Museum and Pike’s Peak, one of America’s most prominent mountains.
To learn more about Selby Ranch and access the offering overview and private placement memorandum, which includes market reports, property details, risks, financial pro formas and more, please visit https://www.arborcrowd.com/selby-ranch-sfr-community.
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, 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.
