Real Estate Fund Quietly Purchases Entire Community Of 233 Single-Family Rental Homes In Panama City, Florida

Real estate investment platform Fundrise recently acquired Sunset Village, a community of 233 detached, single-family rental homes in Panama City, Florida. 

The purchase was made by a joint venture between two Fundrise-sponsored funds: the Flagship Real Estate Fund, which was backed by Goldman Sachs Group Inc. GS last year with a $300 million credit facility, and the Growth eREIT VII.

The joint venture acquired the community for approximately $110.2 million from a developer who completed construction of the homes in February 2022. According to Fundrise, approximately 52% of the homes were occupied at the time of acquisition. The community consists of three-, four- and five-bedroom homes.

A portfolio update posted on the Fundrise website about the latest acquisition states, “Our intent with this and other investments in single-family rental home communities is to be a long-term investor, building a scaled portfolio that generates consistent rental income, while at the same time being positioned to capture what we believe will be outsized price appreciation thanks to a confluence of demographic factors driving demand across the Sunbelt.”

According to data from Redfin, single-family homes in Panama City have increased in value by 53% year-over-year.

The company has invested heavily in the single-family rental space, especially in Sunbelt states such as Florida. The Flagship Real Estate Fund now owns at least 650 single-family rentals and several multifamily properties in Florida.

Unlike the Wall Street funds that have been purchasing large portfolios of rental properties throughout the country, the Flagship Real Estate Fund was designed for retail investors — even allowing nonaccredited investors to participate with as little as $10 through its Reg A offerings.

While most publicly traded real estate investment trusts (REITs) have produced negative returns so far in 2022, the Flagship Real Estate Fund is currently up 6.2% year-to-date (YTD) and posted positive returns during the second quarter. 

Invitation Homes Inc. INVH, the largest owner of single-family homes in the U.S., is currently down 20.3% YTD. Another major player in the single-family rental space, American Homes 4 Rent AMH, is down 17%. 

Fundrise has produced positive returns for 22 consecutive quarters as of the end of the second quarter of 2022.

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Photo: courtesy of Fundrise