Benzinga's Top Real Estate Pick - June 14, 2023

The real estate team here at Benzinga got together to select our favorite real estate investment idea from the pool of new offerings across the many crowdfunding platforms we track. 

Our Top Pick for June 14, 2023

Today’s top pick is the Ridgeline View Townhomes featured on RealtyMogul. You can find the full offering PDF here and post-closing notice here. 

Offering Snapshot:

• Property Type: Townhomes (Class A)
• Year Built: 2022
• Investment Strategy: Core Plus
• Investment Type: Equity
• Target Hold Period: 3 Years
• Estimated First Distribution: 11/2023
• Minimum Investment: $35,000
• Projected Returns - Net Investor (updated post-closing):
  • IRR: 17.6%
  • Multiple: 1.57x
  • Cash-on-Cash (average): 7.6%
• Hypothetical Return on $50k investment:
  • Year 1: $3,318
  • Year 2: $3,927
  • Year 3: $71,216 (anticipated exit)
• Offering available to Accredited investors only

Note: RealtyMogul’s platform is open to both accredited and non-accredited investors.

Click here to access this offering on the RealtyMogul platform

Why the Ridgeline View Townhomes?

While the returns profile is quite attractive, the selling point of this deal is the market. This property is located in Vancouver, Washington, the largest suburb of the Portland-Vancouver-Hillsboro Metropolitan Statistical Area (MSA) by asset value. It features all the top attributes we look for in a real estate market - a great location, a growing population, rising employment with low unemployment, rising average household income, growing rents, and a low vacancy rate.

Location

Vancouver is located across the Columbia River from Portland, Oregon, a prime location blending both urban amenities and natural beauty. This property is within 15 minutes of major tech and industrial hubs and just 10 minutes from the Portland International Airport while being just minutes from area parks and trails offering biking, hiking, fishing, and boating, giving the area a superb work-life balance rating.

Population

Over the last decade, the Portland-Vancouver-Hillsboro MSA has seen its population grow by about 1% annually, double the national rate of 0.5%. This is expected to continue going forward, as the current estimate for the next five years calls for 0.9% annual growth in the MSA compared to 0.5% nationally.

Employment

The economy in the Portland-Vancouver-Hillsboro MSA has experienced steady growth over the last decade, leading to strong employment numbers. Since 2012, employment growth in the MSA has outpaced the national average every year with the exception of 2020 due to the pandemic. In 2022, employment growth was 5.4% in the MSA, compared with 4% nationally, including a 10.7% increase in the construction sector and a 10.4% increase in the leisure and hospitality sector. 

Unemployment in the Portland-Vancouver-Hillsboro MSA is currently 3.7%, equal to the national average. However, the workforce in the MSA is expected to grow by 0.7% through 2028, well above the national average of 0.4%.

Major employers in Vancouver are concentrated in the health, education, and technology industries, including PeaceHealth, Vancouver Public Schools, Evergreen Public Schools, Kaiser Permanente, HP, and ZoomInfo. It’s also worth noting that ZoomInfo will be moving its headquarters to the Vancouver Riverfront in 2025, which is expected to more than quadruple its employee count and make it a top 3 employer based on current counts.

Income

According to Census data, the median household income in the Portland-Vancouver-Hillsboro MSA is approximately $84k, about 20% higher than the national median of about $70k. It has shown steady growth over the last decade, including a robust 14.1% increase from 2013 to 2018. 

Rent Growth

The Vancouver submarket has seen rent growth of 56% over the last decade, slightly outpacing the 52% national growth. Vancouver has been able to and is expected to continue to absorb annual rent growth thanks to Washington’s lack of state income tax, continued development of the area, and its proximity to Portland. It’s very important to note that Oregon has a state income tax, giving Vancouver a significant competitive advantage in the MSA.

Vacancy

The Vancouver submarket currently has a vacancy rate of 5.9%, well below the 6.6% national rate, and it has consistently been below the national average since 2000. In fact, since 2010, Vancouver’s vacancy rate has averaged 4.7% compared to the national average of 6.4% during that same time frame. Vancouver’s strong performance can be attributed to limited inventory growth.

The Bottom Line

The Ridgeline View Townhomes offering on RealtyMogul is today's best investment opportunity on real estate crowdfunding platforms. RealtyMogul has a solid track record of delivering excellent returns for its investors, and we think this property will be yet another successful investment for the platform.

Click here to access the Ridgeline View Townhomes offering on RealtyMogul