Real Estate Debt Fund II LP (Fall 2024)
Diversified debt fund with ~$100M in active loans and a 6+-year track record of returns (avg. 9.7% trailing 12-month as of Nov ‘23), lending high-yield secured senior debt at an avg. interest rate of ~12% (as of Nov ‘23).
Closed Existing assets generally with little need for capital improvements, typically in major metros, with high occupancy, longer weighted average lease term (WALT), creditworthy tenants, and rents near or above market rate.
Existing assets with typically attractive occupancy rates, but with the potential to increase cash flow or property value through light improvements, operational efficiencies, and slight increases to the amount or quality of tenants, or rental rates.
Projects requiring significant investment, improvement, and oversight to achieve goals, likely including interior and exterior renovations, operational efficiencies, leasing risk, increasing undervalued rents, and the likelihood of higher leverage.
Note: Designations are defined independently by CrowdStreet. These designations may differ from the offering documents or common industry designations. For more details regarding the specific strategy and objective for a particular deal, reference offering documents.
Project could require heavy redevelopment, full development, or repositioning to reach its highest potential value. Other situations include distress, major tenancy issues, or other risks requiring drastic intervention from a new sponsor.
Development is considered a subset of opportunistic real estate and has many moving pieces that cause these projects to be high on the risk profile. These risk factors can include pre-development risk (surveys, permitting, entitlement), vertical construction risk, arranging permanent financing, leasing, hiring property management, and so forth.
Development deals also don't provide cash flow during the construction phase–only when the property is fully constructed and stabilized can it generate income. On the flip side, development projects often target higher targeted returns than other CRE projects.
What is IRR (Internal Rate of Return) in Real Estate?
The Internal Rate of Return, or IRR, is one metric commonly used in financial analysis to evaluate and compare different investments. It represents the percentage rate earned over a defined period of time, calculated on the basis of cash flows. IRR differs from other metrics in that it accounts for the concept of the "time value of money", meaning it is calculated as the discount rate that makes the present value of all cash flows from an investment equal to zero. In more simple terms, it is the rate at which an investment grows or declines. In this sense, you can think of it as a time-sensitive compounded annual rate of return.
What is Equity Multiple as it Applies to Real Estate?
Equity multiple is a financial metric that measures the total return on an investment relative to the initial investment. It's calculated by dividing the total cash distributions received from the investment by the total equity invested. An equity multiple greater than 1.0x means the investor is getting back more cash than they invested, while an equity multiple less than 1.0x means the investor is getting back less cash than they invested. Equity multiple is typically another key metric for investors to evaluate and compare investments.
Equity Multiple Formula
Equity Multiple = Total Cash Distributions / Total Equity Invested
- Decoding Real Estate Return Metrics
- View the Equity Multiple performance of deals that have realized on our Marketplace
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Sponsor Details
CrowdStreet categorizes sponsors based on their experience and track record so our investors can get a sense of the firm behind the deal.
