C-Star SFR Fund Continue Distributing Dividends with Full Four-month Rent Collection
C-STAR SFR FUND CONTINUES DISTRIBUTING DIVIDENDS WITH A FULL FOUR-MONTH RENT COLLECTION
New York, April 15, 2020: C-Star SFR Fund I has distributed the first quarter 2020 dividend of $0.5 per unit, representing a 5% annual dividend. As of the first quarter of 2020, C-Star SFR Fund I has achieved a portfolio of 100% leased rate, 7.7% capitalization rate, 7.8% current year Cash-On Cash and 21.1% projected 3-year IRR. Sherry Li, Founder and Chief Executive Officer, said, “2020 is a difficult year; it’s also a year for us to thrive from a reflection of our investment strategy and business model, not only pursuing growth during an appreciation period but also sustainability in a difficult economy.”
C-Star continues to generate quarterly cash returns for investors, and we have reserved extra cash balance to weather any changes in upcoming May and June due to COVID-19.
The Trend of the U.S. Single-Family Rental Market
During the pandemic, some changes in how people live, and work affect people’s preferences for housing locations and living conditions.
1. Seeking Healthcare Security
The pandemic has made people realize the importance of healthcare, and people will pursue suburban communities with better medical facilities and conditions. In the U.S., urban areas are usually populated at a higher density, equipped with older public facilities and medical facilities, and fewer doctors per capita. The medical facilities in the suburbs are relatively new, the population density is small, and the number of doctors per capita is high. People are more likely to live in the suburbs seeking healthcare security.
2. From Apartments to Single-Family Homes
In March and April, we received a lot of applications from renters, many of whom were moving out of apartment buildings in the urban areas and looking for single-family rentals in the suburbs. Most apartment buildings are located downtown, with a dense population and people traveling by public transportation. Single-family homes are located in suburbs with a lower population density, and people travel mainly by car, which can effectively reduce the spread of infections.
3. Working From Home Becomes a New Norm
Working from home is changing the way people live during the pandemic. With people spending more time at home, housing demand rises, and more people are pursuing high quality of living. The cozy, spacious spaces and home offices have become the most important factors for renters when they choose where to live. People worry less about the commute distance but pay more attention to the quality and conditions of living. As working from home becomes a new norm, single-family homes in the suburbs will become more preferential for people to live in.
4. The U.S Housing Supply Remains Low and Continues to Fall
The U.S. housing supply has fallen sharply since the 2008 global financial crisis and has not returned to normal. In the meanwhile, U.S. home-building activity collapsed in March as the coronavirus spread, with housing starts tumbling 22.3% from a month ago. (The Commerce Department) The continued decline in supply and increased demand for single-family homes in the suburbs are expected to be buoyant after the pandemic.
About C-STAR
C-STAR is a real estate investment management firm primarily in the Single Family Rental sector. It was founded in February 2018 and is headquartered in New York.
C-STAR successfully closed and fully deployed Fund I in June 2019 and aggregated a $5.7 million portfolio. It contains 36 assets located in 9 counties of Atlanta MSA.
In July 2019, C-Star launched Fund II, which targets raising $20 million USD of equity for investments in Atlanta and Triangle Charlotte MSA. C-Star SFR Fund II has made meaningful progress on fundraising, acquisition, financing, and asset management ever since its inception in October 2019. By the end of March, SFR Fund II had raised $7.12 million in equity and had closed eight acquisitions of single-family homes in the Atlanta metro area. 7 of 8 homes have been leased quickly after closing with an average lease-up period of 8 days. The average time between the renovation completion and the tenant's move-in date is 20 days.
Investment Strategy of Fund II:
Key Terms of Fund II:
Minimum Capital Commitment: $100,000
Investment Term: 3 years +1 year +1 year
Distribution: Initially, 5% – 6% increase annually, distributed quarterly
Target IRR: 18% – 20% gross
Acquisition Fee: 2% of Purchase Price
Asset Management Fee: 25bps on AUM annually
Note: C-STAR SFR Fund II has filed with the United States Securities and Exchange Commission (“SEC”) under Regulation D 506(c). www.sec.gov.