REDITUM CAPITAL AGREES $11 MILLION PREFERRED EQUITY FACILITY
Reditum Capital has agreed an $11 million preferred equity facility with US asset manager Cornerstone for the development and operation of 492 affordable rental units in Kissimmee, Florida.
The international transaction was closed within a tight timeline of one month and will provide funding for the acquisition of a 25-acre site, which comprises a 436-room hotel and adjacent residential and commercial plots. Development will consist of the conversion of the existing hotel and ground-up construction on adjacent sites, resulting in a completed asset of residential apartments, resident facilities and 12,000 sq ft of complementary commercial space.
This facility builds upon the success of Reditum and Cornerstone’s previous joint venture in Kissimmee, Maingate Village. Entered into in late 2019, the Maingate Village transaction also involved the conversion of an existing hotel to residential rental units with tenant amenities and commercial space. Despite the market disruption caused by Covid-19, the construction at Maingate Village progressed on schedule and within budget, with completed units quickly achieving full occupancy and commanding higher-than-forecast rents.
“The success of our Maingate Village transaction proved the high levels of demand for affordable rental housing existent in the Kissimmee area,” commented Reditum Capital’s managing director, Mark Stephen. “We recognised the inherent profitability of this niche US market and, therefore, sought a similar transaction to build on this success with our JV partner, Cornerstone.”
Kissimmee is located in the wider Orlando region, which is consistently named the best rental market in the US and enjoys some of the most favourable rental demographics in the nation with nearly half of households renting. Despite challenging market conditions, Reditum Capital remains committed to sourcing similar opportunities within key markets and committing financing for high quality developments.