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AR Capital Residential Advisors Terminates Advisory Agreement with UDF V

American Realty Capital Residential Advisors, an affiliate of AR Capital and the external advisor to United Development Funding Income Fund V, terminated its advisory agreement with the company on March 29th, according to a filing with the Securities and Exchange Commission.

UDF Income Fund V, a publicly registered non-traded real estate investment trust co-sponsored by UDF Holdings and American Realty Capital, waived the required 60-day termination notice. No reason was given for the termination.

The REIT entered into a new advisory agreement with UDF V OP L.P., its operating partnership, and UDFH General Services L.P., its advisor. UDFH General Services previously served as the sub-advisor to the REIT.

The new agreement, which went effective on April 4th, will provide the same advisory and asset management services as the ARC agreement. It will have a one-year term, but may be renewed for an unlimited number of successive one-year periods upon the mutual consent of the parties. All terms of compensation are the same except fees will now be paid directly to UDFH General Services.

As reported by The DI Wire last month, UDF Income Fund V recently closed its offering to new investments and discontinued its distribution reinvestment plan and share repurchase program. In February, the FBI raided the Grapevine, Texas office of UDF headquarters and seized multiple boxes.

United Development Funding Income Fund V provides financing for the acquisition and development of single family residential lots. Prior to closing the offering, the company has raised $59 million in investor equity since going effective in July 2014. UDF V has originated eight loans for residential development projects, with 69 percent of the loans’ principal secured by Texas properties in the Dallas area and 31 percent secured by properties in the Houston area.

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