Cottonwood Communities Inc., a publicly registered non-traded real estate investment trust, has agreed to provide a preferred equity investment of up to $15.1 million towards the development of a 285-unit multifamily apartment community located on a 3.6-acre site along the Sacramento Riverbank in West Sacramento, California.
The total development cost is estimated at $102.6 million, and the project is sponsored by an affiliate of CA Ventures, an international real estate investment and development firm headquartered in Chicago.
Cottonwood Communities is expected to contribute up to $15.1 million for preferred equity interests in the joint venture which will be senior to CA Ventures’ expected contribution of $16.8 million for common equity.
Additional funding of $70.7 million will come from a construction loan and an additional preferred equity investment from Parse Capital LLC that will be senior to the Cottonwood’s investment.
Construction is expected to begin during the fourth quarter of 2020 with completion slated for the Fall of 2022. Onsite amenities are expected to include a pool and sun deck, fire pits and barbeques throughout the property, an indoor and outdoor fitness and yoga studio, private meeting rooms and a bike lounge.
The project is adjacent to the River Walk Park and within walking distance to a AAA baseball stadium. The project is also less than a mile from a downtown business and entertainment district, Golden 1 Center, home of the Sacramento Kings, Capitol Mall and the California State Capitol building.
Cottonwood Communities launched its $675 million offering in August 2018 and has raised $115.5 million as of September 30, 2020. As of the third quarter of 2020, the REIT owned multifamily apartment communities in West Palm Beach, Florida and the Greater Boston, Massachusetts area; issued a B Note secured by a deed of trust on a multifamily development project in Allen, Texas; made a two preferred equity investments in multifamily development projects in Ybor City, Florida and Queens, New York; and entered into an agreement to provide a preferred equity investment for a multifamily development project in Denver, Colorado.
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