Cottonwood Multifamily JV to Fund Downtown Salt Lake City Property Development
Cottonwood Multifamily Opportunity Fund Inc., a Regulation A+ real estate investment trust primarily focused on multifamily construction and development projects, will fund the development of a new 254-unit mid-rise podium multifamily community.
Cottonwood Multifamily Opportunity Fund Inc., a Regulation A+ real estate investment trust primarily focused on multifamily construction and development projects, will fund the development of a new 254-unit mid-rise podium multifamily community on a 1.7 acre site in downtown Salt Lake City through a joint venture with Cottonwood Residential O.P. LP and affiliates.
The project, Cottonwood on Broadway, is expected to break ground during the third quarter of 2019, with completion slated for the Fall of 2021. The projected total development costs are approximately $73.6 million, with total equity capital contributions estimated at $30 million.
The land was purchased by Cottonwood Residential O.P. LP in a series of transactions from three separate parties from April 2016 to October 2018. In February 2019, the firm received a third-party broker opinion of value, which valued the land at $7.5 million.
Under the joint venture agreement, the fund expects to eventually contribute up to 90 percent of the capital required for the project.
It is anticipated that the developed property will be comprised of a mix of studio, one-bedroom and two-bedroom units and will include a fitness center, clubroom, and a rooftop resort-style pool.
“Situated in the heart of downtown Salt Lake City, the property will offer a vibrant “live, work and play” setting, full of nationally recognized employers, and a multitude of trendy restaurants and entertainment venues within walking distance,” the company said in a statement.
Some of the major employers in the area include Goldman Sachs, Fidelity, Zions Bank and The Church of Jesus Christ of Latter Day Saints. The property is also located two miles from the University of Utah.
In June, The DI Wire reported that Cottonwood Multifamily Opportunity Fund fully subscribed its $50 million offering.
The fund plans to invest in multifamily construction and development projects located throughout the United States and/or make mezzanine loans to, or preferred equity investments in, entities that develop multifamily construction and development projects.
It expects to make its investments through joint ventures with affiliate, Cottonwood Residential O.P., a limited partnership whose general partner is Cottonwood Residential II Inc. Cottonwood Residential is an owner and operator of multifamily properties.
Cottonwood Multifamily Opportunity Fund is Cottonwood’s third Regulation A+ offering, following Cottonwood Multifamily REIT I and Cottonwood Multifamily REIT II, that has been fully subscribed since 2016.
Shares of Cottonwood Multifamily REIT I common stock were originally sold for $10.00 each, and currently have a net asset value of $11.31 as of September 30, 2018. The board of Cottonwood Multifamily REIT II is expected to declare its NAV later this year.
