CFO CORNER: RISE48 EQUITY PORTFOLIO UPDATES SEPTEMBER 2021

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Updates on Rise48 equity

Operations Update

August was another great month for the Rise48 Equity Portfolio. We were able to increase in place rents by 4.7% compared to the previous quarter. As it relates to NOI, we’re exceeding our pro-forma budgets across the portfolio and feel that all of the properties are performing very well. We’ve had some operational hiccups along the way primarily related to staffing. However, we’re actively working with our PM to ensure we minimize these types of disruptions.

CAPEX UPDATE

To date, we’ve renovated around 180 units this year and renovated more than 35 units last month. Our average rental premium for renovated units was just above $220 per unit (monthly increase). At a 4.5% cap rate, this means that we’re adding almost $60,000 in value for every unit that we renovate at each property.


On the exteriors, we’re making sure all of the signage is being installed this month.

Phoenix MSA UPDATE

Phoenix Metro continues to outpace the nation in rent growth. Realpage reported a year over year increase of more than 24% in rental growth in the market. Yardi reported a similar increase of just under 20% year over year rental increase for workforce housing with more than 3.5% increase month over month. Yardi anticipates Phoenix to have approximately 15.7% rental growth for the next 12 months.

Phoenix also ranked #1 in the nation for home price growth. According to the S&P CoreLogic Case-Shiller report, Phoenix home prices grew 29.3% year over year while national home prices grew about 18.6%.

August’s unemployment rate also dipped down to just 4.8%, according to the US Bureau of Labor Statistics. In August, Arizona returned to pre-pandemic levels of employment, joining Idaho and Utah as the only states that have recovered so far.

 

From a macro perspective, BLS reported the month over month inflation increased by 0.3% which adds up to a 5.1% increase year over year. The Fed expects inflation to ease down to 4.2% by the end of the year and further cool down to 2.2% next year assuming the impact of the COVID-19 Pandemic fades out.

 

Rise48 Equity has completed $323,176,000 in total transactions since 2019, and currently has $283,176,000 of Assets Under Management, all in the Phoenix MSA.

To learn more about our investments, schedule a call: www.rise48equity.com/invest or visit our website: www.rise48equity.com