ArborCrowd’s Lago Paradiso Becomes Latest Investment to Outperform Target Return

$98.9M Sale of 424-Unit Community in Miami Generates Strong Internal Rate of Return

NEW YORK--(BUSINESS WIRE)--ArborCrowd, the first crowdfunding platform launched by a real estate institution, is pleased to announce that its Lago Paradiso investment has become the latest deal to complete its lifecycle, providing investors with returns that outperformed initial projections. The property’s $98.9 million sale price generated a net internal rate of return (IRR) of 24.63%, surpassing the original return target of 14% to 17%.

Lago Paradiso, located in the Kendall neighborhood of Miami-Dade County, is the fourth ArborCrowd deal to be realized above the projected return target, following the Sioux Falls Multifamily Portfolio in 2020, Quarry Station in 2019, and the Southern States Multifamily Portfolio in 2018. The outsized return generated on this transaction is another example of ArborCrowd’s proven ability to source compelling investment opportunities and partner with strong local sponsors who are well-positioned to execute on their business plans.

“This outstanding result is the product of a well-executed business plan by a seasoned institutional-quality sponsor, in a market that has experienced significant growth since the property’s acquisition,” said Adam Kaufman, Co-Founder and COO of ArborCrowd. “This is the outcome we strive for each time we bring an investment to the crowd, and we’re thrilled to continue outperforming on expectations as our deals complete their investment cycles. Our access to quality deals, focus on rigorous underwriting, and one-deal-at-a-time approach is what sets us apart. We will continue to invest the necessary time and resources, and remain highly selective in the deals we present on our platform, to ensure that every one of our transactions is positioned to succeed.”

At the deal’s launch, Joe Lubeck, CEO of sponsor Electra America, commented on some of the main draws of the asset which was purchased in an off-market transaction: “It’s a very substantial and unique property, located in one of the best neighborhoods in Miami with excellent school districts, excellent police protection, significant retail and job components, and a great opportunity here for rent growth.”

Following the acquisition of Lago Paradiso in 2017, the sponsor – an affiliate of Electra America – implemented a robust capital improvement plan totaling more than $3 million, including kitchen cabinet and appliance upgrades, a fitness center upgrade and expansion, and the addition of a dog park. In addition, the sponsor was able to drive revenue growth and NOI by increasing operating efficiencies, helping it to meet or exceed pro forma expectations.

About ArborCrowd

ArborCrowd is the first real estate crowdfunding platform launched by a real estate institution, opening up an exclusive network to a new class of investors. As part of The Arbor Family of Companies, which includes Arbor Realty Trust, a leading publicly traded commercial mortgage real estate investment trust, ArborCrowd is backed by more than 30 years of leadership experience. ArborCrowd reviews more than 500 deals a year from its proprietary network and only chooses the ones that survive its rigorous underwriting process. ArborCrowd prefunds capital to a deal prior to launching the offering to investors. This ensures the deal closes and allows ArborCrowd to offer investors accurate and detailed information about the property. Additionally, ArborCrowd chooses to present one deal at a time, so there is no guessing what property investors will actually own.