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Investments

ESTRELLA AT KIEST – DALLAS, TX


ESTRELLA AT KIEST – DALLAS, TX

Estrella at Kiest Affordable Housing Development by ZNE Capital and LeavenWealth closes on $3.0M Equity Investment from American South Fund Management

 The acquisition and renovation of this 232-unit apartment community will help preserve the affordable housing stock in South Dallas   

Dallas, TX – June XX, 2022 – Funding has closed on the acquisition/renovation of Estrella at Kiest, a 232-unit apartment community in Dallas, Texas. The $35.2M project will be owned and operated by ZNE Capital and LeavenWealth. This is the first multifamily investment in Dallas for American South Fund Management (ASFM), a partnership between SDS Capital Group and Vintage Realty Company. Post renovation, all 232 apartment units will be available at rental rates that are affordable to families at less than 80% of the Area Median Income (AMI) level, bringing critically-needed affordable housing to this community.

ZNE Capital and LeavenWealth are already underway on building renovations including repairs to 25 units damaged by the 2021 Cold Wave in Texas and an additional 24 units damaged in a 2021 fire. ZNE’s renovation and business model focuses on green-focused upgrades with the installation of roof-mounted solar panels, low flow water fixtures, and electrical upgrades to increase energy efficiency and promote savings at the project as well as costs to tenants. Transitioning the development to a green, sustainable projects is central to ZNE’s business philosophy.

“Estrella at Kiest continues ZNE Capital’s mission of decarbonizing existing affordable housing communities,” said Owen Barret, President of ZNE. “This project is living proof that you can decrease the carbon emissions from the built environment and preserve affordable housing.”

The Dallas-Fort Worth Metropolitan Statistical Area (MSA) ranked second in the country for overall population growth within a metro area between July 2020 and July 2021.[1] Accordingly, rents in Dallas have seen a steady increase of 18% over the past year.[2] The Estrella at Kiest renovation is comprised of 16 two-story buildings located on a 10.5-acre site. The property offers quality multifamily housing including one, two and three-bedroom unit options.

“ASFM is very pleased to finance this impactful project. Estrella at Kiest provides much needed affordable housing and directly aligns with our goal of making a difference for low-income residents and communities throughout the South,” said Deborah La Franchi, ASFM Managing Partner. “In a tight housing market like Dallas, it is crucial to preserve and renovate more affordable housing.”

“We are thrilled to continue to expand our Texas footprint to Dallas,” said David Alexander, ASFM Managing Partner. “ZNE Capital is an excellent partner in the multifamily market and similarly prioritizes investing in projects that create significant impacts within socio-economically disadvantaged areas.”

Impact funds managed by ASFM target their impact investments into distressed communities of color within a 10-state footprint across the South. Since 2018, impact funds managed by ASFM have made 18 investments in Texas, Georgia, Alabama, North Carolina, South Carolina, Louisiana and Arkansas totaling $80.0 million and over $446 million of project costs to date.

Press Release

LIFE AT ELMWOOD GROVE – SPRINGDALE, AR


LIFE AT ELMWOOD GROVE – SPRINGDALE, AR

Olive Tree Holdings and American South Real Estate Fund II Announce $23M Investment Partnership Supporting Affordable Housing

 The Life at Elmwood Grove Development to Renovate 192 Affordable Multifamily Housing Units in Springdale, AR

Springdale, AR – November 23, 2021 – Funding has been secured to acquire and begin the renovation of The Life at Elwood Grove (formerly known as Springdale Ridge Apartments,) a 192-unit affordable multifamily apartment community in Springdale, Arkansas. The 16-building garden style project is being rehabilitated by Olive Tree Holdings (“Olive Tree”). Life at Elwood Grove is Olive Tree’s 40th multifamily acquisition.  This is Olive Tree’s fourth partnership with American South Real Estate Fund (ASREF) I and II, managed American South Fund Management (ASFM), a partnership between SDS Capital Group and Vintage Realty Company.  All 192 units will be rented at rates affordable to low-income families.

“Olive Tree’s mission has centered on finding and improving existing assets or new projects that can provide quality housing to workforce households and families across the country. With The Life at Elmwood Grove, we now manage over 8,000 units of affordable housing nationally, meeting a critical need within underserved communities. The financial partnership between Olive Tree and American South Real Estate Fund II , enables us to quickly acquire and initiate project construction. This expedites our pursuit of quality developments that offer affordable rents,” said Ian Bel, Principal, Olive Tree.

The development is located near a variety of major employers that include the University of Arkansas, Tyson Foods (the second largest food company in the S&P 500 and largest employer in Springdale) and Walmart’s global headquarters. The Fayetteville MSA has experienced 2% annual growth for the past decade. Median home values in the area increased by approximately 20%, while median household income rose by just 2.3%. The Life at Elmwood Grove development offers quality housing that is affordable to the community. Income levels within a 5-mile radius of the apartment complex are below 80% of area median income (AMI), with the units being affordable to families at this income level.

Read Full Press Release

LIFE AT STERLING WOODS – HOUSTON, TX

LIFE AT STERLING WOODS – HOUSTON, TX

ASREF II ANNOUNCES FIRST INVESTMENT – IN HOUSTON

Houston, TX – August 4, 2021 – Funding has been secured to acquire and begin the improvement of The Life at Sterling Woods (formerly known as Villas on Winkler) complex into a 234-unit senior/ affordable multifamily apartment community in Houston, Texas. The project is being rehabilitated by Olive Tree Holdings and will be managed by their affiliate property management and construction management company, The Life Properties, which oversees the day-to-day operation and business plan execution exclusively for Olive Tree Holdings’ multifamily portfolio. The Life at Sterling Woods is Olive Tree Holdings’ 34th multifamily acquisition and the 13th in the Houston market.

FRIEDRICH LOFTS – SAN ANTONIO, TX

FRIEDRICH LOFTS – SAN ANTONIO, TX

SAN ANTONIO HOUSING DEVELOPMENT SECURES EQUITY FINANCING FROM AMERICAN SOUTH REAL ESTATE FUND TO CLOSE FIRST PHASE OF FRIEDRICH LOFT DEVELOPMENT

San Antonio, TX – The American South Real Estate Fund (ASREF) has provided $10.6 Million as an equity partner in a public-private-partnership with Provident Realty Advisors, a Dallas-based real estate development firm, and the San Antonio Housing Trust-Public Facility Corporation (SAHT) to transform the long-shuttered Friedrich Air Conditioning Plant in San Antonio’s East Commerce area. The $68 million Friedrich Lofts development will increase the amount of affordable housing in San Antonio’s Eastside, an area where it is critically needed.

Situated on six-acres less than two miles from downtown San Antonio, the former air conditioning plant ceased operations in 1990. For thirty-years it has been a source of blight for the neighborhood. More than 600 jobs were lost due to the shutdown, which has also to the 35.89% poverty rate in the community. The new Friedrich Lofts development at 1617 E. Commerce St. will transform the dilapidated and environmentally challenged site into much-needed affordable housing for the Eastside community. A 75-year ground lease with the San Antonio Housing Trust ensures that half, or 174 of the multifamily units will be designated for low- or moderate-income families making less than 80% and 60% of area median income (AMI).

MANCHESTER OAKS APARTMENTS – ATLANTA, GA


MANCHESTER OAKS APARTMENTS – ATLANTA, GA

ASREF DEPLOYS IMPACT CAPITAL TO PRESERVE AND IMPROVE AFFORDABLE HOUSING

Atlanta, GA – The American South Real Estate Fund has provided preferred equity capital to finance the acquisition and renovation of the 240–unit Manchester Oaks Apartments located in southwest Atlanta. ASREF’s investment will preserve the availability of affordable housing for residents in this LMI area and improve an asset that has not seen a major capital renovation in more than 10 years. The capital plan includes bringing numerous down units back online and cost-efficient exterior, interior, and common area amenity improvements that will benefit the quality of life for residents and families.

ASREF is requiring that 80% of units be affordable to individuals and families making less than 60% of area median income (AMI) and 100% of units will be affordable to those making less than 80% of AMI. The median income for residents within the census tract is 64% of the Atlanta MSA. Manchester is located in a predominately minority area (96%) with 26% of residents living below the poverty line.

ASREF partnered with Nicas Group Capital, a sponsor that focuses on the creation of high-quality affordable housing through the acquisition of blighted communities within growing metro areas.

PARK VILLAGE – HOUSTON, TX


PARK VILLAGE – HOUSTON, TX

ASREF INVESTS WITH REPEAT SPONSOR TO ENHANCE MULTI-FAMILY COMMUNITY WHILE MAINTAINING AFFORDABILITY

Houston, TX – The American South Real Estate Fund has provided preferred equity capital to finance the acquisition and renovation of a 312–unit affordable multifamily community located in the working-class Alief submarket, the most diverse community in the entire Houston MSA. ASREF’s investment will preserve and improve the quality of affordable housing for residents in this LMI area and reposition a community that has had only limited capital infusion by previous owners. The capital plan includes addressing mechanical and roof deferred maintenance, as well as exterior, interior, and common area amenity improvements that will benefit the quality of life for residents and families.

The community is subject to a Land Use Restriction Agreement (LURA) that extends beyond the term of ASREF’s investment that mandates 100% of the units be leased to individuals and families whose income is 60% or less of area median income. The median income for residents is only 45% of the Houston MSA. The community is located in a predominately minority area (95%) with 37% below the poverty line.

ASREF partnered with a value-add investor with significant holdings in Atlanta and Houston that focuses on improving the quality of undervalued or blighted Class B and C properties in low and moderate-income neighborhoods.

AFFORDABLE MULTIFAMILY – HOUSTON, TX


AFFORDABLE MULTIFAMILY – HOUSTON, TX

ASREF DEPLOYS IMPACT CAPITAL TO PRESERVE AND IMPROVE AFFORDABLE HOUSING

Houston, TX – The American South Real Estate Fund has provided preferred equity capital to finance the acquisition and renovation of a 309–unit affordable multifamily community located in southeast Houston. ASREF’s investment will preserve the availability of affordable housing for residents in this LMI area and improve an asset that has not had a major renovation in over two decades. The capital plan includes cost-efficient exterior, interior, and common area amenity improvements that will benefit the quality of life for residents and families.

The community is subject to a Land Use Restriction Agreement (LURA) beyond the term of ASREF’s investment that mandates 100% of the units be leased to individuals and families whose income is 60% or less of area median income. The median income for residents is only 28% of the Houston MSA. The community is located in a predominately minority area (82%) with 32% below the poverty line.

ASREF partnered with a value-add investor with significant holdings in Atlanta and Houston that focuses on improving the quality of Class B and C properties typically in low and moderate-income neighborhoods.

ST. JAMES HOTEL – SELMA, AL

ST. JAMES HOTEL – SELMA, AL

ASREF PROVIDES FINANCING TO ACQUIRE AND REDEVELOP HISTORIC ST. JAMES HOTEL

Selma, AL – The American South Real Estate Fund has provided $3.4 million to Rhaglan Hospitality to finance the acquisition and redevelopment of a shuttered historic hotel. The St. James Hotel is situated along the Alabama River near the landmark Edmund Pettus Bridge — site of the 1965 Civil Rights march that became known as Bloody Sunday. Built in 1837, it is the only surviving riverfront antebellum hotel in the Southeast. The St. James will be one of only nine hotels in the Southeast to be part of the coveted Tapestry Collection by Hilton brand. Reopening the St. James Hotel is a top priority for the Selma Redevelopment Authority, the Mayor and City Council, as the property is viewed as a cornerstone of downtown redevelopment. Upon completion, it is projected to bring more than 40 new jobs to an area with 31.7% unemployment and nearly 54% poverty.

LANCASTER ROAD – DALLAS, TX

LANCASTER ROAD – DALLAS, TX

ASREF PROVIDES FINANCING TO ACQUIRE AND REDEVELOP A LONG-DORMANT FORMER COMMUNITY HUB

South Dallas, TX – The American South Real Estate Fund has provided a $1.75 million to E Smith Communities to finance the acquisition and renovation of a long-dormant former community hub in South Dallas’ Lancaster Corridor. The 30,000 square-foot, 2.9-acre building has been vacant for nearly 3 years and is located in a low-income census tract with over 39% poverty. The project, which is near the VA Medical Center, will add much-needed office space to the area and connects downtown Dallas to the growing International Inland Port of Dallas. The project has already garnered strong interest from potential anchor tenants that are on track to create more than 200 permanent, full-time jobs for the area’s mostly low- and moderate-income job seekers. Many of the prospective tenants also plan to bring needed services to the community.

CHATHAM MILL – WINSTON-SALEM, NC

CHATHAM MILL – WINSTON-SALEM, NC

ASREF PROVIDES FINANCING FOR PHASE II OF THE HISTORIC REDEVELOPMENT OF CHATHAM MILL

Winston-Salem, NC – The American South Real Estate Fund has provided a $1 million mezzanine loan to finance the next phase of the historic redevelopment of Chatham Mill. Phase I of this project, which was completed in 2016, included the historic restoration of the majority of the original mill structure, which created 170 workforce and affordable apartment units and environmental remediation of the contaminated site. ASREF is financing the next phase of the project, which includes the renovation of two 7,800 square foot industrial buildings that will become the new home of Two Cities Church. A third phase is anticipated to create an additional 40 multi-family units.

COMMERCE HOTEL – BIRMINGHAM, AL


COMMERCE HOTEL – BIRMINGHAM, AL

ASREF FINANCES REDEVELOPMENT OF HISTORIC BUILDING IN DOWNTOWN BIRMINGHAM INTO A HILTON-BRANDED HOTEL

Birmingham, AL – The American South Real Estate Fund has provided $3.4 Million in preferred equity to opportunistic hotel developer/operator Rhaglan Hospitality to redevelop the 14-story former Protective Life Building into the Commerce Hotel, a 96-key full-service hotel that will become part of the Hilton Tapestry Collection. The former office building is the only Art Deco-influenced, Neo-Gothic building of its size in Birmingham and has been vacant for over 10 years.

The project, which is located in a moderate-income census tract, will be an economic development catalyst for downtown Birmingham and is estimated to create approximately 90 hotel-related jobs and 50 service industry jobs upon completion.

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