Ballast Rock, an investment management firm specializing in real estate, has released its 2024 performance data for Sunbelt Multifamily Funds I and II, showcasing consistent returns and strategic positioning in the workforce housing market.
Sunbelt Multifamily Fund I (SB1), launched in 2019, has successfully navigated the real estate landscape by acquiring nine properties totaling 1,110 apartment units for $63,630,000. The fund began property dispositions in early 2022, generating gross proceeds of $70,550,000 from selling the first five properties. These properties were acquired at an average cost of $52,387 per unit and sold at an average of $102,395 per unit, demonstrating significant value appreciation.
To date, SB1 has distributed $50,768,242 to investors on an initial equity investment of $32,000,000. The fund anticipates exiting its remaining four assets opportunistically over the next 12 to 18 months, potentially continuing its trend of strong financial performance.
Sunbelt Multifamily Fund II (SB2), which launched in 2021, completed its property acquisition phase in early 2023 with nine properties totaling 1,049 units purchased for $105,363,000. In 2024, the fund generated a 7% cash return from operations and maintained a consistent capitalization rate of 7.0% throughout the year.
The fund has maintained a steady distribution strategy, paying investors 7.5% from income in 2021 and 2022, reducing to 7.0% in 2023 and 2024. SB2 has distributed $10,500,000 to investors from an approximate $52,500,000 equity investment and made its first property disposition in February 2025.
Thomas Carroll, Ballast Rock's CEO, highlighted the company's disciplined approach in a challenging real estate environment. Unlike some private equity real estate funds that have suspended distributions or requested additional capital from investors, Ballast Rock has maintained its commitment to investor returns.
Looking forward, the company has launched Sunbelt Multifamily Fund III (SB3) in July 2024, targeting $100 million in equity. The Atlanta-based real estate team continues to carefully underwrite and evaluate potential workforce housing properties in the Southeast, emphasizing a strategic and selective approach to investment.
Ian Garcia, Chief Operating Officer of Ballast Rock Real Estate, expressed confidence in the company's strategy, stating that the Southeast market presents excellent opportunities for acquiring properties at attractive valuations while maintaining rigorous investment standards.
The performance of these funds underscores the potential resilience of workforce housing investments, even in volatile market conditions. By focusing on affordable, clean, and well-managed properties, Ballast Rock demonstrates a commitment to delivering value for both investors and residents.
