Cottonwood Makes Preferred Equity Investment in New York City Multifamily Development Project
August 6, 2020 | Cottonwood Communities, Inc.
Cottonwood Communities, Inc. (“Cottonwood Communities” or the”REIT”), a publicly registered non-traded real estate investment trust, has closed on a preferred equity investment of $15 million toward the development of a three-building, 534-unit multifamily apartment community located on a 2.5 acre waterfront site in the Astoria neighborhood of Queens, New York (the “Astoria Investment” or the “Project”).
The total development cost is estimated to be $342 million and the Project is sponsored by a New York-based real estate development, investment and management firm.
The REIT has contributed at a preferred return of 13% per annum and receives a a profit participation upon a liquidity event, pari passu alongside a $40 million preferred equity contribution from it’s co-investor, a publicly-traded multifamily REIT.
The preferred equity investment has an expected redemption of July 2025 and is positioned senior to approximately $62 million in common equity from the developer and its equity partner. Additional funding for the Project will come from a $225 million construction loan.
Construction has commenced on the Project with the majority of the foundation work now complete. The first units are slated for delivery in the second quarter of 2022.
The Project will feature 50,000 square feet of central courtyard/green space and 7,089 square feet of rooftop amenities including a 3,962-square-foot pool deck, outdoor barbecues and lounge areas. Indoor amenities will include a golf room, a music room, an arcade and party room, coworking spaces, and a communal lounge with unobstructed views of the East River and Manhattan skyline.
The Project is located within a few blocks of the Astoria Ferry station and less than a mile from the nearest subway station, offering convenient transport to Roosevelt Island, Midtown Manhattan and the greater New York City metropolitan area.
The foregoing includes forward-looking statements. These statements include statements regarding the intent, belief or current expectations of the REIT and members of the management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “will,” “would,” “believe,” “expected,” or similar expressions. These forward-looking statements include, but are not limited to, statements regarding the plans for the Project, the development costs of the Project, and the expected commencement and completion date of the Project. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. The REIT undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: a change in the scope, budget or timing of the Project including the failure to receive building permits and approval by the city for the Project plans and other risks inherent in development projects such as cost overruns and schedule delays.
