As we look forward to the year ahead, Danielle Miner takes the opportunity to highlight some of the notable wins for the Sunbelt Properties team in 2023.

To date, the economy has proven to be more resilient than many had anticipated and there is still a small chance that we might achieve a soft landing, despite rates remaining higher for longer than expected. However, despite the relative health of the economy for now, the funding market for startups has been and continues to be extremely challenging.

The economy continues to appear relatively robust, though there are some signs of cooling, e.g., the 07/07 jobs report reflected a slowdown in job creation from previous months. We are also seeing rental growth in our markets start to normalize – with rent increases typically more broadly in line with CPI rather than significantly leading it, as had been the case for the last couple of years.

The broader U.S. real estate market is at a turning point after more than 12 months of rate increases from the Federal Reserve. According to research from Morgan Stanley Wealth Management, more than half of $2.9 trillion in commercial mortgages will need to be renegotiated in the next 24 months when new lending rates are likely to be up by 350 to 450 basis points.

Ballast Rock sponsored the Memminger Fun Run this year. Children, parents and staff all had a wonderful time and, most importantly, the PTO raised close to $30,000 in much needed funds from both sponsors, like Ballast Rock, and through the community's own fundraising efforts.

This year we established the Ballast Rock Foundation as the vehicle for our organization's charitable giving. The mission of the foundation is to help alleviate housing insecurity in all its forms while providing transparency to donors.

One of Ballast Rock’s core principles is focusing on investments that have a positive social or environmental impact. For us, real estate investing is not just about cutting costs, increasing net operating income (“NOI”) and “sweating the assets.” It is about enhancing our residents’ living experience, empowering our staff to be the best they can be, and giving back to our local communities.

Ballast Rock Group will internally reorganize to create distinct asset management and broker-dealer divisions to support its private equity, real estate, and venture capital offerings.

At Ballast Rock, we tailor the debt structure we use to each individual real estate acquisition. We base our decision on the type of debt to use based on the nature of the property, the debt markets at the time of acquisition, our business plan for a given asset, and the expected timeframe for holding the asset, along with many other factors.

We are excited to announce the sale of College Park Apartments in Macon, GA, our fourth disposition in Sunbelt Multifamily Fund I (“SB1”).

We are excited to announce the fifth acquisition of Sunbelt Multifamily Fund II – Stone Brooke and Arbordale Apartments – 139-unit and 78-unit communities located in Dalton, GA. 

Last week Simon O'Shea (Ballast Rock CIO), Ian Garcia (Ballast Rock COO & Treasurer) and I were asked to present at a US Real Estate conference in Miami for Latin American Investors. Here are some of the topics on investors' minds at the conference.