By Michael Ross
Senior Vice President, Asset Management & Entitlements
Rockspring Capital’s management team has worked very hard in the past 12 months to find properties that generate immediate cash flow for fund investors. This is in order to balance out the more traditional two to three year investments that provide capital appreciation.
Here’s a recap of a couple of the team’s recent investments that exemplify this strategy:
– In early June, we announced the sale 46 of the original 117 finished or fully entitled residential lots in New Braunfels, Texas. They were acquired just four months earlier in January. The remaining lots are under agreement with the same home builder and are slated to close February 2013. In the event the pending transaction closes as agreed in February 2013, this entire transaction will deliver a net investor unlevered IRR of 80 percent plus in one year.
– Our team also made a $7.8 million bridge loan to the new operator of the Harborwalk project, a 550-acre master planned community in Galveston County, Texas. The Harborwalk property features several hundred developed and undeveloped lots, a sales office, a marina which can be expanded, a retail store, a swim center and a yacht club with a restaurant. Also included in the deal are 400 acres of land, which can be further developed, and millions of dollars in municipal utility district receivables. This two-year bridge loan is at the rate of 18 percent.
These investments demonstrate that Rockspring is continuing to execute on its business plan as promised to investors. We’re making generational investments in Texas land because of the dislocation in the lending market and we have a pipeline full of similar opportunities.