Ballast Rock, a diversified investment management firm, has recently shared its 2024 performance data for Sunbelt Multifamily Funds I and II, illustrating a strategic triumph in the competitive real estate sector. Sunbelt Multifamily Fund I (SB1), initiated in 2019, has achieved notable progress in property acquisition and disposition. From February 2019 to January 2021, the fund acquired nine properties, totaling 1,110 apartment units for $63,630,000. By early 2022, SB1 commenced property sales, amassing gross proceeds of $70,550,000 from the initial five properties.
The fund's performance is remarkable, with apartment units purchased at an average of $52,387 per unit and sold at an average of $102,395 per unit. To date, SB1 has distributed $50,768,242 to investors from an initial equity investment of $32,000,000. Ballast Rock expects to finalize exits for the remaining four assets within the next 12 to 18 months.
Sunbelt Multifamily Fund II (SB2), launched in 2021, concluded its asset acquisition in early 2023 with nine properties comprising 1,049 units for $105,363,000. In 2024, SB2 produced a 7% cash return from operations and sustained a consistent capitalization rate around 7.0%. The fund has shown steady investor distributions, paying 7.5% in 2021 and 2022, then adjusting to 7.0% in 2023 and 2024. SB2 has distributed $10,500,000 on approximately $52,500,000 of invested equity. The first property disposition took place in February 2025, with strategies to exit remaining assets opportunistically over the next 24 months.
Thomas Carroll, Ballast Rock's Chief Executive Officer, pointed out the challenging multifamily real estate landscape in 2024. He underscored the firm's dedication to achieving results through focus, diligence, and discipline, alongside aligning management's interests with investors via direct capital investment. The firm also introduced Sunbelt Multifamily Fund III (SB3) in July 2024, aiming for $100 million in equity. Ian Garcia, Chief Operating Officer of Ballast Rock Real Estate, voiced optimism about the firm's southeastern workforce housing strategy and its commitment to meticulous asset evaluation.
Ballast Rock's strategy highlights the significance of strategic investment, comprehensive due diligence, and flexibility in navigating intricate real estate markets. By adhering to a disciplined investment philosophy and concentrating on workforce housing in the Southeast, the firm continues to exhibit resilience and the potential for steady returns.
