Arabella Real Estate Fund

Founded in 2017, Arabella Capital is a Real Estate Investment & Development company which focuses on a opportunistic strategy. Since inception, Arabella has participated in both new construction & value-add opportunities. Arabella’s current portfolio consists of Build to Rent communities, self-storage facilities, multifamily, mixed-used developments, and select short term vacation rentals throughout the Southeast. The Arabella Capital Team possesses 150+ years of combined real estate investment and development experience.

Arabella Capital utilizes the wealth of experience from our team to invest in real estate and develop assets. The Arabella Capital team manages the lifecycle of each project which includes site selection, entitlements, land development, construction management, asset management, and disposition.

This fund is 10 years in the making. The fund is an open-ended General Partner Fund vehicle that will invest in residential and commercial real estate projects throughout the sunbelt region. The fund will utilize Arabella Capital’s existing portfolio as well as deploy capital into new investment opportunities. Arabella Capital is contributing its current portfolio of assets which includes land that is purchased, entitled, and ready for development to the Arabella Real Estate Fund. The portfolio also includes projects that are currently under construction. This fund has a target raise of $25 million, with an annual distribution of 8% – 12%distributed quarterly, beginning in Year 1. In Year 5, the Arabella Real Estate Fund is projecting to deliver a 40%+ IRR to the investor.

The Arabella Real Estate Fund has a target raise of $25 million but can go up to $50 million if oversubscribed.

The Fund has 2 share classes:
Class B Shares: Minimum investment of $250,000
Class C Shares: Minimum investment of $50,000
For both classes of shares, the fund has a minimum holding period of Three (3) years from the date of sale.

We are raising capital from both Accredited Investors (accreditation is verified) and Institutions.
 
Accredited Investor is defined as: earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, or earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year.
 
An Institutional Investor is defined as a company or organization that invests money on behalf of clients or members.

Annual Distributions: The Arabella Real Estate Fund will distribute an 8%– 12% annually, beginning in Year 1. Distributions will be paid out on a quarterly basis. Investors can expect to receive their first distribution at the end of the quarter following your initial investment.

Investor Internal Rate of Return (Investor IRR): After the 3 year holding period, the investor can expect to achieve an IRR of 25% in year 4.

The end of the quarter, following the quarter of your initial investment.

The acquisition fee is the fee general partners (GP’s) charge to Limited Partners (LP’s) for successfully sourcing and acquiring a real estate property that fits into the LP’s investment criteria. In the Case of Arabella our acquisition fees range from 2% – 3% of the land purchase price. The is a one-time fee, paid at closing by the JV equity partner.

For development projects there is generally a development fee for the project, paid to the sponsor for managing the development process as a service to the LP investor. This is usually based on the total hard costs associated with the horizontal development of the project. In the case of Arabella, this fee is 5% of the land development budget paid in monthly installments over the land development period.

Once a project begins vertical construction, the sponsor (Arabella) begins collecting Construction Management fees for managing the vertical construction of a project. This fee is typically charged on the vertical construction hard costs associated with a project ranging from 2.5% – 5%.

An advance given to the GP on the LP’s profit after the initial waterfall payments of the preferred return and capital investments are made. We are giving 100% of our promoted interest earned to our fund investors as Income.

Arabella is contributing a portfolio of 11 properties to the fund with a total capitalization of $451 million to the Arabella Real Estate Fund.

The Net Asset Value of a fund is the assets of a fund less the liabilities of a fund. It represents the net value or net worth of the fund and/or the net value of the issued shares to investors.

Net Asset Value is calculated by taking the total value of an asset, minus any outstanding debt and the cost of any fixed or planned capital expenses.

The NAV calculation is important because asset values drive the current and future investor level returns. Arabella has decided to offer our current share prices at a discount compared to the true NAV and value of our portfolio. Since the initial launch of our fund, the value of our portfolio has increased substantially, primarily due to land appreciation, entitlements, and unlocking value through development.

The Company will provide (i) Quarterly operating reports, (ii) Approved Annual Business Plan, including budget, (iii) annual financial statements, certified by a third-party independent accounting firm. (iv) Quarterly NAV calculation.

Class B Shares: Minimum investment of $250,000.
Class C Shares: Minimum investment of $50,000.