Palmetto Sustainable Property Fund VII, LP
United States of America
Last updated 12 May 2020, by Impactyield.
Palmetto Sustainable Property Fund VII, LP (the “Fund”) is in the marketing phase, with an intention to have an initial closing in late 2016. The Fund will acquire portfolios of stabilized Single Family Rental ("SFR") homes, located primarily in the southeast in compelling utility markets. Following its acquisition of SFRs, and at no expense to the Fund, the Fund will incorporate clean-energy modalities (specifically, roof-top solar arrays). By employing such environmentally-efficient upgrades like roof-top solar, the Fund reduces its’ tenants’ public utility spend thereby creating an immediate economic benefit for our tenants and capturing the arbitrage (in the form of additional rent) for our investors. The Fund will target investments in SFRs priced between $50 and $150k (as these homes tends to be occupied by community stewards [e.g., teachers, nurses, policemen and other median-income wage-earners] and present the greatest opportunity for meaningful reduction in utility spend in the context of an individual’s take-home pay. The Fund’s acquisition strategy will generally consider portfolio transactions with REITs to minimize transaction costs and ensure increased stabilization rates. The Fund will provide investment returns to its Limited Partners through incremental income generated by a “one-bundled” property lease coupled with the upfront monetization of the roof-top solar asset and any other clean-technologies incorporated into the SFRs.
Palmetto will use $25 million of equity to acquire ~1,050 homes and install solar technology for a $83 total levered investment. Returns will be generated by renting homes to tenants through a "triple net lease", supplementary income will be generated through the sale of the solar asset to third party investors. Palmetto's model indicates the fund has the potential to generate 16% net deal level Internal Rate of Return upon sale of SFR portfolio, assuming zero price appreciation of homes. There are several exit strategies: REIT (public or private), Asset Securitization, Public listing of company, Divestment, Merger/Acquisition, and Refinance.
Increase global percentage of renewable energy
Key performance indicators
Asset manager: Palmetto
Product track record: Fund has 6 years of track record
Target IRR: 16%
Committed Capital: 0 USD (US Dollar)
Target return category: Risk-adjusted market-rate of return
Fund domicile: United States of America
Product status: Open - committed capital
Inception year: 2016
Vintage year: 2016
Target close date: 01/03/2017
Product term: 5 year term
Assets under management: 25,000,000 USD (US Dollar)
Investment size: Min: 0; Max: 0; Avg: 0
Currency of investments: USD (US Dollar)
Currency for fund / product figures: USD (US Dollar)
Fund investments to date: 0
Fund investments to date exited or repaid: 0
Management fee: 1.5%
Carried interest: 25%
Hurdle rate: 8.00%%
GIIN Investors' Council Investment: No
Limited Partners / Investors: n.a.
Limited Partner / Investor Type: Development Finance Institution (DFI), Endowments/Foundations, Family Office, Pension Funds, Other Institutional Investors, Retail Investors
By employing environmentally-efficient upgrades like roof-top solar, the Fund reduces its’ tenants’ electric utility spend and increases their carbon offset thereby creating an immediate economic and environmental benefit for our tenants. Historically individuals who rent have struggled to benefit from distributed solar as home ownership is typically a solar requirement, Palmetto's fund enables renters to access and benefit from solar.