To our valued investor partners and supporters,
As we prepare to move into the next phase of growth at 52TEN, we want to take a moment to reflect. We’d also like to share a preview of our second fund and new focus, both shaped by the lessons we’ve learned along the way.
Fund I: Success paves the way
As we reflect on the highlights of the past five years, what really stands out are the investor relationships we’ve been blessed with. It is our sincerest wish to thank each of you for trusting us as stewards of your capital, spreading the word about 52TEN, and playing a vital role in the success of Fund I. We are honored to have you on the journey with us.
We also want to pause and celebrate the success of Fund I, which currently owns six communities and is about to complete its last capital raise. To all of our Fund I investors, give yourselves a pat on the back for your part, and now sit back to enjoy the rest of the ride.
The Fund I portfolio is outperforming the initial projections that were established as each community was acquired, which will result in better returns this year, and for years to come. We’re extremely pleased with the performance and look forward to pursuing a similar strategy as we launch Fund II.
Introducing: Fund II
Building on the success of Fund I, we are excited to announce a second income and growth fund built around recession-resistant mobile home communities. This second fund, called “Fund II,” will continue to focus on mobile home communities, with a few key pivots.
Similar to Fund I, our second fund will seek to acquire underperforming properties in good locations for the purpose of repositioning over an average holding period of five to seven years. During ownership, the fund will seek to optimize performance and increase the value at each property, while distributing cash flow to investors.
A few key pivots
As we introduce Fund II, some of the lessons we’ve learned over the past five years have provided a new focus. Fund II will continue to prioritize mobile home communities, with two slight shifts:
PIVOT TO QUALITY
The success of Fund I was partly because we were able to acquire cheaper properties in tertiary markets. Fund II will focus on improving the quality and the location of properties, with the underlying belief that quality will outperform cheap over the long term.
PIVOT TO LARGER PROPERTIES
Fund I included several smaller properties that were ideally suited to achieve the fund’s goals, yet taught us important lessons. Fund II will focus on larger properties that will offer greater economies of scale and allow us to operate more efficiently than has been possible with smaller properties.
Due to these pivots, Fund II will expand the target geographic area as we seek communities to acquire. We still love Arizona and will continue to acquire communities within the state. We are also bullish on a dozen cities across the Sun Belt that are growing faster than the rest of the country and experiencing the greatest shortage of affordable housing.
Fund II will be a $30 million equity fund established as a 506(c), which closes the door to non-accredited investors, while opening the door to the general public. We are also considering a future private offering that will accommodate investors seeking a 506(b) opportunity.
New fund, same mission and investor experience
Here at 52TEN, we remain committed to investing in mobile home communities as a recession-resistant strategy. This focused strategy, coupled with our disciplined business approach will prove to minimize risk, maximize yield, and insulate the portfolio from volatility.
We also remain steadfast in our aim to provide a comfortable, transparent investment and the best experience in the industry.
Fund II is scheduled to open for commitments starting in June 2021. The first invitations will go to our existing investors who meet the minimum requirements, followed by qualified members of the general public.
If you’re interested in learning more about Fund II, we would love to hear from you. View the prospectus, then schedule a meeting with us. We look forward to continuing our partnership and exploring new opportunities with you.
Jack & Nate
This content is the perspective of the author and is not intended to be relied upon as a forecast, recommendation or investment advice, and is not an offer or solicitation to buy any securities or to adopt any investment strategy. The information and opinions contained in this content are derived from experience, historic data, and other sources deemed to be reliable, are as of the date of this content, and may change as subsequent conditions vary.