Orion Real Estate Partners

I invested with Orion Real Estate in the acquisition of a built-to-rent (BTR) apartment community in Utah. The original business plan called for a light value-add strategy with a 3-year hold period. Overall, the investment has performed below its initial projections. Despite maintaining high occupancy levels, significant cost overruns have impacted the bottom line. Distributions were cut to approximately 50% of the forecast. While some of these deviations can be attributed to market conditions, a portion of the budget shortfall has been within the sponsor's control. Orion secured a great loan for this project: low fixed-rate financing with interest-only payments for 10 years, and an LTV of less than 60%. This provides some security for LPs, though the initial 3-year exit timeline has been extended indefinitely. Orion has maintained good communication, providing regular quarterly reports and financials. I originally invested due to the strong Utah location and the short-term nature of the deal. Given the underperformance and the extended timeline, I likely will not invest with Orion again.

I'm in four deals with Orion. Their rigorous underwriting and strong deal flow give them a clear advantage. The Orion investments continued to cash flow through COVID and rising rates, whereas many other Sponsors paused distributions. Orion has transparent quarterly reporting and is one of my favorite multifamily GPs.