1.Fund Name iStar Residential

2 Investment Dates: 10/2022

3 Asset Class Portfolio Breakdown: Class A multifamily development

4 Projected Holding Period:  10 years

5 Communication Methods: The sponsor utilized a comprehensive approach, including: Quarterly Reports

6. Effectiveness of Communication – ★★★★☆ (4 Stars)
Reports were clear and informative, particularly the balance sheets. However, there were instances of over-communication, where updates included excessive detail that didn't enhance decision-making.

7. Tax Reporting – ★★★★☆ (4 Stars)
K-1s were delivered punctually

8. Investment Plan Execution – ★★★★☆ (4 Stars)
Although the business plan encountered early delays, the Sponsor demonstrated the ability to navigate challenges effectively, including accruing preferred returns for investors during the period of inactivity.

9. Holding Period Execution – ★★★☆☆ (3 Stars)
The holding period was extended significantly, though the sponsor provided valid reasons for the delay. The extension was handled transparently but still impacted the overall experience. Cash on cash returns delayed. The impact on full returns remains to be seen. 

10. Return on Investment – Unrated

The investment is still active and can not be rated yet. The delay in construction caused a delay in lease up and subsequent cash returns. This will affect the overall performance. 

11. Commentary

iStar Residential, the project sponsor, is an established real estate investment and development firm with decades of experience and a national footprint. As a division of iStar Inc. (formerly NYSE: STAR), the sponsor brings institutional-level resources and a proven track record in mixed-use and multifamily development, particularly in coastal and urban markets. The leadership team has overseen billions in real estate transactions, and the firm is well known for its role in revitalizing waterfront communities—most notably through its long-term, large-scale redevelopment efforts in Asbury Park. Their expertise spans land entitlement, ground-up construction, and public-private partnerships, making them a strong sponsor for projects with complex financial and regulatory structures.

 iStar Residential – Recent Projects Overview

Asbury Ocean Club (Asbury Park, NJ – Completed 2019):
16-story luxury tower featuring condominiums, a boutique hotel, and ground-floor retail.

Salvation Army Hotel Redevelopment (Asbury Park, NJ – In Planning as of 2023):
Adaptive reuse of historic building into a 110-room boutique hotel with rooftop amenities.

Esperanza Site Tower (Asbury Park, NJ – Proposed 2024):
Planned 16-story mixed-use tower with luxury condos, retail, and structured parking.

Coney Island Tower (Brooklyn, NY – Filed 2022):
23-story, 282-unit residential tower with commercial and community-use space.

The offering materials projected strong returns, including:

Targeted Investor IRR 34.3% Targeted Equity Multiple 4.1x

Targeted Average Cash Yield 9% Targeted Investment Period  10 Years

Deal Summary – Surfhouse at Asbury Park
Surfhouse is a 226-unit, Class A multifamily development located on the waterfront in Asbury Park, NJ. The project is positioned within a Qualified Opportunity Zone and benefits from a 30-year PILOT tax abatement. Developed by iStar Residential, the deal combines high-end coastal living with institutional sponsorship and a strong location. The project aimed to capitalize on Asbury Park’s ongoing redevelopment and strong demand from lifestyle renters.

This investment was made in October 2022, at a time when rent growth in the New Jersey coastal market was trending above historical averages. The property is located in a Qualified Opportunity Zone, and the business plan includes a 10-year hold to fully realize the associated tax benefits. The Sponsor plans to refinance after stabilization and hold the asset until approximately 2032, at which point a sale of the leasehold interest is anticipated.

While financing conditions proved challenging, the construction loan did not close until May 2024—about a year later than expected. Despite this delay, construction remains on schedule and on budget, with completion projected by year-end 2025.

The approximately one-year delay was inconvenient, but given the long-term nature of the Opportunity Zone structure and the accrual of returns, the impact was mitigated. Whether the Sponsor can execute a successful refinance by mid-2026 remains to be seen. However, their ability to overcome initial setbacks suggests strong operational competence. If construction timelines and budgets continue to hold, this project remains positioned for long-term success. The final return on investment is still to be determined.