Summerfield Fund Closed & Market Insights

Celebrating the Successful Closing of the Summerfield Fund

We are thrilled to announce the successful closing of the Summerfield Fund! This marks another milestone for Missional Capital Group as we continue to expand our portfolio with high-quality, stable assets that align with our investment philosophy. The Summerfield property in Florence, AL, has already proven to be a strong performer with high occupancy, solid rent growth, and an engaged resident base.

Our commitment to long-term, stable investments with a focus on investor impact remains at the core of our strategy. We want to extend our gratitude to our investors and partners who made this acquisition possible. Your trust and continued engagement allow us to identify and acquire assets that provide strong returns while making a positive impact on the communities we invest in.

Interest Rates & the State of CRE Investments

As we step further into 2025, commercial real estate continues to grapple with elevated interest rates, affecting both borrowing costs and investor sentiment. The Federal Reserve’s stance on monetary policy remains cautious, with many market participants closely watching inflation and employment trends. While rate cuts may be on the horizon, the cost of capital remains a significant factor influencing transaction volumes and pricing.

For multifamily investors, this higher-rate environment has led to a widening bid/ask spread—sellers hold onto pricing expectations from previous cycles, while buyers demand discounts to account for increased debt service costs. The result? Fewer deals closing and a greater emphasis on creative financing solutions, assumable debt, and strategic partnerships. Despite these challenges, well-capitalized investors continue to find opportunities in select markets—Florence, AL, being a prime example.

Why We Invest in Florence, AL

The Florence/Muscle Shoals market has emerged as a highly attractive location for multifamily investment. According to the latest Florence Market Report 2024, here are a few key reasons why we are bullish on this region:

✅ Population & Job Growth: Florence has seen consistent population growth, fueled by its affordability, strong employment base, and proximity to major Sunbelt cities like Nashville, Birmingham, and Huntsville. Job creation is being driven by expansions in aerospace, manufacturing, and technology industries.

✅ Tight Rental Market: With a vacancy rate of just 3.7% and annual rent growth of 4.6%, Florence’s multifamily sector is outperforming national averages. Limited new development means continued upward pressure on rents, benefiting current property owners.

✅ Economic Development: Recent announcements, such as AE Industrial Partners' investment in a high-tech aerospace hub and Muscle Shoals' planned $65 million sports and entertainment complex, highlight the area’s momentum. These projects will attract jobs, residents, and future investment capital.

✅ Improved Transaction Activity: While the second half of 2024 saw a slowdown in deal volume due to pricing mismatches, we anticipate an increase in transactions in 2025 as bid/ask spreads compress. Florence remains an attractive market for investors looking for yield and long-term appreciation.

As we celebrate the Summerfield Fund’s success, we remain committed to identifying high-quality investments in growing secondary markets like Florence. Our focus remains on stabilized assets, long-term value creation, and making a tangible impact on the communities we invest in.

Thank you for being part of our journey. If you have any questions or want to explore future opportunities, don’t hesitate to reach out!

Best,

The Missional Capital Group Team

www.missional.group