Fundrise Announces Striking Q3 Results

Welcome to the inaugural November edition of “The GowerCrowd Real Estate Crowdfunding Newsletter.” As fall fades away and we move into the cold winter months we’ve got new deals from CrowdStreet and RealtyMogul, a “remarkable” set of Q3 financial results from crowdfunding platform Fundrise. Without further ado, on to the news!

New Crowdfunding Platform Deals

This week’s list is heavily slanted toward CrowdStreet, with the platform launching a number of new deals, Q&A sessions, and crowdfund projects now open for funding. We’ll take a look at a few of the most promising, as well as an interesting offering from RealtyMogul.

First, we’ll travel to the banks of the Ohio River in Cincinnati, Ohio, to the Homewood Suites by Hilton Newport Cincinnati. This 132-key hospitality property sits within a 25-acre, 1 billion+ mixed-use development, just a short hop and a skip across the river to downtown Cincinnati. The hotel is projected to serve extended-stay business customers from Northern Kentucky and Cincinnati, with demand being largely driven by future development plans for the site including restaurants, retail, and other drivers of traffic. 

The project has a targeted investor IRR of 22%, a targeted equity multiple of 1.8x, a targeted average cash yield of 7% and a 3 year targeted investment period. It will go live for investment on November 5th, the same day as a webinar which will lay out the speciifcs of the project in greater detail. Head over to CrowdStreet to learn more.

Another new deal at CrowdStreet for your review is the Pepperell Mill Campus, an acquisition of 10 buildings of a historical mill campus in Biddeford, Maine, a fast-growing suburb of Portland, ME. The property includes both commercial and residential space, with 100% residential occupancy and 98.4% commercial occupancy. This high occupancy on both the residential and commercial sides will help investors to realize an immediate high cash yield upon acquisition.

This mixed-use, value-add opportunity has a targeted investor IRR of 19.6%, a targeted equity multiple of 1.9x, a targeted average cash yield of 14.4%, and a 4 year targeted investment period. It goes live on November 4, 2021, and you can read more about this New England opportunity, or pledge an investment directly on CrowdStreet, here.

Finally, so as not to give too much airtime to CrowdStreet, we’ll look at another opportunity available at fellow platform RealtyMogul, The Meadows at Canton, sponsored by The GSH Group. 

This project is a 736-unit multifamily community located in Canton, MI, a fast-growing, affluent city in the heart of Wayne County. It sits 10 minutes by car from several business and technical parks along the city’s Haggerty Road, and is also a close drive from numerous dining and shopping options on nearby Ford Road. Canton is particularly well known for its excellent local school system and rapid property growth in past years. The multifamily property has a target IRR of 16.9%, target cash on cash of 11.3%, a target equity multiple of 2.44x, and an estimated hold period of 7 years. The Meadows at Canton is now open for investment- check it out on RealtyMogul, here.

General Crowdfunding Industry News

In business, and in life, it is often best to seek out information from the source. That’s why primary sources are coveted in academic life- and as anyone who has played a childhood game of telephone can tell you- probably a good idea, if only to prevent intentional (or unintentional) mistakes in transcription. This week, we’ve got an excellent primary source for your listening pleasure, with a discussion from Brett Crosby, CCO of PeerStreet, on the Wharton Fintech Podcast.

In the talk, entitled “Building a Two-Sided Marketplace,” Crosby discusses his entrepreneurial past, what he brings to the table, his experience joining PeerStreet after spending a decade at Google, the challenges in building a two-sided marketplace, as well as what lies in store for PeerStreet in the days, weeks, months, and years to come. Head over to take a listen at SoundCloud, here. 

Crowdfunding Platform Updates

In keeping with a general sense of growth in the real estate crowdfunding industry as a whole, Fundrise recently reported some pretty phenomenal Q3 numbers. According to a blog post directly from Fundrise, the firm explains that several of their funds “experienced a level of price appreciation that is uncommon in the world of real estate.” They go on to explain that certain investments held within their real estate portfolio saw “quarter-over-quarter price appreciation at the property level in excess of 50%, with our balanced and growth-focused funds reporting NAV increases over the last quarter ranging from 0.59% to as much as 20.91%.” 

In explaining these outstanding numbers, Fundrise ascribes their success to outsized rent increases caused by a post-pandemic spike in demand, ongoing limitations on housing supply, and accelerated growth within the Sunbelt regions in which they tend to focus their investment efforts. Find out more about how and why Q3 was so stunning for the firm at Fundrise’s blog, here.

That’s it for the first week of November, but we’ll be back next week with all of your favorite crowdfund platform updates, industry news, and of course, new deals. See you then.