Introducing “The Real Estate Reality Show” from GowerCrowd

Hello GowerCrowders!

I know it’s been a crazy couple of weeks, both in the markets and with all of the new developments here at GowerCrowd. However, I’ve got another exciting announcement- the launch of the Real Estate Reality Show. As I mentioned last week, we’re going to focus on the lingering malaise in the commercial real estate markets, and all of the distressed deals out there-and prospective distressed opportunities.

The Real Estate Reality Show will bring you all of the crowdfunding and commercial real estate you need to know, without polish or varnish- just the facts and my unique perspective derived from decades as an economist and an active participant in the real estate game. You can check out the inaugural episode of The Real Estate Reality Show on GowerCrowd, here.

Without further ado, let’s get into it.

New Crowdfunding Platform Deals

In a very exciting development, AcreTrader is now offering a new opportunistic investment, Tranquility Orchards, which happens to sit within a designated Opportunity Zone. I have not yet covered an AcreTrader OZ project yet, so I was excited to see this pop up on my feed.

AcreTrader is offering an investment opportunity in Tranquillity Orchards, a 169-acre pistachio orchard development in Fresno County, California, within a Qualified Opportunity Zone. Fresno County produces 33% of California’s pistachios, which make up 99% of US production. The demand for pistachios has grown at around 6% per year for the last 10 years, with California supplying around 60% of global consumption. 

The Tranquillity Orchards project will be developed to 155 acres of pistachio trees, with planting expected to be completed in spring 2024, and full production anticipated by 2032. The project is now open for investment, and has a capital raise request of $5,133,000, a price per unit of $1,000 and an estimated ownership duration of 10-15 years. Check it out on AcreTrader, here.

Next up is the Flint Creek and Rosemount Campgrounds at EquityMultiple.

EquityMultiple has announced an investment opportunity in Flint Creek and Rosemount Campgrounds, situated strategically near major states including New York, Pennsylvania, and Washington D.C. This investment offers a position in a first mortgage loan. Amid the pandemic, campgrounds have emerged as a popular leisure travel option, a trend that is expected to persist. 

The opportunity to invest in these campgrounds presents a unique chance to diversify an investment portfolio with a niche asset class that promises stable current returns. The deal is backed by Rosedale Hospitality Partners, a seasoned team with a track record of acquiring, entitling, or developing over 2,000 campground sites across different states, collectively worth over $300M. The Flint Creek and Rosemount Campgrounds deal has a term of 26 months, a loan to cost of 64%, a minimum investment of $15,000, and an 11%net total interest return. Take a look for yourself on Equity Multiple, here.

General Crowdfunding Industry News

In another sign of not so bright news for commercial real estate, the Mortgage Bankers Association (MBA) has reported that its Commercial/Multifamily Mortgage Origination Index has declined by 56% YoY in Q1 2023, and by 42% QoQ. The decline comes after a 54% YoY drop in originations recorded by the index in Q4 2022. 

The MBA origination index is benchmarked at 100 as equal to an average quarter in 2001. The decline is attributed to a confluence of factors on both the supply and demand side of the equation, such as lenders tightening criteria in response to concerns about property fundamentals in some sectors of commercial real estate, troubles among regional banks and a more uncertain economic outlook. Get the rest of the scoop at WealthManagement.com, here.

Crowdfunding Platform Updates

Crowdfunding platform Prodigy, which facilitated investments in properties across New York and Chicago, crashed and burned in 2021 and 2022 after facing multiple lawsuits, bankruptcy, and the death of its founder, Rodrigo Niño. 

The company’s majority stake in a 20-story building in Turtle Bay, initially valued at $125 million, was lost through foreclosure and recently sold for only $13 million. The sale highlights the rapid decline of Prodigy, which was once a pioneer in the US crowdfunding industry. The Real Deal has had consistently great coverage of this crowdfunding fraud odyssey, give their latest entry a read, here.

SEC Filings Graphs

We saw another decline in the total number of Reg D (b) and Reg D (c) deals from Week 17 2023 to Week 18. We only saw 21 deals this week, compared to 30 last week. In addition to the total number of deals dropping, we also saw a pretty significant drop in the total amount raised, dropping from $0.92B to $0.45B. 

California supplanted Texas as the top state by dollars raised, with $0.16B, and in the total number of deals, inching up to 4, compared to 3 in Texas this week and 10 in Texas last week. Access GowerCrowd’s exclusive SEC filing data, here.

Multimedia Links (Videos, Podcasts, etc.)

Finally, I’ve got two new podcasts for your listening pleasure, including a talk with Eric Brody – Founder and Principal, Anax Real Estate Partners and David Saxe – Managing Principal, Calvera Partners. 

Eric’s got a wealth of experience dealing with real estate deals, including handling the occasional lost deal from skyrocketing costs, or lack of bank financing. Eric’s new venture, ANAX, is laser-focused on bringing rescue capital to distressed real estate projects in various stages of completion. 

We discuss his personal story of being at the wrong end of a distressed deal, the lessons he learned, and how it inspired him to set up a rescue capital venture for other developers in a similar situation. Listen to our discussion on GowerCrowd, here.

I also had the distinct pleasure of speaking with David Saxe, Managing Principal at Calvera partners. This episode was the first guest episode of Series 5 of the GowerCrowd.com podcast, The Real Estate Reality Show. In it, David and I discuss how distress is filtering its way into the CRE investing world, the impact of rising interest rates on cap rates and asset values, and how this is all leading to an increased flow of distressed opportunities across all asset classes. 

Download or stream the first ever episode of The Real Estate Reality Show on GowerCrowd, here.

That’s it for now- but I’ll see you soon with even more real estate crowdfunding news, new deals, platform updates, podcasts, and more! Until then!