“Crowdfunding is the future of real estate financing,” commented Fundrise CEO and Co-Founder Ben Miller.
Asserting the partnership as the first-ever crowdfunded commercial construction loan, Jay Maddox of the commercial real estate services company Avison Young brokered a deal with Fundrise which resulted in the real-estate platform’s providing Birtcher Anderson Realty $3.1 million in construction financing for a Starbucks-anchored retail development in Tempe, Arizona, reported Real Estate Weekly.
“A common objection to real estate crowdfunding has been that it wouldn’t be viable for quality assets of any real scale. Our investments in projects like 3 World Trade Center and, today, in Birtcher Anderson Realty’s Starbucks-anchored development proves critics wrong,” commented Ben Miller, co-founder and CEO of Fundrise. “Crowdfunding is the future of real estate financing.”
Birtcher Anderson Realty’s 10,000 square foot retail center in Tempe, Arizona has leases signed with Starbucks, Jersey Mike’s, and Supercuts, amounting to roughly 40% of the total space, according to REW. The property is just east of Phoenix and the University of Phoenix’s main campus is half a mile from the property, while Arizona State University is three miles away.
“Avison Young was able to successfully secure construction financing for this project within a compressed timeframe, helping Birtcher Anderson meet its objectives,” Maddox, a principal with Avison Young told REW. “This is a prime example of creative debt and equity financing alternatives we can offer when bank financing doesn’t meet with a developer’s business objectives.”
Fundrise investors are projected to receive a gross annual return of 11 percent; six percent is projected to be paid current on a quarterly basis during the 24-month term, reported REW.
“We are thrilled to have partnered with the country’s top crowdfunded capital source to secure the construction financing for our new center,” shared Bob Anderson, at Birtcher Anderson Realty. “We chose to work with Fundrise because of their track record of funding projects quickly and efficiently.”
Since its founding, Fundrise has given thousands of individual investors an opportunity to invest in real estate in top markets around the country, including landmark projects including 3 World Trade Center in Manhattan, Palm Springs, Brooklyn and Salt Lake City.
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