RealtyShares announced on Thursday that an offering involving an office building in Phoenix has been successfully exited. This is considered one of the largest crowdfunded real estate investments in the city’s metropolitan area and has reportedly performed better than expected.
Investors in the transaction are being repaid, after an investment term of only 19 months, 100% of their initial investment along with an annual rate of return equivalent to 17.9%. The property, known as the 7th Gate Center, is a mixed-use building that includes a JP Morgan Chase retail bank branch as well as a diverse mix of professional office tenants including a law firm, appraiser, dental management firm, CPA, radio station, car financing company, and a property management firm.
Nav Athwal, CEO of RealtyShares, stated:
“It’s always great when an investment exceeds expectations. Our investors knew when they bought in that the sponsor of this opportunity, Cole Valley Partners, had spotted an interesting prospect of creating a retail condominium building and of selling the Chase double-net lease for a significant amount. Cole Valley Partners made quick strides in completing some value-add upgrades to the property, following through on the condominium creation process, and retaining prominent brokers to help with marketing efforts for both the bank lease and the overall property. Everything paid off when first the Chase space, and then the remainder of the building, was sold for a price that pleased everyone.”
Zach Bonsall, founding partner of Cole Valley Partners, shared:
“It was a pleasure working with RealtyShares on the funding for this office complex. Through the use of this innovative new platform, we were able to promptly close on the property acquisition, make the needed improvements to the asset, and complete the condo permitting process. In the end they generated good returns for all of our investors. We look forward to working with RealtyShares on other transactions.”
The office complex is a 43,706 square foot building that initially served as the corporate headquarters for Circle K. The building is located at a major intersection enjoying high traffic counts and prominent retailers at each corner, and is also near the I-10, Arizona’s busiest roadway. The office component of the project had already enjoyed healthy occupancy rates, but Cole Valley Partners identified an expansion opportunity with one tenant, improved the property where needed, completed the condo permitting process, and successfully marketed the property to bring the investment to a successful conclusion.
The office component of the project had already enjoyed healthy occupancy rates, but Cole Valley Partners identified an expansion opportunity with one tenant, improved the property where needed, completed the condo permitting process, and successfully marketed the property to bring the investment to a successful conclusion.
“This transaction highlights the attractions of equity real estate investing, which many of our competitors do not offer. Equity investments offer potentially the highest returns for investors, often times with depreciation tax benefits, and where an exit occurs earlier than expected it’s even better. For our investors to receive the full return of their principal and profits in such a short time — a mere 19 months — is certainly a good result.”
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