RealtyMogul.com, a leading online marketplace for commercial real estate investing, has launched the company’s second real estate investment trust or “REIT,” labeled MogulREIT II. The newest REIT was revealed in an SEC filing earlier this year. The first MogulREIT was launched in August of 2016.
MogulREIT II aims to invest in multifamily apartments across the United States that have demonstrated consistently high occupancy and income levels across market cycles. MogulREIT II also plans to invest in multifamily properties that offer value add opportunities with appropriate risk-adjusted returns and potential for appreciation objectives.
The company points to data from the US Census Bureau’s Housing and Vacancy Homeownership Report that indicates the U.S. apartment market has experienced a strong recovery in recent years.
RealtyMogul.com says that MogulREIT II is able to operate with lower fees than some of the other REIT offerings available in the market since it is able to connect with investors through RealtyMogul’s platform, thereby avoiding paying broker dealers selling commissions, which may average 7-8% of invested dollars.
Jilliene Helman, CEO of RealtyMogul, told Crowdfund Insider;
“We’re already seeing a very strong response from our investors for MogulREIT II and are certainly open to launching new MogulREITs in the future. Our goal at RealtyMogul is to provide investment opportunities for all types of investors, whether they’re looking for potential stable income, aggressive growth, or exclusive private placement deals, and if there is interest for another MogulREIT, we’ll happily explore it.”
Helman said that multifamily continues to be a great sector for investment, as people of all ages are choosing to rent rather than buy a home.
“The massive millennial generation is the largest share of the American workforce and highly values rentals, which satisfy their desire to maintain a flexible lifestyle. We’re even seeing an emerging demand among baby boomers, who are moving back into city centers from their home in the suburbs.”
MogulREIT II says its “rigorous zero-based underwriting process”, which analyzes each potential deal from scratch through is a key component for success of the REITs. RealtyMogul says it spends over $1 million annually for the use of third-party data and technology to vet each deal. The process means that fewer than 1% of the requests reviewed by RealtyMogul pass its underwriting standards.
“The response to MogulREIT I overwhelmingly reinforced our view that retail investors are looking for a better way to invest in real estate,” said Hrach Simonian, General Partner at Canaan. “Multifamily is one of the most requested products by our customers and we have tailored this fund to that category.”