In August 2018, online investment
platform Fundrise (a Real Estate Investment Trust) provided a $3.1
million loan for the acquisition of a 26,500 square foot (0.6
acre) property in the Eagle Rock neighborhood of Los Angeles,
Calif. While the property is currently improved with two office
buildings and a parking lot, the borrower acquired the site with
plans to redevelop the land into a new housing subdivision.
On Friday, Fundrise reported that the
borrower has successfully secured entitlements from the City of Los
Angeles to subdivide the property into 17 smaller lots, upon each of
which a new home can now be built. The now-entitled property is
valued at approximately $4.2 million, based on a third-party
appraisal, which is roughly 34 percent higher than the original $3.1
million purchase.
“The next step is to secure the
building permits necessary to break ground,” Fundrise said in an
update to investors. “At that point, the borrower plans to either
refinance into a construction loan or sell the property to a home
builder to pay back our investment.”
Fundrise, based in Washington, D.C.,
has been labeled as the first company to successfully crowdfund investment into the real estate
market.
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