This morning Fundrise announced a Regulation A+ deal that has not yet been seen in the real estate crowdfunding industry. What’s unique about the new offering is that by using Regulation A+ it is also open to retail investors, something that only one other real estate crowdfunding company has focused on. This deal however will operate much differently in that investors purchase shares in the investment vehicle similar to that of a REIT.
There are, however, some differences. The Fundrise eREIT is currently open for 48 hours exclusively to investors who joined their waitlist, which according to an email totaled 15,000. I expect that this will fill up rather quickly, but the total amount they can raise is limited to $50 million. It isn’t clear how much they plan to raise at this time as they intend to take a ‘just in time’ approach to investing in these real estate deals to cut down on idle cash. The Fundrise Real Estate Investment Trust will invest in a diverse portfolio of commercial real estate properties including apartments, shopping centers and office buildings. They also will use leverage in the real estate investments. Investors will be paid back from the cash flow of the investments via dividends. [Read more…]