Fundrise East Coast eREIT

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Contributor, Benzinga
September 21, 2022

The east coast of the United States has several incredibly strong real estate markets. It’s not uncommon for high-grossing commercial and multifamily buildings in cities like New York City or Washington, D.C. and their surrounding metro areas to sell for seven and eight figures. Those high property values keep most investors locked out of the club. That’s why Fundrise’s East Coast eREIT is such a great way to get involved in this market.

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The Fundrise East Coast eREIT gives investors a mix of the following assets:

  • Value-add multi-family properties 
  • Underperforming assets in need of more efficient management
  • New “ground up” development projects
  • Providing capital for mezzanine funding, senior debt and bridge funding for various commercial assets

As the name suggests, the physical assets in the East Coast eREIT are concentrated in growing east coast real estate markets including New York, New Jersey, the Carolinas and Washington D.C. metro area along with sunbelt markets in Georgia and Florida. All of these markets were hand selected by Fundrise for their combination of population growth, demand for housing and long-term upside in revenue. 

Historical Performance

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The East Coast eREIT is currently in its operational phase, which means it is stabilizing the assets currently in the fund while at the same time looking to acquire new ones. Because of the slower growth model that is typical of its asset acquisition strategy, the debt side of the real estate investment trust (REIT) provided returns for the first full year, which provided 8.4% gains in dividends and 1.2% in appreciation (10.2% total return in the first full calendar year). 

However, as the eREIT assets began to stabilize in the following years, returns were even stronger. See the annual returns below.

  • 2018: 12.2%
  • 2019: 13.6%
  • 2020: 11.2%

In 2021, the value of the assets in the fund appreciated sharply and increased to 21.4% Based on those returns, a $10,000 investment in the eREIT in 2016 would be worth $15,330 today. 

Portfolio

The East Coast eREIT has a diverse mix of 12 assets, highlights of which are included below:

  • Stabilized Commercial Property: Tempe, Arizona-Value Add
  • Stabilized Commercial Property: Atlanta, Georgia-Core Plus
  • Stabilized Commercial Property: Hanover, Maryland-Core Plus
  • Stabilized Commercial Property: Sterling, Virginia-Core Plus
  • Multifamily Apartment Renovation: Jacksonville, Florida-Value Add
  • Stabilized Commercial Property: Greenville, South Carolina-Value Add

Current Stats

The East Coast eREIT’s date of inception was September 2016. The fund is still in its operational phase, and it seeks to provide investors with an ideal combination of fixed returns and asset appreciation. The Current NAV per share is $15.33, and the dividend rate is 33%. This offering is in the “Core” category of Fundrise’s offerings, which means the minimum investment is $5,000. 

Final Thoughts

Since its inception in 2016, the Fundrise East Coast eREIT has accomplished its mission of providing investors a single offering with the best of both worlds when it comes to dividends and appreciation value. It’s an appealing package for any investor looking for a REIT that offers solid returns and a middle-of-the-road approach. As is the case with all investments, risk is involved, and past performance is no guarantee of future results. 

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