The Fundrise Growth eREIT II is a privately traded real estate investment trust (REIT) offering with a different approach than that of its contemporaries. While most REITs concentrate on institutional investments in growing urban centers, the eREIT II looks for value-add opportunities on smaller to medium-sized properties. The reason for this approach is surprisingly simple.
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Sometimes the best place to fish is where the other fishermen aren’t looking. By focusing on small to medium-sized assets in the multifamily and commercial sectors, the eREIT II faces less competition from well-heeled funds with capital to spend. By doing this, eREIT II can find value-add real estate investments that cost less than the larger properties desired by institutional funds.
Although the size of these assets may not be huge, there is still enough upside in them that they can deliver impressive investor returns when combined into a single fund. The eREIT II has a national focus. Instead of concentrating on a specific geographic market, it looks for investments with upsides in growing urban markets and submarkets all over the country.
Fundrise eREIT II’s Historical Performance Data
A $10,000 Investment in this Growth REIT 4 Years ago Would be Worth Almost $15,000 Today
The eREIT’s strategy of spreading its assets over a wide area helps diversify the fund's holdings and protect investors from any particular market cooling off or going south. Historically, this strategy has yielded impressive results for investors and the eREIT looks like it will continue the trend. There are nine total assets in the fund, with seven in the value-add strategy and the remaining two in an opportunistic strategy.
The eREIT was established in August 2018 with a net asset value (NAV) of $10. It has since progressed into its operating stage, where it currently remains. For most of 2019 and the first quarter of 2020, the assets in the fund were stabilizing until beginning to make gradual progress upwards, and the eREIT II finished the year at $10.52.
2021 saw the eREIT II’s assets grow substantially, and it delivered a whopping 34.6% return before closing out the year with a NAV of $13.68. That growth trend has continued so far in 2022, and the NAV has increased to $14.70. That means the eREIT II has delivered an average annual return of nearly 12%, which is impressive by any stretch of the imagination.
Current Stats
Relevant stats on the Fundrise Growth eREIT II:
Inception date: August 2018
Phase: Operating
Objective: Value-add and opportunistic
Geographic focus: National
Current NAV per share: $14.70
Current dividend: 3.06%
Tax Reporting: 1099-DIV
Final Thoughts
Since its inception, the Fundrise Growth eREIT II has consistently delivered investor returns and asset appreciation. As the assets in the fund continue to stabilize, there is a good chance the returns will continue flowing in. This value-add opportunity is certainly worthy of consideration. As always, there is risk of loss, and past performance is no guarantee of future results. But the Fundrise Growth eREIT II looks well-positioned for continued returns.
