The West Coast real estate market is as famous for its property values as it is for the high rents that both residential and commercial assets there can net investors.
This is especially true in Los Angeles, San Diego and San Francisco, but Seattle and Portland, Oregon, have incredibly strong markets as well. But the strength of the West Coast market can also make buying real estate assets there very expensive.
Fundrise’s West Coast eREIT seeks to solve that problem by offering investors equity in various commercial real estate assets in select West Coast markets. This private REIT looks to take advantage of the high revenue capability of West Coast commercial real estate through a strong focus on fixed-income properties and value-add equity investments. West Coast eREIT assets are primarily multifamily and commercial properties
This is a testimonial in partnership with Fundrise. We earn a commission from partner links on Benzinga.com. All opinions are our own.
West Coast eREIT Strategy
The West Coast eREIT has a simple, four-pronged strategy:
- Acquiring undervalued or underperforming assets with upside
- Acquiring value-add and lease-up properties
- New building and ground-up development projects
- Providing capital for upgrades to existing assets and mezzanine debt
Historical Performance
The West Coast eREIT went online in the last quarter of 2016. Since then, the annual total returns are as follows:
- 2017: 6.1%
- 2018: 9.1%
- 2019: 7.4%
- 2020: 4.4%
- 2021: 6.6%
Because many of the assets in the West Coast eREIT are fixed income, the annual revenues have remained consistent throughout the investment life. However, 2020 and 2021 have seen slower appreciation because of factors such as inflation and the West Coast’s ongoing recovery from the COVID-19 crisis. The current net asset value (NAV) is $10.33 per share, but the current dividend is 3.39%.
Portfolio
The 12 assets in the West Coast eREIT were all carefully selected for their ability to provide solid revenue and long-term appreciation. That’s why the fund has such a heavy focus on multifamily and redeveloped commercial assets. Both the multifamily and the commercial assets provide investors with an ideal combination of fixed revenue and long-term upside. Examples of the assets in the real estate investment trust (REIT) include:
- Two multifamily developments in Phoenix, fixed income
- Commercial property under renovation in Los Angeles, opportunistic
- Stabilized commercial property in Los Angeles, value add
- New multifamily development in Los Angeles, fixed income
- New mixed-use development in San Diego, fixed income
Current Stats
Since it launched in September 2016, 72% of West Coast eREIT’s assets are part of a fixed-income strategy. Fundrise has designated the West Coast eREIT as a core investment, with a minimum investment amount of $5,000. Tax reporting will be done through a standard 1099-Div.
Final Thoughts
It would take an experienced investor a lot of time to scout out assets with the revenue and appreciation potential of the West Coast eREIT portfolio, to say nothing of the acquisition cost. Considering both of those facts, the West Coast eREIT provides a strong option for any investor who wants to build a diversified portfolio in the Western United States.
