Fundrise Secures $770M Boost from J.P. Morgan To Ignite Sun Belt Rental Community Expansion

Alternative asset manager Fundrise received a $770 million credit facility from J.P. Morgan that will be used to fuel the development of about 35 purpose-built rental communities across the Sun Belt.

The developments, which will total about 4,000 build-for-rent (BFR) homes, will be concentrated in Georgia, the Carolinas and Tennessee. The investment marks a substantial expansion for Fundrise, nearly doubling its existing BFR portfolio and positioning it as one of the foremost operators in the burgeoning asset class.

"We are thrilled to be working with a world-class partner like J.P. Morgan to expand our build-for-rent footprint, Fundrise Co-Founder and CEO Ben Miller said. "Build-for-rent communities are the next great asset class in real estate. As one of the leading BFR platforms, not only are we building much-needed housing in high-growth markets, but also our investors will participate in the leading trends of real estate growth."

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The funding commitment from J.P. Morgan comes at a time when mortgage rates are more than 7%, which is driving demand for new rental housing in markets that are growing. Instead of investing in one-off houses, Fundrise builds rental communities with amenities similar to those found in modern apartment buildings — a concept the company calls "horizontal multifamily."

Fundrise has 5,000 units valued at $1.35 billion. Its occupancy rate is 93% and its year-over-year rent growth is 4%.

Build-for-rent communities are single-family rental homes clustered in a professionally managed community with amenities such as swimming pools, tennis courts and dog parks.

Elevated housing prices and high interest rates are contributing to the increased popularity of build-to-rent communities. The National Association of Homebuilders estimates that 69,000 BTR homes started construction in 2022.

Demand is split between Gen Z (55%) and millennials (41%), according to Fixr.com's survey of 52 home construction experts. With no maintenance costs, homeowners association fees or mortgage payments, BFRs have become a more economical alternative to homeownership that still gives young families the space they need to grow.

Fundrise's focus on residential and industrial real estate has propelled its growth as a real estate investor in recent years even as parts of the market have softened. The company has more than $2.8 billion in assets under management and more than 2 million users.

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In the last year, the company has expanded beyond real estate into other private market asset classes, including venture capital and private credit. These expansions are key to the company's strategy of democratizing access to alternative investments and developing a landscape of stable investment opportunities for a new generation of investors.

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