The Fundrise rating is an alphanumeric rating ranging from A1 to E3 that provides investors with the ability to easily compare real estate assets across the Fundrise platform. The Fundrise rating estimates the relative risk–adjusted return of an individual real estate asset. For example, a C3 rating would connote more estimated risk than a B1 rating. Therefore, an investor would expect to receive a greater return on a C3–rated project than a B1–rated project as a consequence of the project’s relatively greater risk. It does not imply that one asset is inherently better, worse, or more suitable for an individual investor.
An asset’s Fundrise rating corresponds to its numerical score in its Project Analysis. The Project Analysis is a quantitative method of measuring eight key risk criteria of a real estate investment. Each of the eight criteria is assessed and scored a corresponding number of points, resulting in a total numerical score ranging from 6 to 20. A Project Analysis score of 6 – 8 will result in an A1 – A3 rating, 9 – 11 in a B1 – B3 rating, and so on:
|Capital Senior to Fundrise||Notes||Points|
|Capital Junior to Fundrise||Notes||Points|
|40% or more||—||1|
|Primary||Core urban area in a top 10 United States MSA||1|
|Secondary||Suburban or secondary urban market||2|
|Tertiary||Rural or emerging real estate market||3|
|Occupied||90%+ leased with stable cash-flow||1|
|Leasing||Partially vacant with some cash-flow||2|
|Vacant||No leases in place and zero cash flow||3|
|Stabilized||Management of an existing asset with no major improvements required||1|
|Value-Add||Existing asset with rehab or redevelopment work required||2|
|Ground-Up||Raw land with entitlements and/or new construction required||3|
|Sponsor’s Track Record||Notes||Points|
|$250 million or more developed||—||1|
|$50-249 million developed||—||2|
|Less than $50 million developed||—||3|
|Yes||The sponsor’s personal assets are collateral for the investment||-1|
|No||No personal guaranty in place||0|
|Secured by the Property||Notes||Points|
|Yes||The property is collateral for the investment||-1|
|No||No property guaranty in place||0|
The Fundrise rating is NOT a measure of the quality or suitability of the investment and is NOT meant to serve as a replacement for individual due diligence. Importantly, the Fundrise rating system is NOT similar or comparable to ratings from agencies such as Standard and Poor’s or Moody’s, and is merely an estimate of the risk–adjusted return of each individual real estate asset.
The Fundrise due diligence process is rigorous. At Fundrise, we pride ourselves on providing investment opportunities in high–quality commercial real estate projects with experienced sponsors.
Fundrise ratings are for informational purposes only. Each rating is impersonal and not individualized for any specific investor’s financial situation and is not investment advice. These ratings are not intended to be, nor should you interpret them to be, a prediction of how a particular investment will actually perform. Each investor should always carefully consider investments in any security and be comfortable with his/her understanding of the investment. An investor may also consider consulting investment professionals.