In November 2020, we invested roughly $19.3 million to provide financing in the form of a senior bridge loan to Integral Communities, a high-quality repeat borrower. Integral Communities used the proceeds to acquire approximately 11 acres of land in Union City, California, as the future site of 351 new homes. This investment was part of the Station East, a master-planned, mixed-use community, in which we first invested back in September 2019.
In late 2023, the borrower requested a 24-month extension of the existing loan to cover project costs associated with securing all the necessary entitlements, architecture and construction plans, and preparation of the site for sale as a shovel-ready project. As per the terms outlined in the extension loan agreement, the borrower has agreed to an increase of 4.25% in the interest rate. Consequently, the new fixed annual interest rate will be 12.75%, which will be paid on a monthly basis throughout the loan's maturity.
Investor FAQ: How does an individual project impact your portfolio?
This investment is structured as debt, where the project’s sponsor must pay us a fixed rate of return before they can earn a return for themselves, and their equity provides us with a cushion against losses. Throughout the term of the investment, the regular income it generates contributes to net asset value (NAV) increases for the Fundrise Real Estate Income Fund.
As always, if you have any questions or feedback, please visit our help center or reach out to us at investments@fundrise.com.
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Additional Information: An investor in the Fundrise Income Real Estate Fund (the “Fund”) should consider the investment objectives, risks, and charges and expenses of the Fund carefully before investing. The Fund’s prospectus contains this and other information about the Fund and may be obtained here. Investors should read the prospectus carefully before investing.
