As part of our broader strategy to finance the creation of new homes in supply-constrained areas, we’ve invested roughly $28 million in the acquisition of 16 acres in Union City, California, as the future site of Station East, a master-planned, mixed-use community. Union City is located on the eastern side of San Francisco Bay about halfway between Oakland and San Jose.

As major cities continue to suffer from a shortage of reasonably-priced housing, we believe that there is strong and growing demand for suburban communities like Station East, which offer transit-oriented access to downtown while having a more urban, walkable feel, where residents can get groceries or grab a bite to eat without getting in the car.

Business plan

The borrower, Integral Communities, has already made substantial progress on designs and permits for a master-planned community on the property. Plans call for a mix of apartments and for-sale homes, totaling 774 units, with substantial green space and walkable retail options. We expect completing this process on a project of this scale will take roughly two more years. Upon securing the necessary entitlements, they expect to pay back our investment via a sale or refinance.

Our investment in the project is structured as a loan (debt), where we are entitled to earn an annual return of roughly 8.5% over the life of the investment before the borrower can earn a return for themselves.

Why we invested

  • Experienced sponsor: Integral Communities is a California-based real estate firm that specializes in entitling and developing homes throughout the state. The principals of the firm have collectively developed roughly 2,300 multifamily units valued in excess of $1 billion.

  • Attractive margin of safety: The borrower has roughly $15.7 million of equity junior to our loan. They would have to lose their entire investment before our principal was threatened.

  • Walking distance to transit: The property is a half-mile walk from the BART rapid transit system, providing car-free access to Oakland in about 45 minutes and downtown San Francisco inside one hour.

We look forward to providing you with additional updates on this project. As always, please don’t hesitate to reach out to Investments@fundrise.com with any questions or feedback.