US Residential Fund - Crowd Funding and Placement Update

US Residential Fund - Crowd Funding and Placement Update

US Residential Fund (ASX: USR) has announced that the Patriot’s Pointe multifamily asset in North Carolina, acquired in May 2016, will be listed for syndication on two property Crowdfunding sites, Crowdstreet and GlobalCrowd, over the coming weeks. In addition, GlobalCrowd has agreed to subscribe for $1m of stapled securities in the current placement at $0.60 per stapled security.


HIGHLIGHTS

  • Patriot’s Pointe to be syndicated on leading US Crowdfunding platform CrowdStreet
  • Asset to also be listed on GlobalCrowd funding platform
  • GlobalCrowd to subscribe for $1 million in USR stapled securities

US Residential Fund (ASX: USR) (“USR”, “the Fund”) is pleased to announce that the Patriot’s Pointe multifamily asset in North Carolina acquired in May 2016 will be listed for syndication on two property Crowdfunding sites over the coming weeks.

Leading US Crowdfunding platform CrowdStreet, which has posted over US$1.7 billion in commercial real estate transactions on its public Marketplace since its debut in 2014, and GlobalCrowd, which will officially launch in August, will list the Patriot’s Pointe multifamily offering on their respective platforms.

CrowdStreet is headquartered in Portland, Oregon and owns and operates a network of more than 9,000 mostly US-based investors that are registered members. Many of the transactions offered through its marketplace have been similar in size and nature to the Patriot’s Pointe syndication.

GlobalCrowd is a newly formed online platform sponsored by Melbourne-based Greenfield Capital Pty Ltd. The platform will bring together several investor groups from around the globe and is expected to have an initial reach of approximately 10,000 potential investors.

GlobalCrowd’s objective is to assist non-US investors in gaining access to US real estate syndication opportunities with a particular focus on multifamily assets.

It is envisaged that as USR acquires additional US multifamily assets, they too will be offered for syndication through the CrowdStreet and GlobalCrowd platforms.

CrowdStreet co-founder and Vice President Business Development Darren Powderly said: “We are excited about forming an ongoing alliance with USR and GlobalCrowd and we look forward to presenting the Patriot’s Pointe opportunity to our investor members as the first of many to follow.”

USR Managing Director Andrew Meakin said: “Crowdfunding is experiencing the fastest growth in the real estate sector and we are pleased to have formed a relationship with CrowdStreet, one of the early movers in the space.

“Through CrowdStreet and GlobalCrowd, USR will be able to reach both US and non-US investors with its multifamily syndication offerings at a time when demand for both yield and hard assets is growing.

“This business model should see USR’s income increase significantly as a result of fees related to the sourcing and management of multifamily investments, supplementing the rental income generated from its portfolio. It is envisaged that the cost of using the crowd funding platforms for syndication will be less than 1% of funds raised.”

Growth in Crowd Funding for Real Estate

Massolution, a research and advisory firm estimates that the global market for investments in property through this route was $2.5 billion in 2015 and is conservatively expected to touch $3.5 billion in 2016.

Growth in investment in US multifamily properties from non-US investors

In 2015 investment into US multifamily properties by non-US investors grew by 188% to US$16.4 billion. A significant proportion of this investment was by large institutional investors as it requires a relatively large balance sheet to purchase a property like Patriot’s Pointe.

Through online syndication and co-investment, USR is aiming to make the US multifamily asset class more accessible to investors wanting to invest between US$50,000 and US$2 million.

Commitment for more than 1.6 million stapled securities

GlobalCrowd has agreed to subscribe for $1 million of USR securities in the current placement on the same terms as the one-for-one rights issue currently underway. Both the placement and the rights issue have been priced at $0.60 per stapled security.

For more information about CrowdStreet: www.CrowdStreet.com

To view the full announcement click here. 

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