{"id":14645,"date":"2023-05-27T12:33:12","date_gmt":"2023-05-27T16:33:12","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/we-have-been-turning-away-deals-says-fundrise-ceo-of-new-500-million-fund-lending-to-cash-strapped-landlords\/"},"modified":"2023-05-27T12:33:13","modified_gmt":"2023-05-27T16:33:13","slug":"we-have-been-turning-away-deals-says-fundrise-ceo-of-new-500-million-fund-lending-to-cash-strapped-landlords","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=14645","title":{"rendered":"\u2018We have been turning away deals,\u2019 says Fundrise CEO of new $500 million fund lending to cash-strapped landlords"},"content":{"rendered":"
\n

Cash-strapped landlords with maturing property debt aren\u2019t being scared off by 12%-16% rates of interest, said Ben Miller, CEO of Fundrise, which recently launched a new $500 million credit fund to make property loans to borrowers in need of liquidity.<\/p>\n

\u201cWe have been turning away deals. We have too many deals,\u201d Miller told MarketWatch on Friday. \u201cThe problem is too any deals and not enough dollars in the world today. The team has been trying to prioritize what we think are deals with the lowest risk.\u201d<\/p>\n

\n

Fundrise\u2019s newly launched Opportunistic Credit Fund, or \u201cOFC\u201d for short, was seeded by the company\u2019s roster of nearly two million small-time investors, Miller said, where investments can be as little as $10. <\/p>\n

Its aim is to give clients a shot at profiting off commercial real estate in a down cycle, in ways typically reserved for banks, private-equity funds or other alternative lenders. <\/p>\n

Specifically, it makes \u201cbridge\u201d or \u201cmezzanine\u201d loans on residential buildings, either finishing construction or stabilized, where borrowers need more funding in the year since the Federal Reserve started sharply increasing interest rates.<\/p>\n

Related<\/strong>: Commercial real-estate\u2019s debt machine is broken down<\/p>\n

Green Street Advisor\u2019s May Commercial Property Price Index shows prices fell 15% from a year ago. While the shortage of homes is expected to keep demand high for rentals, it\u2019s unclear if rents can stay as elevated as they have been, or when property prices will bottom.<\/p>\n

Fundrise is making average loans of $10 million to $30 million to commercial landlords, according to Miller. The fund targets the gap borrowers need to fill as property values drop from peak pandemic levels and as rates on senior commercial mortgage loans have climbed from lows of roughly 3.5%. <\/p>\n

\u201cWe had 15 years of ZIRP,\u201d Miller said, of the Fed\u2019s nearly zero-interest-rate policy in recent years. \u201cWhen there\u2019s too much money and liquidity, the opposite is too little liquidity,\u201d he said.<\/p>\n

Miller pointed to stress evident among small-time syndicators in multifamily properties, as highlighted by The Wall Street Journal, as an example of fallout already hitting real estate as credit conditions tighten. \u201cThey are the first to get foreclosed on because they are less capitalized,\u201d he said. \u201cBut institutions have the exact same problem.\u201d<\/p>\n

He expects the new fund to be fully deployed in the next 24 months.<\/p>\n

Fundrise, which has about $3 billion in assets under management, got off the ground about 10 years ago as a way for individuals to more easily invest in real estate, private equity and pre-IPO stocks, often now through smartphones.<\/p>\n

While redemptions at funds have picked up across the board since the Fed tightened financial conditions, Miller says they haven\u2019t been problematic at Fundrise. \u201cWe were seeing more redemptions that we did before, but still more fundraising,\u201d he said.<\/p>\n

Read<\/strong>: Debt on trophy office buildings is starting to buckle as loans come due<\/p>\n

Stocks closed higher Friday on progress in Washington around a U.S. debt-ceiling deal. The Dow Jones Industrial Average
\n DJIA,
\n +1.00%<\/bg-quote>
\n rose 1% Friday, but gave up 1% for the week, while the S&P 500 index
\n SPX,
\n +1.30%<\/bg-quote>
\n gained 0.3% and since Monday and the Nasdaq Composite Index
\n COMP,
\n +2.19%<\/bg-quote>
\n rose 2.5% for the week, according to FactSet.<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Cash-strapped landlords with maturing property debt aren\u2019t being scared off by 12%-16% rates of interest, said Ben Miller, CEO of Fundrise, which recently launched a new $500 million credit fund to make property loans to borrowers in need of liquidity. \u201cWe have been turning away deals. We have too many deals,\u201d Miller told MarketWatch on […]<\/p>\n","protected":false},"author":1,"featured_media":14646,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-14645","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\n\u2018We have been turning away deals,\u2019 says Fundrise CEO of new $500 million fund lending to cash-strapped landlords | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Cash-strapped landlords with maturing property debt aren\u2019t being scared off by 12%-16% rates of interest, said Ben Miller, CEO of Fundrise, which recently\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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