Online REIT to be Offered By Real Estate Crowdfunding Platform Fundrise

There was some big news in the crowdfunded real estate world when it was announced that Fundrise planned to raise $50,000,000 for a REIT. Below are some thoughts on the offering.

Katie Roof (@Katie_Roof) writes in TechCrunch...
Fundrise, the real estate crowdfunding site, is offering up to $50 million in shares to the public, for the launch of its online real estate investment trust...This REIT will be used to invest in a diverse portfolio of commercial real estate properties including offices, apartments and shopping centers. The idea is that it will generate cash flow and will be paid out to investors in regular dividends.

Chris  Feery writes in Bisnow National...
Small investors will have another opportunity to invest in large real estate investments as Fundrise has announced plans for a new public offering with a goal of raising $50M. The DC-based real estate crowdfunding firm has filed regulatory paperwork for a new offering that it expects to qualify as a REIT.

Jeff Clabaugh in Washington Biz Journals...
Fundrise says the minimum investment for its stock offering will be 100 shares, or $1,000. It will offer shares until it reaches its $50 million goal, it said in a regulatory filing...The shares will not be listed on a stock exchange or other trading market, the regulatory filing says. Fundrise will use proceeds from its offering for real estate loans and investments.

Erika Morphy writes in, A Deeper Look at Fundrise's Proposed e-REIT
Namely, investing in commercial buildings, even income-producing ones as appears to be Fundrise's strategy, is not a slam-dunk. Prices are high and there has been a growing suspicion that valuations in recent years have become too inflated. The competition for solid assets is quite fierce and can cause impatient funds to overpay. There are other risks to the offering but then there are risks to any investment. Again, Fundrise spells out these risks very clearly in the filing -- and in the case of the investment's relative lack of liquidity, turns it into a selling point. This is fine and well -- it is, one could say, the basis of the free market. But its approach to market does require that the investor knows himself or herself very, very well.