The Pyatt Broadmark Real Estate Lending Fund (PBRELF I) recently raised $3 million on RealCrowd in less than 120 days. Their fund, which focuses on Washington, Oregon, and Idaho real estate, offers high-yield, short term loans to accredited investors. PBRELF I is currently managing $90 million in assets, and is run by Broadmark Capital, a Seattle-based merchant bank. RealCrowd believes that this the largest debt fund capital raise by a commercial real estate crowdfunding platform, which may reopen to investors later this year. Adam Fountain, Managing Director at Broadmark Capital, says that:
“The RealCrowd platform is a winner. We’ve had such a positive experience raising capital on the platform that we’ve opened a second fund to investors on RealCrowd. RealCrowd enables us to expose our offerings to more people, automate the administrative tasks associated with raising capital, and facilitate and improve investor relations. RealCrowd is the future of investment real estate syndication.”
RealCrowd also announced on January 9 that Broadmark Capital is opening a second fund on the platform. This loan fund, The Broadmark Real Estate Lending Fund II (BRELF II), focuses real estate in the Denver area. BRELF II already has $5 million in assets under management after just 8 months of operation, offering high yield loans that minimize risk to investors. The minimum investment for this raise is $25,000. Investors in these two loan funds, “historically have received an 11-12% annualized net return with monthly distributions,” according to Broadmark Capital.
Broadmark Capital was founded in 1987. They provide accredited investors with direct investment opportunities, while also offering financing and management services to growing companies. Their website states, “[W]e believe every high-net-worth investor should have a portion of their portfolio committed to the higher risk investments of the future.” Like other companies who have embraced real estate crowdfunding, Broadmark Capital saw that there was a hole in funding from banks for smaller commercial businesses and seeks to make it easier for developers and builders to find investments.
It is these goals and beliefs that make Broadmark Capital and RealCrowd’s partnership such a fitting one. RealCrowd is among the largest real estate crowdfunding platforms, “with more properties available in its marketplace and a track record of raising more capital for higher-value properties.” Their company is based in Palo Alto, California. RealCrowd’s main function is connecting commercial real estate operators with accredited investors in a way that saves time and money compared to traditional funding. RealCrowd’s platform also enables investors to manage their investment portfolios.
Real estate crowdfunding has been growing at a steady pace since now that more experienced investors have started to see the new industry’s potential, many even partnering up with the platforms themselves. Many of these platforms operate a little bit differently from one another. Still, real estate crowdfunding is becoming more and more common. An article by Forbes summarizes five projects that raised $50 million or more in 2014. More growth is expected in 2015, especially with foreign investments in US property on the rise.
