0001144204-17-047806.txt : 20170913 0001144204-17-047806.hdr.sgml : 20170913 20170913111511 ACCESSION NUMBER: 0001144204-17-047806 CONFORMED SUBMISSION TYPE: 1-U PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20170911 ITEM INFORMATION: Other Events FILED AS OF DATE: 20170913 DATE AS OF CHANGE: 20170913 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FUNDRISE REAL ESTATE INVESTMENT TRUST, LLC CENTRAL INDEX KEY: 0001645583 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 320467957 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 1-U SEC ACT: 1933 Act SEC FILE NUMBER: 24R-00005 FILM NUMBER: 171082557 BUSINESS ADDRESS: STREET 1: 1519 CONNECTICUT AVENUE NW STREET 2: STE 200 CITY: WASHINGTON STATE: DC ZIP: 20036 BUSINESS PHONE: 2025840550 MAIL ADDRESS: STREET 1: 1519 CONNECTICUT AVENUE NW STREET 2: STE 200 CITY: WASHINGTON STATE: DC ZIP: 20036 1-U 1 v475111_1-u.htm FORM 1-U

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________

FORM 1-U

CURRENT REPORT

Pursuant Regulation A of the Securities Act of 1933

September 11, 2017

(Date of Report (Date of earliest event reported))

FUNDRISE REAL ESTATE INVESTMENT TRUST, LLC

(Exact name of registrant as specified in its charter)

Delaware	32-0467957
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

1601 Connecticut Ave., Suite 300, Washington, DC	20009
(Address of principal executive offices)	(ZIP Code)

(202) 584-0550

(Registrant’s telephone number, including area code)

Common Shares

(Title of each class of securities issued pursuant to Regulation A)

Item 9.

Other Events

Asset Acquisition

Acquisition of Controlled Subsidiary Investment – Brandywine Passthrough LLC

On September 11, 2017, we directly acquired ownership of a “majority-owned subsidiary”, Brandywine Passthrough LLC (the “RSE AJH Controlled Subsidiary”), for an initial purchase price of $4,000,000, which is the initial stated value of our equity interest in the RSE AJH Controlled Subsidiary (the “RSE AJH Investment”). The RSE AJH Controlled Subsidiary used the proceeds to close on the acquisition of a single stabilized multifamily property totaling 301 units located at 400 & 402 Foulk Road, Wilmington, DE 19803 (the “Brandywine Hundred Apartments”). The closing of both the RSE AJH Investment and the Brandywine Hundred Apartments property occurred concurrently.

The RSE AJH Controlled Subsidiary is managed by AJH Management (“AJH”), a company formed in 2013. Since its founding, AJH has successfully acquired and currently manages more than 3,000 units, with a value in excess of $300 million.

Pursuant to the agreements governing the RSE AJH Investment (the “RSE AJH Operative Agreements”), our consent is required for all major decisions regarding the RSE AJH Controlled Subsidiary. In addition, Fundrise Lending, LLC (“Lending”), an affiliate of our sponsor, earned an origination fee of approximately 1.5% of the RSE AJH Investment, paid directly by the RSE AJH Controlled Subsidiary.

The Brandywine Hundred Apartments property, which is held through Brandywine 100 Holdings LLC, a wholly-owned subsidiary of the RSE AJH Controlled Subsidiary, was acquired for a purchase price of approximately $52,400,000. AJH anticipates additional hard costs of approximately $400,000 to perform common area and unit improvements, as well as additional soft costs and financing costs of approximately $1,575,720, bringing the total projected project cost for the Brandywine Hundred Apartments property to approximately $54,375,720. To finance the acquisition of the Brandywine Hundred Apartments property, a $42,355,000 senior secured loan with a ten (10) year initial term at a LIBOR + 266 floating interest rate with three years interest only was provided by Greystone – Freddie Mac (the “Brandywine Hundred Senior Loan”). The remaining equity contributions to the RSE AJH Controlled Subsidiary are being contributed by various individuals.

As of the closing date, the Brandywine Hundred Senior Loan had an approximate LTC ratio of 77.9%. The LTC ratio, or the loan-to-cost ratio, is the approximate amount of the total debt on the asset, divided by the anticipated cost to complete the project. We generally use LTC as a measure of leverage for properties that are subject to construction. There can be no assurance that the anticipated completion cost will be achieved or that the LTC ratio will not vary at points over the course of ownership.

The Brandywine Hundred Apartment property is a 301-unit, four- and six-story mid-rise apartment property in Wilmington, DE. The property was constructed in 1965 and 1971 with renovations completed in 2008. The build is of well-maintained steel/concrete construction and a split-faced concrete block exterior.

The Wilmington market presents a strong opportunity arising from a steady financial employment base and solid multifamily market fundamentals. Wilmington’s economy has mirrored that of the United States economy and is expected to continue to do so moving forward. The state’s pro-business environment should keep financial institutions in the market as the city continues to attract other business sectors to Wilmington.

Safe Harbor Statement

This Current Report on Form 1-U contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including those described under the section entitled “Risk Factors” in our Offering Statement on Form 1-A dated May 11, 2017, filed with the Securities and Exchange Commission (“SEC”), as such factors may be updated from time to time in our periodic filings and prospectus supplements filed with the SEC, which are accessible on the SEC’s website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in our filings with the SEC. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

SIGNATURES

Pursuant to the requirements of Regulation A, the issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	FUNDRISE REAL ESTATE INVESTMENT
	TRUST, LLC

	By:	Fundrise Advisors, LLC
	Its:	Manager

	By:	/s/ Bjorn J. Hall
	Name:	Bjorn J. Hall
	Title:	General Counsel

Date: September 13, 2017