0001144204-19-018486.txt : 20190405 0001144204-19-018486.hdr.sgml : 20190405 20190405172650 ACCESSION NUMBER: 0001144204-19-018486 CONFORMED SUBMISSION TYPE: 1-U PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20190401 ITEM INFORMATION: Other Events FILED AS OF DATE: 20190405 DATE AS OF CHANGE: 20190405 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Fundrise Growth eREIT III, LLC CENTRAL INDEX KEY: 0001758744 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 832162909 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 1-U SEC ACT: 1933 Act SEC FILE NUMBER: 24R-00194 FILM NUMBER: 19735992 BUSINESS ADDRESS: STREET 1: 1601 CONNECTICUT AVE STREET 2: STE 300 CITY: WASHINGTON STATE: DC ZIP: 20009 BUSINESS PHONE: 2025840550 MAIL ADDRESS: STREET 1: 1601 CONNECTICUT AVE STREET 2: STE 300 CITY: WASHINGTON STATE: DC ZIP: 20009 1-U 1 tv518332_1u.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

April 1, 2019

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

FUNDRISE GROWTH EREIT III, LLC

(Exact name of registrant as specified in its charter)

Delaware	83-2162909
(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 – NP 84, LLC

On April 1, 2019, we directly acquired ownership of a “majority-owned subsidiary”, NP 84, LLC (“NP 84”) for a purchase price of $5,747,500, which is the initial stated value of our equity interest in the NP 84 Controlled Subsidiary (the “NP 84 Growth eREIT III Investment”). Inclusive of the NP 84 Growth eREIT III Investment, NP 84 was capitalized with $45,980,000 in equity contributions from us and other eREITs managed by our manager. NP 84 used this capital to acquire from Fundrise Lending, LLC, a wholly-owned subsidiary of our sponsor (“Fundrise Lending”), a first mortgage bridge loan with a maximum principal balance of $45,980,000 (the “RSE- MOTG Senior Loan”). The borrower, WP MOTG-TXMF Owner, LLC, a Delaware limited liability company (“MOTG”), used the loan proceeds to acquire Mansfield on the Green, a single garden-style multifamily property totaling 308 units located at 250 N State Hwy 360, Mansfield, TX 76063 (the “RSE- MOTG Property”).

Pursuant to the agreements governing the NP 84 Growth eREIT III Investment (the “NP 84 Investment Operative Agreements”), our consent is required for all major decisions regarding the RSE- MOTG Senior Loan.

MOTG is managed by Waypoint Residential (“Waypoint”). Waypoint Residential is a vertically integrated real estate investment firm focused on the U.S. residential sector. Since 2011, Waypoint has invested over $2 billion across more than 20,000 multifamily and student housing units located in the South, Southeast, and Midwest markets. Waypoint is comprised of more than 60 professionals in six offices, with senior management averaging over 25 years of real estate investment and management experience throughout the U.S.

The RSE- MOTG Senior Loan bears an interest rate of 8.5% per annum, with an amount equal to 5.25% per annum paid current on a monthly basis through the maturity date, April 1, 2020 (the “RSE- MOTG Senior Loan Maturity Date”). Interest will be paid interest-only over the term of the loan. In addition, an affiliate of our Manager earned an origination fee of approximately 0.70% of the RSE- MOTG Senior Loan amount. As a member of NP 84, we are entitled to receive a proportionate share of interest income from the RSE- MOTG Senior Loan.

MOTG does not have the option to extend the maturity date beyond April 1, 2020. Waypoint has provided customary non-recourse carve-out guarantees.

The combined LTV ratio, or loan-to-value ratio, is the amount of the RSE- MOTG Senior Loan divided by the purchase price of the RSE- MOTG Property. As of the closing date of the RSE- MOTG Senior Loan, the RSE-MOTG Property featured an LTV of 95.0% based on purchase price. We generally use LTV to define leverage for properties that are generating cash flow.

The RSE- MOTG Property features 24 three-story apartment buildings that were built in two phases, totaling 308 total units. As of the acquisition date, the RSE- MOTG Property was approximately 91% occupied. Amenities at the property include covered parking in attached garages and carports, a clubhouse, a club/game room, a business center, a community kitchen with a coffee bar, fitness center, an outdoor pool, and an outdoor lounge with a fireplace and a television. The units feature stainless steel appliances, double-basin stainless steel sinks, and granite countertops.

The Property is located in suburban Mansfield, southern anchor of the Texas 360 corridor. The corridor was expanded to reduce commute times for local residents working in major employment hubs, equidistant to both Fort Worth and Dallas. The Texas 360 Toll road was expanded last year to alleviate the commute. Mansfield is a desirable residential community that has experienced exceptional population growth with average household incomes exceeding $155,000 and average home values over $300,000. The Mansfield Independent School District (MISD), which includes some of the best schools in the MSA. Mansfield Lake Ridge High School ranks 7/10 and all proximate middle / elementary schools rank 9/10-10/10 (greatschools.org). Being located in the MISD makes the property more desirable among tenants. Aside from attractive school districts to draw in tenants, major employer like Mouser Electronics and Methodist Mansfield Medical Center keeps submarket well occupied. Google recently purchased a 375-acre tract of land on which it intends to build a $500 million data center.

As the RSE- MOTG Senior Loan was purchased from Fundrise Lending, an affiliate of our Manager, the Independent Representative, reviewed and approved of the transaction prior to its consummation.

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 December 21, 2018, 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 GROWTH EREIT III, LLC

	By:	Fundrise Advisors, LLC
	Its:	Manager

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

Date:

April 5, 2019