In an exciting announcement that could impact commercial real estate investments, New York-based FundRebel is on the verge of acquiring Nine Hollywood, a nearly completed 12-story multifamily project in Hollywood, Florida. The deal, worth $67 million, marks FundRebel’s first foray into the asset ownership arena. FundRebel CEO Mark Drachman confirmed the acquisition in a recent statement, detailing the company’s plans and the lucrative opportunities it opens up for individual investors.
The Nine Hollywood Deal
Located at 1809 Jackson Street, the Nine Hollywood building comprises 204 residential units and an additional 7,000 square feet of ground-floor retail space. Giuseppe Iadisernia, the seller and project developer, had originally purchased the 0.8-acre site for $2 million in 2010. Drachman said the property was particularly attractive because of the area’s demographics and the project’s potential for immediate cash flow upon completion.
FundRebel aims to facilitate the purchase through a real estate investment trust (REIT) fund, for which they are in the process of raising $75 million in capital. The minimum investment into the fund is set at $1,000, allowing accessibility to a broad range of investors.
A New Paradigm in Commercial Real Estate Investment
What sets FundRebel apart is its unique approach, courtesy of Regulation A+. This regulation permits marketing to non-accredited investors, bringing high-quality investments that were previously reserved for the wealthy within reach of the average individual.
“We’ve already had several hundred investors purchase shares before the announcement of this first asset. With this news, we expect significant funds to be raised in the coming months,” said Drachman.
FundRebel’s model distinguishes itself from the likes of Aventura-based Cardone Capital by allowing freely tradable investor shares, thereby offering a new level of liquidity in real estate investments.
Aligned Interests and Investor-Centric Model
CEO Mark Drachman, a seasoned real estate professional with over 20 years of diverse experience, emphasized that FundRebel operates with an aligned interest with its investors. Unlike typical REITs that charge management or advisory fees, FundRebel earns through a 30% management fee, known as a “promote,” tying the company’s profits directly to its investors’ success.
“Our funds are available for only 12 months, after which the assets will be moved into new investments entirely owned by our shareholders. At this point, the shares become freely tradable, giving our shareholders real ownership stakes and the ability to benefit from quarterly distributions, regardless of their investment size,” explained Drachman.
Small to Mid-Size Investors Have More Commercial Real Estate Investment Opportunities
While wealthy individuals and institutional investors have long had access to high-yield, diversified real estate investments, FundRebel aims to level the playing field. Now, thanks to their disruptive investment vehicle, even small to mid-size investors can enjoy the advantages of commercial real estate ownership, complete with enhanced transparency, technological sophistication, and liquidity.