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Debt & Equity

Avison Young arranges first crowdfunded commercial construction loan

Fundrise, the country’s first platform for online real estate investment, announced that it has provided Birtcher Anderson Realty $3.1 million in construction financing for a Starbucks-anchored retail development in Tempe, Arizona.

Jay Maddox of commercial real estate services company, Avison Young, arranged the transaction, which is quite possibly the first-ever crowdfunded commercial construction loan.

“A common objection to real estate crowdfunding has been that it wouldn’t be viable for quality assets of any real scale. Our investments in projects like 3 World Trade Center and, today, in Birtcher Anderson Realty’s Starbucks-anchored development proves critics wrong,” said Ben Miller, co-founder and CEO of Fundrise. “Crowdfunding is the future of real estate financing.”

Birtcher Anderson Realty’s 10,000 square foot retail center in Tempe, Arizona has leases signed with Starbucks, Jersey Mike’s, and Supercuts, amounting to roughly 40% of the total space.

The property is just east of Phoenix and the University of Phoenix’s main campus is half a mile from the property, while Arizona State University is three miles away.

Fundrise investors are projected to receive a gross annual return of 11 percent; six percent is projected to be paid current on a quarterly basis during the 24-month term.

“We are thrilled to have partnered with the country’s top crowdfunded capital source to secure the construction financing for our new center,” stated Bob Anderson, at Birtcher Anderson Realty.

“We chose to work with Fundrise because of their track record of funding projects quickly and efficiently.”

“Avison Young was able to successfully secure construction financing for this project within a compressed timeframe, helping Birtcher Anderson meet its objectives,” said Maddox, a principal with Avison Young.

“This is a prime example of creative debt and equity financing alternatives we can offer when bank financing doesn’t meet with a developer’s business objectives.”

Birtcher Anderson Realty has developed over 100 million square feet of commercial property nationally, focusing on the western United States. Additionally, the company has managed over 22 million square feet of commercial property for both their own investment and for various private and public investment entities over the past 40 years, in the United States and in Asia.

Since its founding, Fundrise has given thousands of individual investors an opportunity to invest in real estate in top markets around the country, including landmark projects such as 3 World Trade Center in Manhattan.

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