Separate Return Profiles

Each of the three product lines — multifamily acquisition, development and infill bridge lending — has its own separate return profile, Miller said. For example, marketing materials for the acquisition JV equity product line says the first hurdle internal rate of return is between 8% to 10% and the second hurdle between 14% to 15%. It has a hold period of five to ten years.

RSE has already closed several deals, including three with Insight Property Group that were part of a recently formed partnership between the two firms with plans to invest $200 million in DC-area real estate annually.

RSE has also closed on the $37.6 million acquisition of the Villas at Meadow Springs in Richland, Wash., with another partner, Peak Capital Partners. It has also made a preferred equity investment in the development of the Reserve at Falcon Pointe, a planned 324-unit Class A multifamily project outside of Austin, Texas with Waypoint Residential.

WASHINGTON, DC–Fundrise is spinning off its real estate investment arm RSE Capital Partners into a separate, wholly-owned subsidiary. The end result of the company's spinoff will be twofold: 1] it will create a new source of equity and debt in three separate product lines — multifamily acquisitions and development and infill bridge lending and 2] it will provide an enhanced source of investment returns for Fundrise's five e-REITs.

Because RSE Capital's capital source is the Fundrise platform, the capital it will lend out will be lower cost and more flexible, Fundrise CEO Ben Miller tells GlobeSt.com. He envisions RSE becoming a commercial real estate capital source provider akin to Blackstone and Morgan Stanley.

“We expect that RSE will invest or place $400 million in various transactions over the next 12 to 18 months,” Miller says.

The ten-person RSE team is headquartered in Washington DC, with one employee working remotely from Los Angeles. It will be headed by SVP Latasha Edwards and King Davidson.

Separate Return Profiles

Each of the three product lines — multifamily acquisition, development and infill bridge lending — has its own separate return profile, Miller said. For example, marketing materials for the acquisition JV equity product line says the first hurdle internal rate of return is between 8% to 10% and the second hurdle between 14% to 15%. It has a hold period of five to ten years.

RSE has already closed several deals, including three with Insight Property Group that were part of a recently formed partnership between the two firms with plans to invest $200 million in DC-area real estate annually.

RSE has also closed on the $37.6 million acquisition of the Villas at Meadow Springs in Richland, Wash., with another partner, Peak Capital Partners. It has also made a preferred equity investment in the development of the Reserve at Falcon Pointe, a planned 324-unit Class A multifamily project outside of Austin, Texas with Waypoint Residential.