Short-Term Real Estate Loan Offers 12% Target Return
Investing in real estate can be a lucrative opportunity, but it often requires a long-term commitment before seeing significant returns. However, EquityMultiple is offering a unique short-term real estate investment opportunity with a target return of 12%. This opportunity allows investors to participate in a stabilized senior loan with a hold period of less than one year.
The platform is offering participation in a $3.5 million portion of a $14.5 million bridge loan for a property in Holmdel, New Jersey. The sponsor, CHA Partners, plans to develop part of the property into a long-term care facility. The property, formerly the Vonage office building, is being acquired from Veris Residential at a 32% discount to its as-is appraised value of $26.5 million.
Investors in this opportunity will benefit from a 12% interest rate for the nine-month holding period. This offering is exclusively for accredited investors, with a minimum investment of $15,000. CHA Partners is currently awaiting approval from Holmdel Township for the new development, which is expected to take around nine months. Once approval is received, the sponsor will finalize a construction loan, refinance, and pay off the loan.
For investors who are not ready to commit $15,000, EquityMultiple offers the Ascent Income Fund, which targets stable income from senior commercial real estate debt positions. The fund has a historical distribution yield of 12.1% backed by real assets. First-time investors with EquityMultiple can now invest in the Ascent Income Fund with a reduced minimum of just $5,000.
The property in Holmdel is a two-story, 350,000-square-foot commercial office building on 8.8 acres of land. It is located in Monmouth County, approximately 35 miles from New York City, and features amenities such as a conferencing facility, fitness center, full-service cafeteria, courtyard, and 1,500 parking spaces. CHA Partners plans to execute a master lease for 178,000 square feet with CHA, an affiliate organization, bringing the occupancy to 65% on Day One.
After converting part of the existing building into senior living, CHA Partners will develop a larger independent living community on-site with up to 680 beds. The sponsor’s existing long-term senior care license is part of the loan collateral. CHA Partners has a strong track record of development in New Jersey and New York, with experience in office, assisted and independent living, health care, multifamily, and retail spaces.
While the loan’s over-collateralization and attractive terms make it a potentially rewarding investment, there is a level of risk involved due to the dependency on Holmdel Township’s approval. Investors are encouraged to visit the EquityMultiple website for complete terms and information on the Holmdel loan and the Ascent Income Fund.
In conclusion, the short-term real estate loan offering from EquityMultiple presents an exciting opportunity for investors to earn a 12% target return in less than a year. With a reputable sponsor, a strong track record, and attractive terms, this investment opportunity is worth considering for accredited investors looking to diversify their portfolio and potentially earn high returns in a short period.