Equity Pledge Debt Fund 835

Type: Debt

Target: $3,500,000

Annual Return: 8.50% - 8.75%

Min-invest Amount: $10,000

Duration: 6 – 18 Months

  • Total:
Project Funded
Fund Type Private Equity Fund
Offering Amount $3,500,000
Estimated Return 8.5 – 8.75% Annualized Return*1
Investment Type Equity Pledge Loan
Unit Price $10,000 per Subscription Unit
Offering Date June 2023
Investment Timeline 6 – 18 Months*2
Dividend Schedule Prepaid per 6 Months*3

*1 8.5% Annualized Return for Investment of 1-19 Units; % Annualized Return for Investment above 20 Units.

*2 Investors will receive a minimum of 12 months of dividend. After 12 months, dividends will be calculated in terms of days, till principal is repaid.

*3 Investors will receive prepaid dividend before every period of 6 months.

  • Property is in Kips Bay, Manhattan, a quiet yet bustling neighborhood. Area has well-developed public transit and infrastructures and has multiple top-tier hospitals and medical facilities. Residents have education and medical backgrounds and earn above-average income. Paired with limited housing supply, the area is deemed one of the most underrated communities and full of growth potential.
  • Developer purchased the lot for $14,800,000 in August 2021. Demolition of previous 3-floor building was finished, and developer plans to build a 12-floor apartment building with 59 Condo units. Foundation, excavation, and construction are expected to begin in Q2 2023, and the project is proposed to be completed in January 2025.
Property Address 112-15 Northern Boulevard, Queens, NY 11368
Site Area Corona, Queens, New York
Lot Area 20,909 Sqft
Building Area 128,389 Sqft
Intended Use 173 Hotel Units, Conference Center, Indoor Parking Structure, and 2 Retail Units.
Expected Dividend Calendar
Round of DividendDividend Date *1Counting DateEnding DateDividend PeriodNotes
FirstNo Later than
7/6/2023		6/22/202312/21/2023183 daysPrepaid Dividend *2
SecondNo Later than
1/5/2024		12/22/20236/21/2024183 daysExtension Option Owned by Developer *3<
ThirdNo Later than
7/6/2024		6/22/202412/21/2024183 daysExtension Option Owned by Developer

*1 In case of holidays and non-working days, the dividend date will be automatically postponed to the next working day.
*2 Investors will receive at least 183 days of dividends. After 6 months, dividends will be calculated in terms of days till Developer repays the loan.
*3 After the second dividend period, Developer owns two extension options, and investors will receive dividends accordingly at the same dividend rate.

  • According to Appraisal Report provided by LWHA, the hotel is valued at $51,500,000.
  • The loan provided by CrowdFunz Fund 835 is pledged with 100% equity of the operating hotel, which is valued at $20,700,000 as of now. In addition, Developer will provide Unlimited Personal Guarantee, which is estimated to be 30 times the loan amount.
  • Collateralized hotel is in core area of Corona and is minutes away from LGA Airport.
  • Hotel is next to Citi Field of New York Mets and is one of the first choices for flight crews and sports fans.
  • Hotel had signed long-term contract with New York City to lower vacancy rate.
  • Developer will use the loan provided by CrowdFunz Fund 835 to cover construction costs of a newly purchased project in Rego Park.
  • CrowdFunz chose an operating and profitable hotel of Developer as collateral to mitigate investment risk.
  • Developer expects to apply new loans or to use other sources of income to repay the loan provided by CrowdFunz Fund 835.
  • Developer is one of the most well-known Chinese developers in New York, with 2 decades of experience in real estate development. Successful projects spread across Queens, including hotels, mixed-use, and multi-family properties.
  • Developer and CrowdFunz had cooperated in CrowdFunz Fund 806, 808, and 816. Two parties look forward to extending strong alliance with CrowdFunz Fund 835.

Investment Structure of CrowdFunz 835 Fund

CAPITAL STACK

Capital StackRatio
Mortgage from Commercial Bank $30,800,000 59.8%
CrowdFunz Fund 835 Equity Pledge Loan $3,500,000 6.8%
Developer Equity Value $20,700,000 40.2%
Total $51,500,000 100.00%
  • Loan provided by CrowdFunz Fund 835 is collateralized by SpringHill Suites by Marriot LGA Airport. The hotel has signed long-term contract with city government and has stable cash flows.
  • According to Appraisal Report, underlying hotel is valued at $51,500,000, with $30,800,000 of remaining mortgage balance.
  • After deducting mortgage, Developer equity value is around $20,700,000, more than 6 times the loan amount provided by CrowdFunz Fund 835.
  • Developer will provide unlimited Personal Guarantee to ensure timely repayments and mitigate investment risks.

Demographic in Zip Code Area

Zip Code 11368
Population109,931
Median Age31
College Degree or Above64%
Racial Makeup Asian(10)%/Caucasian(32)%/African American(6.8%)
Average Family Income$62.254
Child-bearing Family49%
Average Family Size3.9

Corona has been one of the fastest growing communities in the past 10 years, for its convenient transportation and proximity to LGA Airport and sport stadiums, in New York.

Residents are from diverse background, and most are Caucasian.

Residents are on-average 31 years old, and most families have stable incomes. Child-bearing family is accounted for around 49%.

Due to proximity to Flushing, floods of Asian residents had migrated to Corona in recent years, in turn driving up property prices and draining inventory.

* Source: United States Zip Codes. Org. & Wikipedia, as of June 2023。

New York Hotel Market Trend

According to CBRE Report in 2022, hotels in New York had a strong recovery after the pandemic. CBRE expects the occupancy rate will recover to 77.2% and 82% in 2023 and 2024. In 2022, the average daily rate increased by 29.7%.

According to Crain’s New York Business Report, during the pandemic, total value of hotel properties in New York decreased from $32.7B to $26.3B. According to an analysis by The Real Deal, small-to-mid sized hotels are operated well as tourism recovers, but large-scale hotels are still facing challenges.

Demand and Tourists Traffic Forecast of New York City Hotels

* Source： NYS Comptroller, The Tourism Industry in New York City Reigniting the Return。

Comparable Hotel Room Price Analysis

* As of June 2023, the average sale price of a hotel unit is: $274,000 / Room.

Comparable Sales Approach

  • Based on comparable sale price, the target hotel is valued at $51,500,000.
  • Hotel earns an annual operating income of $4,280,000, and pairing with a comparable Cap Rate of 6.5% would yield a property value of $65,000,000.

    • * Source: Third party Appraisal Report, compiled and calculated by CrowdFunz.

    Location

    Hotel is 5 minutes away from 7 Train stations, and 20-min subway away from Midtown Manhattan; driving to LGA Airport takes 5 minutes.

    Transportation

    • Subway：7 Train
    • To Midtown Manhattan: 20-minute Train
    • To JFK Airport：5-minute Drive
    • To LGA Airport：18-minute Drive

    Nearby Schools

    Hotel is in central area of Corona, which has copious options of elementary schools, middle schools, and high schools, to meet education needs.

    Living Facilities

    Corona is adjacent to Chinese communities in Flushing, which offers comprehensive restaurant, supermarkets, and businesses to meet daily needs.

    Entertainment

    Local family-friendly entertainment venues include art and science museums, and US Open Tennis stadiums.

    Developer Company: United Construction & Development Group.

    Developer Website: https://unitedgroupny.com/

    Prior Cooperation: CrowdFunz Fund 806 / CrowdFunz Fund 808 /CrowdFunz Fund 816

    United Construction & Development Group was founded in early 1990. Under the leadership of Mr. Chris Xu, the company has had over 20 years of experience in development and earned reputation among the industry.

    Company manages over 2 million squarefeet of retail, residential, industrial, and commercial properties. The Skyline Tower in LIC is one of Developer’s most well-known projects.

    Given Developer’s reputable track record, expertise, and creditworthiness, CrowdFunz believes that the new cooperation would create value for all parties.

    • The loan provided by CrowdFunz Fund 835 is a short-to-mid term loan. CrowdFunz chose an already operating property of Developer’s as collateral to mitigate investment risks. Developer will apply for new loans with commercial bank or use other incomes to repay the loan provided by CrowdFunz Fund 835.
    • The loan provided by CrowdFunz Fund 835 has an LTV of under 70%. Collateralized hotel has stable and profitable operations without concerns of construction and other risks.
    • Collateralized hotel has stable occupancy rate and profitability. Sitting in central area of Corona, the hotel is in proximity of LGA Airport and Citi Field, making it popular among travelers and sports fans. The hotel had signed long-term contract with city government to secure its profitability.

    CrowdFunz 835 Project Rating

     PPM (Only available to accredited investors)

     Subscription Agreement (Only available to accredited investors)
     Operating Agreement (Only available to accredited investors)

     Appraisal (Only available to accredited investors)