Equity Pledge Debt Fund 837
Type: Debt
Target: $1,500,000
Annual Return: 8.50% - 8.75%
Min-invest Amount: $10,000
Duration: 6 – 18 Months
| Fund Type | Private Equity Fund |
| Offering Amount | $1,500,000 |
| Estimated Return | 8.50 – 8.75% Annualized Return*1 |
| Investment Type | Equity Pledge Loan |
| Unit Price | $10,000 per Subscription Unit |
| Offering Date | July 2023 |
| Investment Timeline | 6 – 18 Months*2 |
| Dividend Schedule | Prepaid per 6 Months*3 |
*1 8.50% Annualized Return for Investment of 1-19 Units; 8.75% Annualized Return for Investment above 20 Units.
*2 Investors will receive a minimum of 6 months of dividend. After 6 months. Developer has 2 extension options, and investors will receive dividend accordingly.
*3 Investors will receive prepaid dividend before every period of 6 months.
- Project is in Astoria, Queens, adjacent to the fast-developing Long Island City. The values of local realties have been quickly growing for the past decade due to its convenient access to public transit and proximity to Midtown Manhattan.
- Developer acquired the land for $10,300,000 in June 2022 and started construction in January 2023. Demolition of previous building has been completed, and foundation construction is half finished. Construction is expected to complete in the fourth quarter of 2024. The average square footage of the condo units is 667 Sqft.
| Address | 31-16 21st Street, Astoria, NY, 11106 |
| Area | Astoria, Queens, New York |
| Lot Area | 10,281 Sqft |
| Building Area | 53,848 Sqft |
| Intended Use | 54 Condominium Units, 2 Commercial Rental Units, 26 Parking Lots |
| Construction Duration | 20 Months |
| Expected Dividend Calendar | ||||||
|---|---|---|---|---|---|---|
| Round of Dividend | Dividend Date *1 | Counting Date | Ending Date | Dividend Period | Notes | |
| First | No Later than 08/07/2023 | 08/01/2023 | 01/31/2024 | 184 days | Prepaid Dividend *2 | |
| Second | No Later than 02/07/2024 | 02/01/2024 | 07/31/2024 | 182 days | Extension Option Owned by Developer *3< | |
| Third | No Later than 08/07/2024 | 08/01/2024 | 01/31/2025 | 184 days | Extension 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 184 days of dividends. After 6 months, dividends will be calculated in terms of days till Developer repays the loan.
*3 After the first dividend period, Developer owns 2 extension options, and investors will receive dividends accordingly at the same dividend rate.
- According to the Appraisal Report provided by Newmark in January 2023, as of September 2022, the project land is valued at $10,030,000, and underlying project could be valued at $42,000,000 post-completion.
- The loan provided by CrowdFunz Fund 837 is pledged with 100% equity of the project entity. Developer had contributed $10,500,000, which is 7 times the loan amount. In addition, Developer will provide Unlimited Personal Guarantee.
- Astoria has great growth potential due to its proximity to Manhattan and convenient public transit. Driving to LGA and JFK Airport takes 10 minutes and 25 minutes from the project site.
- In recent years, Queens areas along the East River like Long Island City and Astoria have been quickly developed. Local population density and resident family income have been gradually catching up to those in Manhattan. Since the shortage of newly built homes, the apartment developments become investment opportunities.
- Developer will use the loan provided by CrowdFunz Fund 837 to cover initial construction costs, excavation, and other soft costs.
- Developer plans to repay the loan provided by CrowdFunz Fund 837, by refinancing with a commercial bank or by using other sources of fund.
- Developer has over 15 years of experience in real estate industry in New York and has approved experience in development in China. Developer had completed 5 major projects and has 3 on-going projects.
- Developer and CrowdFunz had cooperated in CrowdFunz Fund 830 (Fund Raised) and 834 (Fund Raised). We wish to bring value to both parties, and most importantly, to our investors through our third cooperation.
Investment Structure of CrowdFunz 837 Fund
CAPITAL STACK
| Capital Stack | Ratio | |
|---|---|---|
| Construction Loan from Commercial Bank | $25,000,000.00 | 67.57% |
| CrowdFunz Fund 837 Equity Pledge Loan | $1,500,000.00 | 4.05% |
| Developer Equity Value | $10,500,000.00 | 28.38% |
| Total | $37,000,000 | 100.00% |
- Developer had contributed $10,500,000 of equity to acquire the project lot, which is accounted for 28.38% in the Capital Stack. The $25,000,000 construction loan from commercial bank is accounted for 67.57%.
- The $1,500,000 short-term loan provided by CrowdFunz Fund 837 is accounted for 4.05% in the Capital Stack.
- The loan provided by CrowdFunz Fund 837 is pledged with 100% equity of the project entity. Developer’s key person will provide Unlimited Personal Guarantee.
DEMOGRAPHICS IN THE ZIP CODE
| Zip Code 11106 | |
|---|---|
| Population | 118,959 |
| Median Age | 35.9 |
| High School Degree or Above | 69.69% |
| Commute Area | Metropolitan (99.9%) |
| Average Family Income | $106,441 |
| White / Blue Collar | 88.01%/11.99% |
| Child-bearing Family | 18.68% |
| Average Family Size | 2 |
| Rental | 79.42% |
Known for its prime location and convenient public transit, Astoria has attracted new real estate developments and residents in recent years.
Residents in Astoria are young professionals from diverse background that have stable income and spending power.
Residents are on-average of 35.9 years old; child-bearing family is accounted for 18.68%. Most residents rent their homes due to high buying demands and shortage of residential units.
* Source: Point2homes.com in July 2023
Rental Market Trend in the Area
According to Appraisal Report provided by Newmark, Condo market in Queens has been gradually recovering from Covid-19 Pandemic. In 2022, sale price of newly developed condo units increased by 3.1%. Based on historical trend, new condo units are 20% more expensive than existing condo units.
According to market data from Reis, there were 400 new condo units for sale in Queens from 2021 to 2022, with additional 1,010 units entering the market in 2023. Local condo units have attracted more buyers due to better affordability than Manhattan.
Condo Market Trend in Queens
* Source: Appraisal Report provided by Newmark.
Comparable Condominium Sold
* According to the data from Zillow, the average unit sale price of comparable condo units is: $1,342/ ft².
Comparable Condominium Sold
* According to the data from Zillow, the average unit sale price of comparable condo units is: $1,374.57/ ft² .
Valuation – Cost Approach
* Source: Rent estimation and data provided by Developer.
Location
Project is in prime area of Astoria, Queens. The site is surrounded by well-developed public transportation, including line N and W and several bus lines. Driving to LGA and JFK Airport from the site takes 10 minutes and 25 minutes.
Transportation
- Subway：N, W (10-min walk)
- To Midtown Manhattan: 10-minute Subway
- To JFK Airport：25-minute Drive
- To LGA Airport：10-minute Drive
Schools
Astoria has established education system that includes elementary schools, middle school, and high school, to meet education needs. Adult schools are also available for professionals who are looking for expanding their careers.
Living Facilities
Astoria has sample living facilities like restaurants and supermarkets to support all needs of diverse residents. Most residential units of rental and Co-op.
Entertainment
Local entertainment venues include parks, gyms, and museums that are all within walking distance.
Developer Company: FBL Development.
Developer Website: https://www.fbldevelopment.com
The development team is led by two new Chinese developers in New York. The team has more than 15 years of experience in real estate development in the New York market, and the company has completed 5 properties in Queens, New York, being active on adding market footprints.
In the past 15 years, the development team has formed its own full-cycle development management and has been continuously improving the development and cost management of its projects, expanding its local business steadily.
- The short-term loan provided by CrowdFunz Fund 837 will help Developer fund the initial construction costs. Developer plans to repay the loan by refinancing with a commercial or by using other sources of fund.
- Developer’s established goodwill, the collateralized equity value, which is 7 times the loan amount originated by Fund 837, and Developer key person’s unlimited personal guarantee, support the borrowing.
- CrowdFunz believes that under the loan agreement with clear legal rights and obligations, the short-term debt invested by Fund 837 has controllable risks and a low probability of default, making the fund a feasible real estate investment opportunity for retail investors.
CrowdFunz 837 Project Rating
Subscription Agreement (Only available to accredited investors)
Appraisal (Only available to accredited investors)