Equity Pledge Debt Fund 840
Type: Debt
Target: $1,300,000
Annual Return: 8.50% - 8.75%
Min-invest Amount: $10,000
Duration: 6 – 18 Months
| Fund Type | Private Equity Fund |
| Offering Amount | $1,300,000 |
| Estimated Return | 8.50 – 8.75% Annualized Return*1 |
| Investment Type | Equity Pledge Loan |
| Unit Price | $10,000 per Subscription Unit |
| Offering Date | October 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. Borrower has 2 extension option, and investors will receive dividend accordingly.
*3 Investors will receive prepaid dividend before every period of 6 months.
- Property is in Long Island City, one of the fastest growing areas in New York. In the past decade, the home price in Long Island City has shown its growth. With convenient public transportation, Long Island City has become an ideal living area for young professionals.
- Developer purchased the lot in March 2023 for $10,000,000, and the existing property is a car repair shop. Developer intends to start demolition in October 2023 and build foundation in December 2023. Construction is expected to finish in the third quarter of 2025. The proposed mixed-use property will feature 39 condo units and 1 commercial unit.
| Address | 43-05 Crescent Street, Long Island City, NY, 11104 |
| Area | Long Island City, Queens, NY |
| Lot Area | 5,370 Sqft |
| Building Area | 39,500 Sqft |
| Intended Use | 39 Condominium Units, 1 Commercial Rental Unit |
| Construction Duration | 24 Months |
| Expected Dividend Calendar | ||||||
|---|---|---|---|---|---|---|
| Round of Dividend | Dividend Date *1 | Counting Date | Ending Date | Dividend Period | Notes | |
| First | No Later than 11/03/2023 | 10/20/2023 | 04/19/2024 | 183 days | Prepaid Dividend *2 | |
| Second | No Later than 5/04/2024 | 04/20/2024 | 10/19/2024 | 183 days | Extension Option Owned by Developer *3< | |
| Third | No Later than 11/03/2024 | 10/20/2024 | 04/19/2025 | 182 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 6 months 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 two extension options, and investors will receive dividends accordingly at the same dividend rate.
- According to the Appraisal Report provided by Newmark in December 2022, the lot was valued at $10,200,000; once construction completes, the property could be worth $36,700,000.
- The loan provided by CrowdFunz Fund 840 is a short-term loan and is collateralized by 100% equity of the project. Developer plans to contribute $9,192,000 of equity and had contributed $4,200,000. The key persons of the developer would also provide unlimited personal guarantee.
- Long island City is an emerging area in New York, and it’s on the other side of East River, directly facing the United Nation headquarter. The surrounding public transportation is well-developed, and there are 7 subway lines and multiple bus lines covered, making residents reach go to Queens, Brooklyn, and Manhattan conveniently.
- Currently, the population density in Long Island City has almost reached the same level of traditional prime areas in Manhattan. The population is young and has steady and growing income, which makes the local commercial and residential developments to be prosperous.
- Borrower will use the loan provided by CrowdFunz Fund 840 to cover preliminary construction costs, including excavation and other soft costs.
- Borrower plans to repay the loan provided by CrowdFunz Fund 840, by refinancing with a commercial bank or by using other sources of fund.
- Developer has over 15 years of experience in real estate development and investment in New York and Mainland China. The development company has completed 5 projects in New York and has 3 ongoing projects.
- CrowdFunz Fund 840 marks the third cooperation between CrowdFunz and Developer. Both parties hope to extend the sound relationship and create potential investment opportunities for our investors.
Investment Structure of CrowdFunz 840 Fund
CAPITAL STACK
| Capital Stack | Ratio | |
|---|---|---|
| Construction Loan From Commercial Bank | $25,000,000 | 70.43% |
| CrowdFunz Fund 840 Equity Pledge Loan | $1,300,000 | 3.66% |
| Developer Equity | $9,192,000 | 25.91% |
| Total | $35,492,000 | 100.00% |
- The project has $25,000,000 of construction loan, which is accounted for 70.43% in the capital stack. Developer had contributed $4,200,000 of equity to acquire the lot and expects to contributed another $4,992,000. The total equity contribution will be accounted for 28.38% in the capital stack.
- The $1,300,000 loan provided by CrowdFunz Fund 840 is accounted for 3.66% in the capital stack.
- Developer had pledged 100% equity of the project entity, and its key persons would provide unlimited personal guarantee to further increase security.
Demographics in the Zip code
| Zip Code 11101 | |
|---|---|
| Regional Population | 31,366 |
| Median Age | 35 |
| High School Education or above | 69.8% |
| Workplace | Metropolitan(99.8%) |
| Family Median Income | $66,579 |
| White Collar/Blue Collar | 90.5%/9.5% |
| Child-Bearing Family | 23.6% |
| Average Family Size | 2.21 |
| Average Housing Price | $975,000 |
Due to its premium geographic location, Long Island City has become one of the hottest areas absorbing new real estate developments in New York. Meanwhile, more companies and residents have chosen Long Island City as the destination for business and living.
Younger population dominants in the area, and most residents are middle class professionals with jobs and stable incomes. The ethnic backgrounds are also well-diversified.
The average age is 35; 23% of the families have children. Self-residence is the main demand for tenants. Due to the low housing inventory available for sale and high needs from buyers, the property prices are constantly going up.
* Data Source: United States Zip Codes. Org. & Esri Zip Code Lookup, American Community Survey, October 2023.
Market Trends of Residential Units Nearby
According to the appraisal provided by Newmark, the condo market in Queens has been gradually recovering post-pandemic. The price of condo units increased by 3.1% YoY in 2022. Historical data shows that the price of newly development condo units was 20% higher than pre-owned units in Queens, New York.
According to the data cited in the appraisal from Reis, in the past 2 years, there were 400 new condo units for sale on the market. In 2023, it will have 1,010 new units finished construction and available on the market. The high home price in Manhattan has made homes in Queens more attractive, which also explains the high net condo absorption in Queens. Strong demand for condos ensures stable growth of the property value in the region.
* Source: Appraisal Report from 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 StreetEasy, the average unit listing price of comparable condo units is: $1,374.57/ ft².
Cost Approach
* Source: Data of cost accounts is provided by Developer; Data compiled by CrowdFunz.
Location
Project is in prime area of Long Island City. The surrounding public transportation is well-developed with 5 subway lines and multiple bus lines. The residents can conveniently reach various destinations in Queens, Brooklyn, and Manhattan. Driving from the project site takes 15 minutes to LaGuardia Airport and 25 minutes to JFK International Airport.
Transportation
- Subway：E/M/R/N/W/7 (3-5 min Walk)
- To EWR Airport：10-minute Subway
- To JFK Airport：25-minute Drive
- To LGA Airport：10-minute Drive
Schools
The basic education system in the area covers many elementary schools, junior high schools, and high schools. There are also many technical schools to meet young professionals’ self-development goals.
Living Facilities
In addition to well-developed public transportation, the local business environment is vigorous. Companies and government agencies has been moved to the area, and new restaurants and supermarkets have been settled.
Entertainment
The surrounding recreation facilities are improving to fit residents’ need. Museums, gyms, and entertainment venues nearby are within walking distance.
Developer Company: FBL Development.
Developer Website: https://www.fbldevelopment.com/
The development company 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 local market, and the team 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 continuously improving the development and cost management of its projects, steadily expanding its local business.
- The loan provided by CrowdFunz Fund 840 is a short-term mezzanine debt helping Borrower fund the initial excavation and other soft costs. Borrower plans to repay the loan by refinancing with a commercial bank or by using other sources of fund.
- Borrower’s established goodwill, the collateralized equity value that is 7 times the loan amount, and the 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 840 has controllable risks and a low probability of default, making the fund a feasible real estate investment opportunity for retail investors.
CrowdFunz 840 Project Rating
Subscription Agreement (Only available to accredited investors)
Appraisal (Only available to accredited investors)