NEW YORK, July 14, 2020 /PRNewswire/ — EquityMultiple, a New York-based real estate investment startup that provides accredited investors with streamlined access to high-quality commercial real estate investments, today announced a series of growth milestones achieved during the challenging environment resulting from the COVID-19 outbreak.
In April, EquityMultiple raised a round of equity capital from existing company investors for product expansion, technology enhancement, and operations. The company previously raised two rounds of capital and has taken no venture capital to date – opting instead for strategic partners within the finance and real estate industries. The firm plans to conduct a larger fundraise later this year from outside investors to take advantage of the opportunities created by market dislocation.
EquityMultiple also closed on its largest single-asset investment: a mezzanine debt investment into a 155-unit Class A multifamily development in West Harlem, Manhattan – a project with a $184.5M total capitalization.
- EquityMultiple rapidly raised capital to enable the sponsor to refinance existing debt and avoid additional expenses.
- EquityMultiple provided meaningful additional value working with the sponsor to obtain an essential work designation, allowing the project an early restart to construction and minimizing downtime during the NYC-wide COVID shutdown.
- The flexible mezzanine debt structure enabled the borrower to minimize cost of capital through a number of “closings” allowing for an initial retirement of prior debt and subsequent capitalization of reserves.
- Similar to all of its offerings, EquityMultiple’s in-house underwriting and structuring provided its investor network an attractive risk-adjusted return and payment priority at a low minimum investment of $20k.
In June, EquityMultiple surpassed $150M in total originations since inception. This meaningful milestone speaks to the continued market-wide acceptance of technology-based real estate investment platforms.
EquityMultiple continues to introduce a new investment approach to facilitate further diversification for investors: private real estate Funds. The company is selectively incorporating a number of prominent national real estate managers in sourcing new Fund investment opportunities. Funds inherently offer multi-asset exposure along with geographic and property type diversification. EquityMultiple is particularly interested in high-quality fund sponsorship, focusing on strategies that support both macro and microeconomic opportunities. Funds provide a strong complementary product to EquityMultiple’s investors and a scalable new vertical for the company, particularly in a distressed or recessionary environment.
Remarked CEO Charles Clinton, “There continues to be a paradigm shift in investing, and greater access to private investments…EquityMultiple’s goal remains to provide an optimized real estate investing platform for self-directed accredited investors. During this market disruption, we also aim to offer distressed, opportunistic, and under-valued investment opportunities.”
The pandemic created an opportunity for firms like EquityMultiple as many quarantined investors moved online. The company’s nationwide network of accredited investors continued to expand during Q2 as investors sought out high-quality investments in CRE. Separately, the firm reports that 53% of its investors plan on allocating more to private-market alternative assets in the coming year, a substantial increase from pre-COVID-19 survey results.
View original content to download multimedia:http://www.prnewswire.com/news-releases/equitymultiple-continues-path-of-sustained-growth-amid-market-disruption-301093313.html