Filed Pursuant to Rule 253(g)(2)
File No. 024-11105
FUNDRISE EREIT XIV, LLC
SUPPLEMENT NO. 2 DATED JANUARY 14, 2021
TO THE OFFERING CIRCULAR DATED DECEMBER 30, 2020
This document supplements, and should be read in conjunction with, the offering circular of Fundrise eREIT XIV, LLC (the “Company”, “we”, “our” or “us”), dated December 30, 2020 and filed by us with the Securities and Exchange Commission (the “Commission”) on December 31, 2020 (the “Offering Circular”). Unless otherwise defined in this supplement, capitalized terms used in this supplement shall have the same meanings as set forth in the Offering Circular.
The purpose of this supplement is to disclose:
· | Asset acquisition. |
Asset Acquisition
Acquisition of Controlled Subsidiary Investment – FR-MP Brandon Glen JV LLC
On January 8, 2021, we directly acquired ownership of a “majority-owned subsidiary”, FR-MP Brandon Glen JV LLC (the “Brandon Glen Controlled Subsidiary”), for an initial purchase price of approximately $7,872,000, which is the initial stated value of our equity interest in the Brandon Glen Controlled Subsidiary. We anticipate funding an additional $535,000 through future capital calls, bringing our total investment in the Brandon Glen Controlled Subsidiary to approximately $8,407,000 (the “Brandon Glen Investment”). The Brandon Glen Controlled Subsidiary used the proceeds to close on the acquisition of a single stabilized garden-style multifamily property totaling 180 units located at 1500 Brandon Glen Way Northeast, Conyers, GA 30012 (the “Brandon Glen Property”). The closing of the initial Brandon Glen Investment and the Brandon Glen Property occurred concurrently.
The Brandon Glen Controlled Subsidiary is managed by McDowell Properties (“McDowell”), which currently operates approximately 10,000 units across the United States. Since its inception in 2004, McDowell has purchased over 40,000 units valued at over $3.0 billion.
Pursuant to the agreements governing the Brandon Glen Investment (the “Brandon Glen Operative Agreements”), our consent is required for all major decisions regarding the Brandon Glen Controlled Subsidiary. In addition, an affiliate of our sponsor earned an origination fee of approximately 2.0% of the Brandon Glen Investment, paid directly by the Brandon Glen Controlled Subsidiary.
The Brandon Glen Property was acquired for a purchase price of approximately $23,500,000. McDowell anticipates additional hard costs of approximately $3,514,000 to perform common area and unit improvements, as well as additional soft costs and financing costs of approximately $1,195,000, bringing the total projected project cost for the Brandon Glen Property to approximately $28,209,000. The renovations are expected to be complete within 36 months. Floating rate bridge senior financing was provided by Wells Fargo Bank (the “Brandon Glen Senior Loan”). The Brandon Glen Senior Loan totals $17,700,000 with a rate equal to 1 Mo LIBOR + 225bps on an initial 3-year interest only term with two 1-year extension options. The remaining equity contributions to the Brandon Glen Controlled Subsidiary are being contributed 80% by us and 20% by McDowell and its affiliates.
The Brandon Glen Property is a 180-unit garden-style apartment property in Conyers, GA, and was approximately 94% occupied at the time of our investment. The property was constructed in 1995, and the build is of wood frame.
The Conyers market, which is 30 minutes Southeast of downtown Atlanta, presents a sound investment opportunity arising from strong rent growth, lack of new supply and stable population growth.
The following table contains performance assumptions and projections. Individual assumptions and projected returns are presented at the asset level. All of the values in the table below are projections and assumptions that we believe to be reasonable; however, there can be no guarantee that such results will be achieved.
Asset Name | Projected Returns | Projected Renovation Hard Cost per Unit | Projected Average Increase to Monthly Rent from Renovation | Projected Stabilized Economic Vacancy | Projected Average Annual Rent Growth | Projected Average Annual Other Income Growth | Projected Average Annual Expense Growth | Projected Hold Period | ||||||||||||||||||||||
Conyers, GA Apartments - Brandon Glen (to be renamed “Flats at 1500”) - FR-MP Brandon Glen JV LLC | 9.1% - 12.9% | $ | 19,522 | $ | 245 | 6.5 | % | 2.50 | % | 2.50 | % | 2.75 | % | 10 years |
Please note that past performance is not indicative of future results, and these asset performance projections may not reflect actual future performance. Any projections on the future returns of any of our assets may not prove to be accurate and are highly dependent on the assumptions described above. Investing in Fundrise eREIT XIV, LLC is an inherently risky investment that may result in total or partial loss of investment to investors.
We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.