UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM 1-U
CURRENT REPORT
Pursuant Regulation A of the Securities Act of 1933
February 7, 2020
(Date of Report (Date of earliest event reported))
FUNDRISE GROWTH eREIT VI, LLC
(Exact name of registrant as specified in its charter)
| Delaware | 84-2001654 |
| (State or other jurisdiction of incorporation) | (IRS Employer Identification No.) |
| 11 Dupont Circle NW, 9th Floor, Washington, DC | 20036 |
| (Address of principal executive offices) | (ZIP Code) |
(202) 584-0550
(Registrant’s telephone number, including area code)
Common Shares
(Title of each class of securities issued pursuant to Regulation A)
| Item 9. | Other Events |
Asset Acquisition
W59 Controlled Subsidiary – Los Angeles, CA
On February 7, 2020, we directly acquired ownership of a “wholly-owned subsidiary”, W59 (the “W59 Controlled Subsidiary”), for an initial purchase price of approximately $15,040,000, which is the initial stated value of our equity interest in the W59 Controlled Subsidiary (the “W59 Investment”). The W59 Controlled Subsidiary used the proceeds to close on the acquisition of three office/industrial buildings totaling approximately 75,000 square feet on an approximately 1.74 acre lot (the “W59 Property”). The closing of both the W59 Investment and the W59 Property occurred concurrently.
The W59 Controlled Subsidiary is managed by us.
Pursuant to the agreements governing the W59 Investment (the “W59 Operative Agreements”), we have full authority for the management of the W59 Controlled Subsidiary, including the W59 Property. In addition, an affiliate of our sponsor earned an acquisition fee of approximately 1.0% of the W59 Investment, paid directly by the W59 Controlled Subsidiary.
The W59 Property was acquired for a purchase price of approximately $15,040,000, which includes the acquisition fee of approximately $150,000. We anticipate incurring the bulk of our costs on tenant improvements and leasing commissions over the next year to re-tenant the W59 Property after the seller moves out. In order to accommodate the sale, we agreed to a short-term, 2-month leaseback with the seller (tenant) at fair market value. Total project level costs are estimated to be approximately $1,070,000 for the project. This brings the total estimated project cost to approximately $16,110,000, including the purchase price. No financing was used for the acquisition of the W59 Property; however, permanent loan financing was assumed during underwriting of the project.
The W59 Property is located in the 90047 zip code of Los Angeles, CA. The specific location consists of a major pocket of larger industrial buildings surrounded by less dense residential neighborhoods. The proximity to transit, downtown Los Angeles, Inglewood, and other large developments will greatly benefit this project.
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 | Total Projected Development Hard Costs | Total Projected Soft / Other Costs | Projected Average Annual Rent | Projected Average Annual Expense Growth | Projected Exit Cap Rate | Projected Hold Period
|
| W59 | 11.8% - 16.3% | $260,000 | $810,000 | $15/SF | 3.0% | 4.5% | 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 Growth eREIT VI, 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.
Safe Harbor Statement
This Current Report on Form 1-U contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including those described under the section entitled “Risk Factors” in our Offering Statement on Form 1-A dated December 6, 2019, filed with the Securities and Exchange Commission (“SEC”), as such factors may be updated from time to time in our periodic filings and prospectus supplements filed with the SEC, which are accessible on the SEC's website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in our filings with the SEC. 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.
SIGNATURES
Pursuant to the requirements of Regulation A, the issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| FUNDRISE GROWTH eREIT VI, LLC | |||
| By: | Fundrise Advisors, LLC | ||
| Its: | Manager | ||
| By: | /s/ Bjorn J. Hall | ||
| Name: | Bjorn J. Hall | ||
| Title: | General Counsel | ||
Date: February 13, 2020
