Filed Pursuant to Rule 253(g)(2)
File No. 024-11163
FUNDRISE BALANCED EREIT II, LLC
SUPPLEMENT NO. 20 DATED MARCH 15, 2022
TO THE OFFERING CIRCULAR DATED AUGUST 23, 2021
This document supplements, and should be read in conjunction with, the offering circular of Fundrise Balanced eREIT II, LLC (“we”, “our” or “us”), dated August 23, 2021, as previously supplemented, and filed by us with the Securities and Exchange Commission (the “Commission”) (collectively, 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:
| · | Credit agreement. |
Asset Acquisition
Credit Agreement
On March 9, 2022, Fundrise MF Facility 1 Borrower, LLC (the “Borrower LLC”) and certain of its co-investment subsidiaries (collectively, the “Borrowers”) obtained the initial draw with respect to a revolving credit facility (the “Revolving Credit Facility”) pursuant to a Credit Agreement (the “Credit Agreement”) the Borrowers entered into with Regions Bank, as agent for the lenders (the “Agent”), and the lenders from time to time party thereto. Borrower LLC is an indirect subsidiary of a joint venture (the “MF JV”) between Fundrise Balanced eREIT II, LLC and Fundrise Real Estate Interval Fund, LLC that was formed to make co-investment transactions in various individual and/or portfolios of assets through one or more wholly-owned subsidiaries.
The initial draw on the Revolving Credit Facility was in the amount of $92,250,000, with the Williamson Overlook Property, the North Charleston Property, and the Humble Property included in the initial borrowing base. Details of these acquisitions can be referenced here, here, and here. The senior mortgage loans of each of these properties were paid off in conjunction with the first draw on the Revolving Credit Facility.
The Credit Agreement provides that an aggregate committed principal amount of $125 million will be made available to the Borrowers and may be borrowed subject to satisfaction of certain customary conditions. In the lenders’ discretion, the aggregate committed principal amount may be increased to $400 million.
Advances under the Revolving Credit Facility are made based upon a borrowing base that assigns an advance rate of 60% of the lesser of the book value and the appraised value of stabilized properties in the Revolving Credit Facility and 55% for properties in Lease-Up in the Revolving Credit Facility, subject to decreases in certain circumstances.
The Revolving Credit Facility has a scheduled maturity date of March 9, 2025, with two 12-month extension options, subject to certain customary conditions.
Loans under the Credit Agreement accrue interest at a per annum rate equal to the benchmark plus a margin (the “Applicable Margin”) ranging from 1.55% to 1.75%, depending on facility leverage and other factors. The benchmark will initially be an Adjusted Daily Simple SOFR with a floor of 0.00%, and following a benchmark replacement date, an applicable benchmark replacement pursuant to the Credit Agreement. The Credit Agreement provides for customary spread maintenance payments in the event of prepayments, subject to certain exclusions including involuntary events such as casualty and condemnation, and releases of ineligible properties.
The Revolving Credit Facility is generally secured by a full recourse guaranty from Borrower, LLC, FRMF-Humble, LP, FRMF-Gtown-Ops LP, FRMF-Charleston LLC, FRMF-TX GP, LLC, and FRMF-TX Holdings, LP and any subsidiaries of Borrower LLC that may be added to the borrowing base in the future (collectively “Subsidiary Guarantors”).
Fundrise Balanced eREIT II, LLC provides a limited recourse guaranty for certain customary ‘bad acts’ committed by MF JV and its controlled subsidiaries.
The Credit Agreement contains events of default, relating to customary matters including, among other things and subject to certain notice requirements and grace periods, payment defaults, covenant defaults, acceleration of other material indebtedness, bankruptcy events, judgment defaults and change of control events.
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.
