Broadmark Real Estate Management II (BREM), a private lender serving small to mid-sized builders and developers in the Mountain West, has relaunched its open-ended fund Broadmark Real Estate Lending Fund II (BRELF II) on RealCrowd, a direct investment online real estate platform.
The fund, which currently has $359 million in assets under management, underwrites short-term, first-position loans to finance real estate transactions in Colorado, Utah and Texas. Investors are immediately diversified across the entire portfolio of 125 conservatively underwritten loans. BRELF II has generated annualized returns in excess of 11 percent since inception.
“There is a significant gap in the market for short-term real estate financing,” says Adam Fountain, co-owner of BREM. “Short-term loans are typically used to develop, renovate, or improve a commercial or residential property.”
Fountain notes that many smaller regional banks, which in the past provided short-term debt, were forced to close their doors or were absorbed by larger banks following the 2008 financial crisis.
“Small regional banks that survived the Great Recession rarely provide short-term financing in the current market as a result of more restrictive regulations,” said Fountain. “This creates a gap in the credit market and an opportunity for us and our investors.”
RealCrowd is an online marketplace that connects sponsors directly with accredited investors. “Our platform is unique among crowdfunding providers based on the ability for investors to establish a direct relationship with the real estate sponsor,” says Adam Hooper, co-founder and CEO of RealCrowd. “Many of today’s crowdfunding sites function like a hedge fund, which can drive up fees on both sides. To keep costs low and give everyday accredited investors access to institutional-quality investments, RealCrowd serves as a direct marketplace where these entities build new relationships.”
