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Crowdfunding start-up to buy Hollywood multifamily project for $67M
New York-based FundRebel in contract to buy nearly completed 204-unit apartment building
UPDATED, June 21, 12:50 p.m.
FundRebel, a crowdfunding real estate start-up, is planning a $67 million purchase of a Hollywood multifamily project as its first deal.
The New York-based firm is in contract to buy Nine Hollywood, a 12-story apartment building with 204 units and 7,000 square feet of ground-floor retail, FundRebel CEO Mark Drachman said in an emailed statement. The project at 1809 Jackson Street is under construction with an anticipated completion later this year.
“The expected closing date for Nine Hollywood is November or December,” Drachman said. “This is a projection based on expectations of receiving [the temporary certificate of occupancy] by the end of September.”
The seller is an entity managed by Giuseppe Iadisernia in Hallandale Beach. In 2010, Iadisernia paid $2 million for the 0.8-acre development site. The developer obtained a $43 million construction loan to build Nine Hollywood last year, records show.
Iadisernia also teamed up with MGM Construction Group to develop Oasis Hallandale, a condominium complex with two 25-story towers adjacent to Gulfstream Park.
Nine Hollywood will have a mix of studios, one- and two-bedroom apartments, with asking rents ranging between $1,880 to $3,600 a month, Drachman said.
His firm targeted Nine Hollywood due to the city’s demographics and the potential immediate cash flow the project may generate once it’s completed, Drachman said.
FundRebel intends to buy Nine Hollywood through a real estate investment trust fund for which the company is currently raising capital. The goal is $75 million, Drachman said.
Investors buy shares in the fund, and then the money raised from those shares will be used to buy Nine Hollywood, Drachman explained. The minimum investment is $1,000.
“There are several hundred investors who have purchased shares before the identification of our first asset,” he said. “With the announcement of the fund’s first asset, we have great expectations of significant funds being raised over the coming months.”
FundRebel’s crowdfunding model differs from the capital raising strategy implemented by Cardone Capital, the Aventura-based firm led by social media influencer and sales coaching guru Grant Cardone. Cardone Capital, which owns roughly $5 billion in multifamily projects across the U.S., including South Florida, typically buys a property and then sells shares in the ownership entity to regular investors.