RealtyShares, a leading online marketplace for real estate investing, has just completed its first full stack capital transaction, securing both debt and equity financing totaling $5.9 million for the acquisition of Courtship Village, a 132-unit garden-style apartment complex in Lancaster, Ohio.
“RealtyShares is not just building an origination platform for borrowers, but a full ecosystem that can service different needs,” said Nav Athwal, Founder and CEO of RealtyShares. “Sourcing both debt and equity from a single project is really a game changer for borrowers. It overcomes the inefficiency of raising two types of capital from two different sources, and it is a major milestone not just for real estate marketplaces but for the real estate market more broadly.”
The property acquisition was led by Hamilton Real Estate Capital, a multi-family investment firm and a repeat sponsor on the RealtyShares platform. They first raised $1.3 million in joint venture equity through the marketplace’s network of individual investors. They then secured $4.6 million in commercial debt financing via CBRE, one of RealtyShares’ developing institutional partners.
“RealtyShares was able to provide a one-stop-shop for both equity and debt,” said Tom Kaplan, Principal at Hamilton. “RealtyShares sourced nearly $6 million of the $6.2 million we needed to close. The team was attentive, professional and effective. We couldn’t be happier.”
A new component to the RealtyShares ecosystem is the ability to secure competitive debt financing for the acquisition through CBRE, the largest commercial real estate company in the world. The platform facilitated a deal that offered higher proceeds, a better interest rate and more favorable terms than alternate sources previously considered by Hamilton.
“With RealtyShares’ crowdfunded joint venture capital behind our senior debt, we’re forging an exciting new relationship with RealtyShares in the small balance multifamily space,” said Adam Dosskey, Vice President of Wholesale Lending at CBRE. “As a well-maintained, performing asset in the heartland of America, Courtship was an ideal fit for CBRE’s Small Balance multifamily loan product.”
“Hamilton brought us a sound multifamily asset in a strong market that naturally lended itself to creative financing,” said Nick Fletcher, Associate Director of Commercial Debt Originations at RealtyShares. “We saw this as an opportunity to complement our equity position with accretive debt financing that brought the blended cost of capital down. This deal underscores RealtyShares’ efforts to find better methods to secure capital for sponsors, and this is sure to be the first of many more full stack deals to come.”
To date, the RealtyShares network of investors has funded upwards of $300 million across more than 550 investment opportunities on the platform, funding residential and commercial projects in 35 states.