Online real estate crowdfunding platform RealtyMogul has closed a $49 million bridge loan to fund Elite Street Capital’s acquisition of the Metropolitan at Buckhead, an apartment complex in suburban Atlanta.
The financing marks the “largest loan ever for an online platform,” the company said, seemingly defying the common perception that such platforms are reserved for funding small loans only.
“As a marketplace leader, this deal demonstrates not only our ability to attract quality sponsors but also our capability to execute on large-balance loan,” RealtyMogul CEO Jilliene Helman said. “[We] saw this transaction as an opportunity to finance a property located in a Class A submarket with a defendable basis and a clear path to stabilization.”
After raising $250 million of capital for commercial real estate debt investments in June, the company noted that bridge loans would carry three- to five-year terms. The company did not immediately respond to requests for additional comment regarding terms and pricing of the loan.
Elite Street Capital has extensive rehabbing plans for the 431-unit class B apartment building, across from the Lennox Mall in Atlanta. The asset’s transitional nature and the size of the loan — contrary to claims from critics — makes it at least conceivable that online crowdfunding could one day give traditional lenders a run for their money amid a financing market in constant competition for yield.
Yet hardened commercial real estate lenders have argued that, while online crowdfunding may serve a small niche, its “impersonal” nature will never take the place of traditional relationships with borrowers and fellow lenders in larger markets.
“Commercial real estate is a people business and it always will be,” one lender previously told Real Estate Capital.
With this latest transaction, RealtyMogul has facilitated just under $200 million in debt and equity transactions.