1031 Crowdfunding Launches Seniors Housing REIT With Initial All-Cash Acquisition Plan

By Darian E. Fernandez | November 9, 2023

Edward Fernandez, President and CEO of 1031 Crowdfunding, announces details around his newly launched private REIT, the Covenant Senior Housing REIT (CSHREIT), and how it will benefit investors: “In senior housing, we were able to buy properties at an 8.5 percent cap rate and borrow money at 6.9 percent. That means I have positive leverage and can take down deals with positive cashflow,” says Fernandez.

1031 crowdfunding this week, launched a new private real estate investment trust focusing on the senior housing sector, with a plan to initially make acquisitions on an all-cash or short-term debt basis before lining up fixed rate financing when interest rates normalize.

The Irvine, California-based real estate investment management company, which is targeted toward retail investors, structured the Covenant Senior Housing REIT to make it easier to move ahead with acquisitions with when debt is more difficult to secure, Edward Fernandez, president and chief executive, told Real Estate Capital USA

“We are favoring all-cash because the debt markets are so difficult today and it is delaying closing,” Fernandez said. “Lenders are participating in this market, but they are all participating with stricter requirements due to the higher rate environment. This is causing us to have to come up with a new approach. Our strategy is to write a check and buy a property with the understanding that when rates are more favorable, we can refinance and pull out that equity to use for acquisitions.”

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