Bridgefund DST

1031CF Bridge Fund III

Promissory note paying 15.0% interest* and maturing on April 30, 2030, exclusively available through 1031 Crowdfunding.

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*7.0% of the interest on the Notes will be paid currently. The remaining 8.0% of interest will accrue, but not compound, and be payable on maturity or earlier in circumstances as described below. Notes are speculative and involve significant risk. An investment should only be made by investors who are able to bear the risk of and to withstand total loss of principal. See the Frequently Asked Questions below for more details and risk factors.

Bridge Fund III’s Overview

1031CF Bridge Fund III has been formed for the purpose of indirectly investing in, through debt and non-voting preferred equity investments in the Fund’s affiliates, value-add, under capitalized, or otherwise under performing commercial real estate assets, primarily but not limited to senior housing facilities and to bridge such assets to their potential value through efficient management, improved leasing and occupancy rates, revenue enhancing capital expenditures, and cost controls.

The Fund may also provide short-term debt and preferred equity investments to affiliates acquiring stabilized real property. 

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Investment Strategy

1031 CF Properties’ investment strategy seeks to capitalize on their parent company, 1031 Crowdfunding’s, industry leading healthcare real estate platform in DSTs in order to identify and acquire Investments at attractive pricing. We seek to benefit from 1031 Crowdfunding’s reputation and ability to transact at scale with speed and certainty, and its extensive relationships in the real estate industry, particularly in the senior living space.

We cannot assure you that we will achieve our investment objectives. Our ability to achieve our objectives will be subject to many factors, including many that our outside of our control. Please review the risk factors included herein and under the caption “Risk Factors” in the PPM for a discussion of such factors.

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Senior Housing Outlook

We believe the unique combination of the COVID-19 pandemic and demographic and housing trends, combined with the significant increases in construction costs and potentially rising interest rates, should result in continued strong demand for senior housing units and a potential increase in revenues and values of such properties.

1. Resilient Demand1

  • The high needs-based demand and significant home price appreciation over the last three years bodes well compared to more economically sensitive sectors

2. Increased Efficiencies2

  • Senior housing is still in its early days of institutionalization, which should result in more low hanging fruit for operating margins
  • Owners and operators have the opportunity to adopt new technologies and refine processes to drive NOI growth

3. Insufficient Supply2

  • Assisted living facilities under construction have declined rapidly since 2018
  • Pipelines for independent and assisted living declining presents a shortage in housing

(1) Greenstreet Senior Housing Outlook 2024

(2) https://www.us.jll.com/content/dam/jll-com/documents/pdf/research/americas/us/jll-seniors-housing-care-investor-survey-and-trend-outlook.pdf

Aging Demographics

Senior housing has gained traction with institutional investors due to the aging Baby Boomer population, the second largest generation in the US. As they age, many will move to assisted living and memory care facilities for higher levels of care.

10,000 Americans will turn 80 every day starting in 20251

To meet the growing demand, it is estimated that more than 800,000 additional units of senior housing will need to be added in the U.S. by 20302

(1) The Silver Tsunami Finally Arrives. https://seniorshousingbusiness.com/the-silver-tsunami-finally-arrives/

(2) Looking into the Future: How Much Seniors Housing Will Be Needed? National Investment Center for Seniors Housing & Care Report

(3) CDC’s Chronic Diseases in America. https://www.cdc.gov/chronicdisease/resources/infographic/chronic-diseases.htm#print

(4) Alzheimer’s Association, 2019 Alzheimer’s Disease Facts and Figures (2019).

(5) PRB analysis of data from the U.S. Census Bureau, American Community Survey and Population Projections. https://www.prb.org/resources/fact-sheet-aging-in-the-united-states/

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Management Highlights

1031 CF Properties is a wholly owned subsidiary of 1031 Crowdfunding. 1031 Crowdfunding is a private equity real estate investment and asset management firm. Their team has extensive experience with more than $1.5 billion in diverse real estate investments spanning all major real estate sectors and capital markets experience, including more than $550 million in direct senior housing real estate investments. With more than $2.1 billion in securities sold, the team also has collective experience with a variety of investment structures.

1031 CF Properties and 1031 Crowdfunding have significant current and past real estate experience, including sponsoring 14 real estate programs and 15 senior housing facilities across nine states.

Management’s Combined Experience

135

YEARS IN REAL ESTATE INVESTMENTS

$1.5B

IN PRIVATE AND PUBLIC OFFERINGS

$2.1B

EQUITY RAISED THROUGH INVESTMENTS

$3.4B

IN COMBINED REAL ESTATE TRANSACTIONS

The Advisor’s management team collectively has substantial experience in various aspects of acquiring, owning, managing, financing and operating commercial real estate across diverse property types, as well as in the asset allocation and investment management of real estate, debt and other investments. The Sponsor has also sponsored numerous private entities. Please see the PPM under “Management—Executive Officers and Directors,” “Management—The Advisor and The Advisory Agreement,” and “Prior Performance of the Sponsor and its Affiliates” for additional information concerning the experience of the Advisor’s management team.

Frequently Asked Questions

The Manager has adopted two primary investment strategies. Each will be executed through debt or non-voting preferred equity investments in Affiliated Companies. The first is to target value-add, undercapitalized, or otherwise underperforming commercial real estate assets, primarily in the senior housing space, and to bridge such assets to their potential value through efficient management, improved leasing and occupancy rates, revenue enhancing capital expenditures, and cost controls. In such structures, it is expected that the Fund will invest in an Affiliated Company that acquires the underlying real estate asset in fee simple; however, the Fund may also invest in Affiliated Companies that engage in joint ventures or other co-investments. Such investments are expected to have a hold period of between two to four years, although some hold periods could exceed five years.

The second strategy is providing bridge funding for the acquisition of real property by affiliated real estate programs controlled by, or under common control with, the Fund’s Manager. It is anticipated that such bridge funding will be repaid in the short-term (4-12 months) pursuant to the syndication of the underlying real property.

The principal objectives of the Fund will be to: (1) produce current income in the form of interest payments on the Notes from available net cash flow generated by Investments; (2) pay Accrued Interest upon the disposition or repayment of Investments and/or at maturity in the discretion of the Fund; and (3) return Investors’ principal upon maturity. There is no assurance that any of these objectives will be achieved. 

The Fund is offering (the “Offering”) to sell senior secured promissory notes maturing on April 30, 2030, subject to the Fund’s right to extend the maturity of the Notes for up to three successive one-year terms (each a “Note” and collectively, the “Notes”) up to an aggregate $50,000,000 in Notes, subject to an increase at the sole discretion of the Fund to $100,000,000 in Notes (the “Maximum Offering Amount”), upon the terms and conditions stated in this Confidential Private Placement Memorandum, including all exhibits hereto, (the “Memorandum”). The Notes may be referred to as the “Offered Securities.” The Notes will be obligations of the Fund.

The Notes are being issued with a minimum investment of $25,000 and in additional denominations of $1,000; however, the Manager has the right, in its sole discretion, to waive the minimum purchase requirement. 

An investment in the Offered Securities is speculative and involves significant risks, including, but not limited to, the following:

  • The Fund has not yet identified any Investments; Investors in the Fund will not have the opportunity to review future Investments.
  • The Fund was recently organized and does not have any operating history.
  • Investors in the Fund will not have the opportunity to evaluate or approve any Investments.
  • Proceeds from the Offering, otherwise available for investment, will also be used to fund reserves and to pay interest on the Notes, particularly before the Fund acquires Investments; this will reduce the amounts available for investment.
  • Investors will rely entirely on the Manager for management of the Fund and its Investments; the Manager will have broad discretion to invest the Fund’s capital and make decisions regarding Investments.
  • The Fund may not be able to invest the net proceeds of this offering on terms acceptable to Investors, or at all.
  • The Manager’s and the Affiliated Companies’ ability to originate investment opportunities for the Fund may be dependent upon the Sponsor’s ability to procure third party investment in their real estate syndications and other real estate related offerings.
  • Noteholders will not be entitled to any voting or information rights.
  • It may be difficult to realize the value of the collateral securing the Notes.
  • The Fund will pay fees and expenses to the Manager and the Affiliated Companies. These fees will increase Investors’ risk of loss, and will reduce the amounts available for Investments.
  • While there are no transaction fees (such as acquisition, financing, or disposition) payable by the Fund, it is expected that the Affiliated Companies into which the Fund will invest will pay transaction fees to the Sponsor and/or its affiliates.
  • Changes in tax laws, including Section 1031 of the Internal Revenue Code (the “Code”), may occur which may materially adversely affect the Fund’s business plan.
  • The Offered Securities will have very limited liquidity; transferability of the Offered Securities is restricted.
  • While Investors will have a limited ability to request early redemption of the Notes, doing so will result in the Investor forgoing its unpaid Accrued Interest, and thus the Investor will only receive the Current Interest of 7% instead of the Total Interest of 15%.
  • The Fund’s business plan will be restricted to investments in debt securities and non-voting preferred equity issued by Affiliated Companies as a result of compliance with the “finance subsidiary” exemption from registration as an investment company.
  • Substantial actual and potential conflicts of interest exist among the Fund and the Manager and the Affiliated Companies. It is anticipated that all of the Fund’s Investments will be made in affiliates of the Manager.
  • An Investor could lose all or a substantial portion of its investment in the Fund.
  • There is no public trading market for the Offered Securities. It will thus be difficult for an Investor to sell its Offered Securities. As a result, an Investor should not expect liquidity until the maturity of the Investor’s Notes.

A full discussion of Risk Factors is contained in the Private Placement Memorandum and should be read carefully before making an investment decision.

The Notes will bear interest at the annual rate of 15.0%, non-compounded (the “Total Interest”).  Current interest equal to an annual rate of 7.0% will be payable monthly, in arrears, by the 20th day of the following month (the “Current Interest”), and the remainder of the Total Interest will be accrued and payable at maturity and/or upon certain other events as described in this Memorandum (the “Accrued Interest”).  Notes will be issued and will begin accruing interest on the day on which the investment proceeds are accepted by the Fund.

Accrued Interest shall not be due and payable until maturity.  However, in the event that the Manager determines to make a distribution to itself as the sole member of the Fund and there is outstanding Accrued Interest, the Fund is required to make a payment of Accrued Interest, in proportion to each Noteholder’s outstanding Accrued Interest, and will only make a distribution if the following conditions are met: (1) the sum of the Fund’s Invested Capital (as defined below) plus any cash or cash equivalents, following any prospective distribution including the payment of Accrued Interest described in the following clause, equals at least the outstanding principal balance on the Notes; and (2) payment of accrued but unpaid Accrued Interest is made concurrently with such distribution, equal to one-half the amount distributed to the Manager by the Fund.  If condition (1) is met and all Accrued Interest has been paid, then the Manager may make further distributions to itself in its discretion.

The Current Interest of 7.0% annually on the Notes will be paid currently, in arrears, on the 20th of each month (or the next succeeding business day). The Accrued Interest of 8% will accrue, but not compound, and be payable on maturity or earlier in such circumstances as described herein. Notes will be issued and will begin accruing interest on the day on which the investment proceeds therefore are accepted by the Fund. 

All Notes issued pursuant to this Offering will mature on April 30, 2030, subject to three one-year extension rights exercisable by the Manager upon at least 60 days written notice prior to the then applicable maturity date to the Note holders.

As of the maturity date, the Notes, including all principal and any accrued but unpaid interest, shall be due and payable.

The Fund will be permitted to prepay the Notes, in its sole discretion, without penalty. The Fund may prepay the Notes, in whole or in part, by paying the entirety of all accrued interest (Current Interest and Accrued Interest) plus such portion of the outstanding principal of the Notes as the Manager has determined to prepay on the prepayment date determined by the Manager. The Fund shall deliver the Noteholders at least ten days written notice prior to any prepayment. Any partial prepayment of the Notes shall be made pro rata in accordance with the outstanding principal of the Notes held by the Noteholders.

This Offering is for Accredited Investors only. You are an “Accredited Investor” as defined in Rule 501(a) of Regulation D under the Securities Act.

An “Accredited Investor” is a natural person that has (i) an individual net worth, or joint net worth with his or her spouse (or spousal equivalent), of more than $1,000,000 (see below regarding calculation of net worth); or (ii) individual income in excess of $200,000, or joint income with his or her spouse (or spousal equivalent) in excess of $300,000, in each of the two most recent calendar years and has a reasonable expectation of reaching the same income level in the current calendar year. Rule 501 additionally provides requirements for companies, organizations, trusts, and other entities to qualify as accredited investors.

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This overview is for information purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any interests in the 1031 CF Bridge Fund III, LLC (the “Fund”) or any other securities. Any such offer will be made only pursuant to the Fund’s Private Placement Memorandum. Securities are offered through Capulent, LLC, member FINRA / SIPC.

What Our Clients Are Saying

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Ron G.

As a multiple time investor with 1031 Crowdfunding, their dealings with me have always been professional, courteous, responsive, and transparent. I highly recommend them as a credible investment resource.

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David H.

Great company. They made everything very easy. I would highly recommend.

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Tim C.

Very accommodating and will go the mile to answer all your questions. I did two transactions, both were smooth!

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Loren D.

Ed was patient, clear, low pressure, helpful, and knowledgeable. The rest of the team was solid when we decided to go ahead with our investment.

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The Real Estate Crowdfunding Review

Would you recommend that your friend or family member invest with 1031 Crowdfunding?, 75% answered “yes”, 0% answered “no” and 25% answered “undecided”. This was one of the highest positive responses of any platform survey.

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These unpaid testimonials may not be representative of your experience and are not a guarantee of future performance or success. Individual’s specific circumstances and experience will vary.

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