fundrise real estate investment trust, llc (the “income ereit · registration with the sec does...

253G21tv523881_253g2.htm253G2

FiledPursuanttoRule253(g)(2)FileNo.024-10492

AssubmittedtotheSecuritiesandExchangeCommissiononJune27,2019

OFFERINGCIRCULAR

FundriseRealEstateInvestmentTrust,LLC(the“IncomeeREIT®”)

SponsoredbyRiseCompaniesCorp.

Upto$19,736,404inCommonShares

FundriseRealEstateInvestmentTrust,LLCisaDelawarelimitedliabilitycompanyformedtooriginate,investinandmanage

adiversifiedportfolioofcommercialrealestateinvestments.ThroughMay27,2019ourongoingofferinghasraisedapproximately$116.4millionincapital.Wehaveused,andcontinuetoexpecttousesubstantiallyallofthenetproceedsfromourofferingstooriginate,acquireandstructurecommercialrealestateloans(includingseniormortgageloans,subordinatedmortgageloans(alsoreferredtoasB-Notes),mezzanineloans,andparticipationsinsuchloans)andinvestmentsincommercialrealestate.Wemayalsoinvestincommercialrealestate-relateddebtsecurities(includingcommercialmortgage-backedsecurities,orCMBS,collateralizeddebtobligations,orCDOs,andREITseniorunsecureddebt)andotherrealestate-relatedassets.

WeareexternallymanagedbyFundriseAdvisors,LLC,orourManager,whichisaninvestmentadviserregisteredwiththe

SecuritiesandExchangeCommission,orSEC,andawholly-ownedsubsidiaryofoursponsor,RiseCompaniesCorp.,theparentcompanyofFundrise,LLC,ouraffiliate.RegistrationwiththeSECdoesnotimplyacertainlevelofskillortraining.Fundrise,LLCownsandoperatesanonlineinvestmentplatformwww.fundrise.com(the“FundrisePlatform”)thatallowsinvestorstobecomeequityordebtholdersinrealestateopportunitiesthatmayhavebeenhistoricallydifficulttoaccessforsomeinvestors.ThroughtheuseoftheFundrisePlatform,investorscanbrowseandscreenrealestateinvestments,viewdetailsofaninvestmentandsignlegaldocumentsonline.Weelectedtobetreatedasarealestateinvestmenttrust,orREIT,forU.S.federalincometaxpurposesbeginningwithourtaxableyearendedDecember31,2015.

Wearecontinuingtoofferupto$19,736,404inourcommonshares,whichrepresentsthevalueofthesharesavailabletobe

offeredasofMay27,2019outoftherolling12-monthmaximumofferingamountof$50millioninourcommonshares.Theminimuminvestmentinourcommonsharesforinitialpurchasesis100shares,or$1,000basedonthecurrent$10.00pershareprice.However,incertaininstances,wemayrevisetheminimumpurchaserequirementsinthefutureorelecttowaivetheminimumpurchaserequirement,suchasforindividualswhoparticipateindifferentplansestablishedbyourManagerthroughwhichtheycaninvestinourcommonshares.Weexpecttooffercommonsharesinthisofferinguntilweraisethemaximumamountbeingoffered,unlessterminatedbyourManageratanearliertime.Thepersharepurchasepriceforourcommonsharesiscurrently$10.00pershare.Thepersharepurchasepriceinthisofferingwillbeadjustedatthebeginningofeveryfiscalquarter(orassoonascommerciallyreasonablethereafter),andwillequalthegreaterof(i)$10.00pershareor(ii)thesumofournetassetvalue,orNAV,dividedbythenumberofourcommonsharesoutstandingasoftheendofthepriorfiscalquarter(“NAVpershare”).Investorswillpaythemostrecentpubliclyannouncedpurchasepriceasofthedateoftheirsubscription.Althoughwedonotintendtolistourcommonsharesfortradingonastockexchangeorothertradingmarket,wehaveadoptedaredemptionplandesignedtoprovideourshareholderswithlimitedliquidityonanongoingbasisfortheirinvestmentinourshares.

WeintendtocontinuetodistributeoursharesprimarilythroughtheFundrisePlatform.

Investinginourcommonsharesisspeculativeandinvolvessubstantialrisks.Youshouldpurchasethesesecuritiesonly

ifyoucanaffordacompletelossofyourinvestment.See“RiskFactors”beginningonpage26toreadaboutthemoresignificantrisksyoushouldconsiderbeforebuyingourcommonshares.Theserisksincludethefollowing:

· WedependonourManagertoselectourinvestmentsandconductouroperations.WepayfeesandexpensestoourManager

anditsaffiliatesthatwerenotdeterminedonanarm’slengthbasis,andthereforewedonothavethebenefitofarm’slengthnegotiationsofthetypenormallyconductedbetweenunrelatedparties.Thesefeesincreaseyourriskofloss.

· Wehavealimitedoperatinghistory.Ourpriorperformancemaynotpredictourfutureresults.Therefore,thereisnoassurance

thatwewillachieveourinvestmentobjectives. · OurManager’sexecutiveofficers,andkeyrealestateanddebtfinanceprofessionalsarealsoofficers,directors,managers

and/orkeyprofessionalsofoursponsoranditsaffiliates.Asaresult,theyfaceconflictsofinterest,includingtimeconstraints,allocationofinvestmentopportunitiesandsignificantconflictscreatedbyourManager’scompensationarrangementswithusandotheraffiliatesofoursponsor.

· Oursponsorhassponsoredandmayinthefuturesponsorothercompaniesthatcompetewithus,andoursponsordoesnothaveanexclusivemanagementarrangementwithus;however,oursponsorhasadoptedapolicyforallocatinginvestmentsbetweendifferentcompaniesthatitsponsorswithsimilarinvestmentstrategies.

· ThisofferingisbeingmadepursuanttorecentlyadoptedrulesandregulationsunderRegulationAoftheSecuritiesActof

1933,asamended,ortheSecuritiesAct.Thelegalandcompliancerequirementsoftheserulesandregulations,includingongoingreportingrequirementsrelatedthereto,arerelativelyuntested.

· Ifweinternalizeourmanagementfunctions,yourinterestinuscouldbedilutedandwecouldincurothersignificantcosts

associatedwithbeingself-managed. · Wemaychangeourinvestmentguidelineswithoutshareholderconsent,whichcouldresultininvestmentsthataredifferent

fromthosedescribedinthisofferingcircular. · Althoughourdistributionpolicyistouseourcashflowfromoperationstomakedistributions,ourorganizationaldocuments

permitustopaydistributionsfromanysource,includingofferingproceeds,borrowingsorsalesofassets.Wehavenotestablishedalimitontheamountofproceedswemayusetofunddistributions.Ifwepaydistributionsfromsourcesotherthanourcashflowfromoperations,wewillhavelessfundsavailableforinvestmentsandyouroverallreturnmaybereduced.Inanyevent,weintendtomakeannualdistributionsasrequiredtocomplywithREITdistributionrequirementsandavoidU.S.federalincomeandexcisetaxesonretainedincome.

· Oursponsor’sinternalaccountantsandassetmanagementteamcalculatesourNAVonaquarterlybasisusingvaluation

methodologiesthatinvolvesubjectivejudgmentsandestimates.Asaresult,ourNAVmaynotaccuratelyreflecttheactualpricesatwhichourcommercialrealestateassetsandinvestments,includingrelatedliabilities,couldbeliquidatedonanygivenday.

· OuroperatingagreementdoesnotrequireourManagertoseekshareholderapprovaltoliquidateourassetsbyaspecifieddate,

nordoesouroperatingagreementrequireourManagertolistoursharesfortradingbyaspecifieddate.Nopublicmarketcurrentlyexistsforourshares.Untiloursharesarelisted,ifever,youmaynotsellyourshares.Ifyouareabletosellyourshares,youmayhavetosellthematasubstantialloss.

· IfwefailtoqualifyasaREITforU.S.federalincometaxpurposesandnoreliefprovisionsapply,wewouldbesubjectto

entity-levelU.S.federalcorporateincometaxand,asaresult,ourcashavailablefordistributiontoourshareholdersandthevalueofoursharescouldmateriallydecrease.

· Realestateinvestmentsaresubjecttogeneraldownturnsintheindustryaswellasdownturnsinspecificgeographicareas.We

cannotpredictwhattheoccupancylevelwillbeinaparticularbuildingorthatanytenantormortgageorotherrealestate-relatedloanborrowerwillremainsolvent.Accordingly,wecannotguaranteethatyouwillreceivecashdistributionsorappreciationofyourinvestment.

· Ourinvestmentsincommercialrealestateandotherselectrealestate-relatedassetsaresubjecttorisksrelatingtothevolatility

inthevalueoftheunderlyingrealestate,defaultonunderlyingincomestreams,fluctuationsininterestrates,andotherrisksassociatedwithdebt,andrealestateinvestmentgenerally.Theseinvestmentsareonlysuitableforsophisticatedinvestorswithahigh-riskinvestmentprofile.TheUnitedStatesSecuritiesandExchangeCommissiondoesnotpassuponthemeritsoforgiveitsapprovaltoany

securitiesofferedorthetermsoftheoffering,nordoesitpassupontheaccuracyorcompletenessofanyofferingcircularorothersolicitationmaterials.ThesesecuritiesareofferedpursuanttoanexemptionfromregistrationwiththeCommission;however,theCommissionhasnotmadeanindependentdeterminationthatthesecuritiesofferedareexemptfromregistration.

Theuseofprojectionsorforecastsinthisofferingisprohibited.Nooneispermittedtomakeanyoralorwritten

predictionsaboutthecashbenefitsortaxconsequencesyouwillreceivefromyourinvestmentinourcommonshares.

PerShare Total

Maximum PublicOfferingPrice(1) $ 10.00 $ 19,736,404UnderwritingDiscountsandCommissions(2) $ — $ —ProceedstoUsfromthisOfferingtothePublic(BeforeExpenses) $ 10.00 $ 19,736,404

(1) Thepricepersharewillbeadjustedeveryfiscalquarterandwillbebasedonthegreaterof(i)$10.00pershareor(ii)thesumofournetassetvalue,orNAV,dividedbythenumberofourcommonsharesoutstandingasoftheendofthepriorfiscalquarter(NAVpershare).Thisisa“bestefforts”offering.

(2) Investorsdonotpayupfrontsellingcommissionsinconnectionwiththepurchaseofourcommonshares.Wewillreimburse

ourManagerforadditionalofferingcosts,whichareexpectedtobeapproximately$45,000.Reimbursementpaymentsaremadeinmonthlyinstallments,buttheaggregatemonthlyamountreimbursedcanneverexceed0.50%oftheaggregategrossofferingproceedsfromourofferings.Ifthesumofthetotalunreimbursedamountofsuchofferingcosts,plusnewcostsincurredsincethelastreimbursementpayment,exceedsthereimbursementlimitdescribedabovefortheapplicablemonthlyinstallment,theexcesswillbeeligibleforreimbursementinsubsequentmonths(subjecttothe0.50%limit),calculatedonanaccumulatedbasis,untilourManagerhasbeenreimbursedinfull.AsofDecember31,2018,approximately$1,006,000inorganizationalandofferingcostshavebeenincurredbyandreimbursedtoourManagerinconnectionwithourofferings.

See“ManagementCompensation”foradescriptionofadditionalfeesandexpensesthatwewillpayourManager.WewillofferourcommonsharesonabesteffortsbasisthroughtheonlineFundrisePlatform.NeitherFundrise,LLCnoranyotheraffiliatedentityinvolvedintheofferandsaleofthesharesbeingofferedherebyisamemberfirmoftheFinancialIndustryRegulatoryAuthority,Inc.,orFINRA,andnopersonassociatedwithuswillbedeemedtobeabrokersolelybyreasonofhisorherparticipationinthesaleofourcommonshares.Generally,nosalemaybemadetoyouinthisofferingiftheaggregatepurchasepriceyoupayismorethan10%ofthe

greaterofyourannualincomeornetworth.Differentrulesapplytoaccreditedinvestorsandnon-naturalpersons.Beforemakinganyrepresentationthatyourinvestmentdoesnotexceedapplicablethresholds,weencourageyoutoreviewRule251(d)(2)(i)(C)ofRegulationA.Forgeneralinformationoninvesting,weencourageyoutorefertowww.investor.gov.

ThisofferingcircularfollowstheFormS-11disclosureformat.

ThedateofthisofferingcircularisJune7,2019

IMPORTANTINFORMATIONABOUTTHISOFFERINGCIRCULAR

Pleasecarefullyreadtheinformationinthisofferingcircularandanyaccompanyingofferingcircularsupplements,whichwe

refertocollectivelyastheofferingcircular.Youshouldrelyonlyontheinformationcontainedinthisofferingcircular.Wehavenotauthorizedanyonetoprovideyouwithdifferentinformation.Thisofferingcircularmayonlybeusedwhereitislegaltosellthesesecurities.Youshouldnotassumethattheinformationcontainedinthisofferingcircularisaccurateasofanydatelaterthanthedatehereoforsuchotherdatesasarestatedhereinorasoftherespectivedatesofanydocumentsorotherinformationincorporatedhereinbyreference.

ThisofferingcircularispartofanofferingstatementthatwefiledwiththeSEC,usingacontinuousofferingprocess.

Periodically,aswemakematerialinvestments,updateourquarterlyNAVpershareamount,orhaveothermaterialdevelopments,wewillprovideanofferingcircularsupplementthatmayadd,updateorchangeinformationcontainedinthisofferingcircular.Anystatementthatwemakeinthisofferingcircularwillbemodifiedorsupersededbyanyinconsistentstatementmadebyusinasubsequentofferingcircularsupplement.TheofferingstatementwefiledwiththeSECincludesexhibitsthatprovidemoredetaileddescriptionsofthemattersdiscussedinthisofferingcircular.YoushouldreadthisofferingcircularandtherelatedexhibitsfiledwiththeSECandanyofferingcircularsupplement,togetherwithadditionalinformationcontainedinourannualreports,semi-annualreportsandotherreportsandinformationstatementsthatwewillfileperiodicallywiththeSEC.Seethesectionentitled“AdditionalInformation”belowformoredetails.

TheofferingstatementandallsupplementsandreportsthatwehavefiledorwillfileinthefuturecanbereadattheSEC

website,www.sec.gov,orontheFundrisePlatformwebsite,www.fundrise.com.ThecontentsoftheFundrisePlatformwebsite(otherthantheofferingstatement,thisofferingcircularandtheappendicesandexhibitsthereto)arenotincorporatedbyreferenceinorotherwiseapartofthisofferingcircular.

Oursponsorandthosesellingsharesonourbehalfinthisofferingarepermittedtomakeadeterminationthatthepurchasersof

sharesinthisofferingare“qualifiedpurchasers”inrelianceontheinformationandrepresentationsprovidedbytheshareholderregardingtheshareholder’sfinancialsituation.Beforemakinganyrepresentationthatyourinvestmentdoesnotexceedapplicablethresholds,weencourageyoutoreviewRule251(d)(2)(i)(C)ofRegulationA.Forgeneralinformationoninvesting,weencourageyoutorefertowww.investor.gov.

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TABLEOFCONTENTS

IMPORTANTINFORMATIONABOUTTHISOFFERINGCIRCULAR iSTATELAWEXEMPTIONANDPURCHASERESTRICTIONS iiiQUESTIONSANDANSWERSABOUTTHISOFFERING 1OFFERINGSUMMARY 12RISKFACTORS 26STATEMENTSREGARDINGFORWARD-LOOKINGINFORMATION 61ESTIMATEDUSEOFPROCEEDS 63MANAGEMENT 64MANAGEMENTCOMPENSATION 70PRINCIPALSHAREHOLDERS 72CONFLICTSOFINTEREST 73INVESTMENTOBJECTIVESANDSTRATEGY 79PLANOFOPERATION 95DESCRIPTIONOFOURCOMMONSHARES 107U.S.FEDERALINCOMETAXCONSIDERATIONS 125ERISACONSIDERATIONS 147PLANOFDISTRIBUTION 150HOWTOSUBSCRIBE 152LEGALMATTERS 153EXPERTS 153ADDITIONALINFORMATION 154INDEXTOFINANCIALSTATEMENTSOFFUNDRISEREALESTATEINVESTMENTTRUST,LLC F-1APPENDIXA:FORMOFSUBSCRIPTIONAGREEMENT A-1

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STATELAWEXEMPTIONANDPURCHASERESTRICTIONS

Ourcommonsharesarebeingofferedandsoldonlyto“qualifiedpurchasers”(asdefinedinRegulationA).AsaTier2offering

pursuanttoRegulationA,thisofferingwillbeexemptfromstatelaw“BlueSky”review,subjecttomeetingcertainstatefilingrequirementsandcomplyingwithcertainanti-fraudprovisions,totheextentthatourcommonsharesofferedherebyareofferedandsoldonlyto“qualifiedpurchasers”oratatimewhenourcommonsharesarelistedonanationalsecuritiesexchange.“Qualifiedpurchasers”include:(i)“accreditedinvestors”underRule501(a)ofRegulationDand(ii)allotherinvestorssolongastheirinvestmentinourcommonsharesdoesnotrepresentmorethan10%ofthegreateroftheirannualincomeornetworth(fornaturalpersons),or10%ofthegreaterofannualrevenueornetassetsatfiscalyear-end(fornon-naturalpersons).However,ourcommonsharesarebeingofferedandsoldonlytothoseinvestorsthatarewithinthelattercategory(i.e.,investorswhoseinvestmentinourcommonsharesdoesnotrepresentmorethan10%oftheapplicableamount),regardlessofaninvestor’sstatusasan“accreditedinvestor”.Accordingly,wereservetherighttorejectanyinvestor’ssubscriptioninwholeorinpartforanyreason,includingifwedetermineinoursoleandabsolutediscretionthatsuchinvestorisnota“qualifiedpurchaser”forpurposesofRegulationA.

Todeterminewhetherapotentialinvestorisan“accreditedinvestor”forpurposesofsatisfyingoneofthetestsinthe“qualified

purchaser”definition,theinvestormustbeanaturalpersonwhohas:

1. anindividualnetworth,orjointnetworthwiththeperson’sspouse,thatexceeds$1,000,000atthetimeofthepurchase,excludingthevalueoftheprimaryresidenceofsuchperson;or

2. earnedincomeexceeding$200,000ineachofthetwomostrecentyearsorjointincomewithaspouseexceeding$300,000for

thoseyearsandareasonableexpectationofthesameincomelevelinthecurrentyear.

Iftheinvestorisnotanaturalperson,differentstandardsapply.SeeRule501ofRegulationDformoredetails.Forpurposesofdeterminingwhetherapotentialinvestorisa“qualifiedpurchaser”,annualincomeandnetworthshouldbe

calculatedasprovidedinthe“accreditedinvestor”definitionunderRule501ofRegulationD.Inparticular,networthinallcasesshouldbecalculatedexcludingthevalueofaninvestor’shome,homefurnishingsandautomobiles.

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QUESTIONSANDANSWERSABOUTTHISOFFERING

Thefollowingquestionsandanswersaboutthisofferinghighlightmaterialinformationregardingusandthisofferingthatis

nototherwiseaddressedinthe“OfferingSummary”sectionofthisofferingcircular.Youshouldreadthisentireofferingcircular,includingthesectionentitled“RiskFactors”,beforedecidingtopurchaseourcommonshares.

Q: WhatisFundriseRealEstateInvestmentTrust,LLC? A: WewereorganizedasaDelawarelimitedliabilitycompanytooriginate,investinandmanageadiversifiedportfolioofcommercial

realestateloansandinvestmentsincommercialrealestate.Wemayalsoinvestincommercialrealestate-relateddebtsecuritiesandotherrealestate-relatedassets.Theuseoftheterms“FundriseRealEstateInvestmentTrust”,the“company”,the“IncomeeREIT®”,“we”,“us”or“our”inthisofferingcircularrefertoFundriseRealEstateInvestmentTrust,LLCunlessthecontextindicatesotherwise.

Q: Howmuchhaveyouraisedinyouroffering? A: AsofMay27,2019,wehaveraisedapproximately$116.4millioninourongoingoffering(notincludingtheapproximate$1.2

millionreceivedinprivateplacementstooursponsor,RiseCompaniesCorp.,andFundrise,LP,anaffiliateofoursponsor). Q: Whatpercentageoftheproceedsfromyourinitialofferinghaveyouinvested? A: AsofMay27,2019,theCompanyhasinvestedorcommittedtoinvestdebtorequity,includingcommitmentsnotfullydrawn

down,butnotnecessarilyobligatedtobefunded,ofapproximately87%ofthenetproceedsraised.Inordertostructurecashdeploymentandpotentiallyimproverisk-adjustedreturns,theCompanymayfromtime-to-timemakecommitmentsinexcessoftheproceedsraisedinouroffering.TheCompanybelievesthatpayoffsandrefinancingofcurrentinvestmentsofdebtandequityoutstanding,linesofcredit,continuedcapitalraising,fundingcommitmentsnotultimatelydrawnupon,andotherpotentialcashdeploymentsolutions,willcontinuetoallowittosatisfyallofitsfundingcommitmentsinthefuture.

Q: Whatisarealestateinvestmenttrust,orREIT? A: Ingeneral,aREITisanentitythat: ·combinesthecapitalofmanyinvestorstoacquireorprovidefinancingforadiversifiedportfolioofrealestateinvestmentsunder

professionalmanagement; ·isabletoqualifyasa“realestateinvestmenttrust”undertheInternalRevenueCodeof1986,asamended,theCode,forU.S.

federalincometaxpurposesandisthereforegenerallyentitledtoadeductionforthedividendsitpaysandnotsubjecttoU.S.federalcorporateincometaxesonitsnetincomethatisdistributedtoitsshareholders.Thistreatmentsubstantiallyeliminatesthe“doubletaxation”(taxationatboththecorporateandshareholderlevels)thatgenerallyresultsfrominvestmentsinacorporation;and

·generallypaysdistributionstoinvestorsofatleast90%ofitsannualordinarytaxableincome. Inthisofferingcircular,werefertoanentitythatqualifiestobetaxedasarealestateinvestmenttrustforU.S.federalincometax

purposesasaREIT.WeelectedtobetreatedasaREITforU.S.federalincometaxpurposescommencingwithourtaxableyearendedDecember31,2015.

Q: WhatisaneREIT®? A: An“eREIT®”isatypeofrealestateinvestmenttrustsponsoredbyRiseCompaniesCorp.,oursponsor,andoffereddirectlyto

investorsonlineontheFundrisePlatform,withoutanybrokersorsellingcommissions.EacheREIT®intendstoinvestinadiversifiedpoolofcommercialrealestateassets,suchasapartments,hotels,shoppingcenters,andofficebuildingsfromacrossthecountry.

Q: Whochooseswhichinvestmentsyoumake? A: WeareexternallymanagedbyFundriseAdvisors,LLC,orourManager,aninvestmentadviserregisteredwiththe

SEC.RegistrationwiththeSECdoesnotimplyacertainlevelofskillortraining.OurManagermakesallofourinvestmentdecisions.

Q: WhoisRiseCompaniesCorp.? A: RiseCompaniesCorp.,oursponsorandtheparentcompanyofourManager,isalsotheparentcompanyofFundrise,LLC,our

affiliate.Fundrise,LLCownsandoperatesanonlineinvestmentplatformwww.fundrise.com(the“FundrisePlatform”). Q: WhatistheFundrisePlatform? A: TheFundrisePlatformisanonlineinvestmentplatformforcommercialrealestate.Fundrisegivesinvestorstheabilityto:

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·browseinvestmentofferingsbasedoninvestmentpreferencesincludinglocation,assettype,riskandreturnprofile; ·transactentirelyonline,includingdigitallegaldocumentation,fundstransfer,andownershiprecordation;and ·manageandtrackinvestmentseasilythroughanonlineportfolio;receiveautomateddistributionsand/orinterestpayments,and

regularfinancialreporting.

Q: Whatcompetitiveadvantagesdoyouachievethroughyourrelationshipwithyoursponsor? A: OurManagerutilizesthepersonnelandresourcesofoursponsortoselectourinvestmentsandmanageourday-to-dayoperations.

Oursponsor’scorporate,investmentandoperatingplatformsarewellestablished,allowingustorealizeeconomiesofscaleandotherbenefitsincludingthefollowing:

·ExperiencedManagementTeam—Oursponsorhasahighlyexperiencedmanagementteamofrealestateanddebtfinance

professionals,ledbyBenjaminS.Miller,itsCo-FounderandChiefExecutiveOfficer.Theseniorinvestmentexecutivesofoursponsorhavededicatedtheirentirecareerstothecommercialrealestatesector.Theseexecutivesprovidestabilityinthemanagementofourbusinessandallowustobenefitfromtheknowledgeandindustrycontactstheyhavegainedthroughnumerousrealestatecycles.Pleasesee“Management—ExecutiveOfficersofourManager”forbiographicalinformationregardingtheseindividuals.

· RealEstateInvestmentExperience—AsofDecember31,2018,oursponsorfacilitatedororiginatedapproximately245real

estateassetsthroughthevariousFundrisePlatforminvestmentopportunitieswithaggregatepurchasepricesofapproximately$3.2billion,excluding3WorldTradeCenter(weexcludethisassetbecausewhiletheamountofequityinvestedintheprojectwassimilartootherinvestmentsmadebyoursponsor,theaggregatepurchasepriceof3WorldTradeCenterwasmuchgreaterrelativetooursponsor’sotherinvestments,andwouldgreatlyinflatetheaggregatepurchasepriceoftheotherassetsdisclosed).Ofthe$3.2billionaggregaterealestatepurchaseprices,oursponsorofferedthroughtheFundrisePlatforminvestmentopportunitiesapproximately$658million,consistingofapproximately$229millionofcommercialrealestateloanassets,$215millionofinvestmentsincommercialrealestate(primarilythroughmajority-ownedsubsidiarieswithrightstoreceivepreferredeconomicreturns),and$214millionofcommercialrealestatecommonequityinvestments,includingdirectequitypurchases.TheportfoliosincludedintheFundrisePlatforminvestmentopportunitiesarediversifiedbyinvestmentsize,securitytype,propertytypeandgeographicregion.Asaresultofthedepthandthoroughnessofitsunderwritingprocess,theextensiveinvestingexperienceofitsmanagementteamanditsstrongperformancerecordinmanagingadiverseportfolioofassets,webelieveoursponsorhasearnedareputationasaleadingrealestatemanager,whichhasallowedittoaccessfundingfromabroadbaseofinvestors.

·MarketKnowledgeandIndustryRelationships—Throughitsactiveandbroadparticipationinthefixedincomemarkets,our

sponsorbenefitsfrommarketinformationthatenablesittoidentifyattractivecommercialrealestatedebtinvestmentopportunitiesandtomakeinformeddecisionswithregardtotherelativevaluationoffinancialassetsandcapitalallocation.Webelievethatoursponsor’sextensiveindustryrelationshipswithawidevarietyofcommercialrealestateownersandoperators,brokersandotherintermediariesandthirdpartycommercialrealestatedebtoriginatorsprovidesuswithacompetitiveadvantageinsourcingattractiveinvestmentopportunitiestomeetourinvestmentobjectives.

·RelatedPartyLoansandWarehousingofAssets—Ifwehavesufficientfundstoacquireonlyaportionofaloanorother

investmentthen,inordertocovertheshortfall,wemayobtainarelatedpartyloanfrom,orissueaparticipationinterestto,FundriseLending,LLC,awholly-ownedsubsidiaryofRiseCompaniesCorp.(“FundriseLending”)oritsaffiliates.Ouroperatingagreementexpresslyauthorizesustoenterintosuchrelatedpartyloansandtoissuesuchparticipationinterests.Alternatively,FundriseLendingoritsaffiliatesmaycloseandfundeachloanorotherinvestmentpriortoitbeingacquiredbyus.Thisabilitytowarehouseinvestmentsallowsustheflexibilitytodeployourofferingproceedsasfundsareraised.Wemaythenacquiresuchinvestmentatapriceequaltothefairmarketvalueofsuchinvestment,providedthatitsfairmarketvalueismateriallyequaltoitscost(i.e.,theaggregateequitycapitalinvestedbyFundriseLendingoritsaffiliatesinconnectionwiththeacquisitionandduringthewarehousingofsuchinvestments,plusassumptionofdebtandanycosts,suchasaccruedpropertymanagementfeesandtransfertaxes,incurredduringorasaresultofthewarehousingor,withrespecttodebt,theprincipalbalanceplusaccruedinterestnetofanyapplicablespecialservicingfees).See“PlanofOperation–RelatedPartyLoansandWarehousingofAssets”.

·RegulationAExperience—Oursponsor’sexecutiveteamwasoneofthefirstgroupstosponsorarealestateinvestment

opportunitythroughaRegulationAoffering,havingsponsoredthreeRegulationAofferingsfromAugust2012throughFebruary2014,andfiledandqualifiedsevenadditionalofferingssimilartothisoneundertherevisedRegulationAruleseffectiveasofJune2015(commonlyreferredtoas“RegulationA+”).Inaddition,oursponsor,throughitswholly-ownedsubsidiaries,runsanactiveonlineinvestmentplatformthatutilizesprivateofferingexemptionsundertheSecuritiesActtosellrealestate-relatedsecuritiesto

investors.ItsmanagementteamisskilledinreportingandcomplianceobligationsrelatedtoRegulationAandtheSecuritiesAct,andhaswell-developedcomplianceandinvestorrelationsfunctions.

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FormoreinformationregardingFundrise,LP’sdistributionsupportcommitmentandourdistributionpolicy,pleasesee“Description

ofOurCommonShares—Distributions—DistributionSupportCommitment”.

Q: WhyshouldIinvestincommercialrealestateinvestments? A: Ourgoalistoprovideaprofessionallymanaged,diversifiedportfolioofhigh-qualitycommercialrealestateassetstoinvestorswho

generallyhavehadverylimitedaccesstosuchinvestmentsinthepast.Allocatingsomeportionofyourportfoliotoadirectinvestmentinhigh-qualitycommercialrealestateassetsmayprovideyouwith:

·areasonablypredictableandstablelevelofcurrentincomefromtheinvestment; ·diversificationofyourportfolio,byinvestinginanassetclassthathistoricallyhasnotbeencorrelatedwiththestockmarket

generally;and ·theopportunityforcapitalappreciation. Q: WhyshouldIinvestspecificallyinacompanythatisfocusedprimarilyoncommercialrealestateloansandother

investmentsincommercialrealestate? A: Webelievethattheabsenceofmanyhistoricalsourcesofdebtfinancingforthecommercialrealestatemarket,resultingfrom

continueduncertaineconomicconditionshasandwillcontinuetocreateafavorableenvironmentforexperiencedcommercialrealestatelenderstoproduceattractive,risk-adjustedreturnsemployinglittleornoleverageinthenearterm.Thede-leveragingandriskassessmenttakingplaceamongthelargeinstitutionalbanksandtraditionalcreditproviders,aswellasthetemporarysuspensionofsecuritizedvehiclesasameansoffinancing,hasleftrealestateownerswithverylimitedoptionsforobtainingdebtfinancingforacquisitionsandrefinancings.Asaresult,thepricingofrealestatedebtcapitalhasincreaseddramaticallyandthetermsandstructureofrealestateloans,includingborrowerrecourse,havebecomemuchmorefavorableforlenders.Atthesametime,aspartofthisoverallde-leveraging,weexpectthatportfoliosofexistingloansanddebtinstrumentssecuredbycommercialrealestatewillcontinuetobeofferedforsalebybanksandotherinstitutionsatdiscountstoparvalueandinsomecaseswithrelativelyattractivesellerfinancing.Inaddition,manyownersofcommercialrealestatefacematuritiesonloansthathavebeensyndicatedorsecuritizedorboth,andmayhavedifficultyduetotheloanstructureandservicingstandards,inobtaininganextensionevenforperforming,stabilizedassets.

Q: Whatkindofofferingisthis? A: WeareprimarilyofferingthroughFundrise,LLC’sonlineinvestmentplatformwww.fundrise.com,ortheFundrisePlatform,a

maximumof$19,736,404inourcommonsharestothepublicona“bestefforts”basis.ThisofferingisbeingconductedasacontinuousofferingpursuanttoRule251(d)(3)ofRegulationA,meaningthatwhiletheofferingofsecuritiesiscontinuous,activesalesofsecuritiesmayhappensporadicallyoverthetermoftheoffering.Further,theacceptanceofsubscriptions,whetherviatheFundrisePlatformorotherwise,maybebrieflypausedattimestoallowustoeffectivelyandaccuratelyprocessandsettlesubscriptionsthathavebeenreceived.

Q: HowisaninvestmentinyourcommonsharesdifferentfrominvestinginsharesofalistedREIT? A: ThefundamentaldifferencebetweenourcommonsharesandalistedREITisthedailyliquidityavailablewithalisted

REIT.Althoughwehaveadoptedaredemptionplanthatgenerallyallowsinvestorstoredeemsharesonanongoingbasis,forinvestorswithashort-terminvestmenthorizon,alistedREITmaybeabetteralternativethaninvestinginourcommonshares.However,webelieveourcommonsharesareanalternativewayforinvestorstodeploycapitalintoadiversifiedpoolofrealestateassets,withalowercorrelationtothegeneralstockmarketthanlistedREITs.Inaddition,theoveralllisted-REITsectorhasbeentradingatall-timehighs,withtheFTSENAREITAllREITIndexyieldinggenerallylessthan5%fromJanuary1,2010toDecember31,2016.WebelievesuchpricingsuggeststhatasubstantialportionofthepriceoflistedREITsisattributabletoabuilt-inliquiditypremium,sincerecentunleveredcapitalizationratesonrealestatetransactionsintheprivatesectorhaveaveraged4-6%,accordingtothemostrecentpubliclyavailablereportpublishedbyCBREU.S.CapRateDatafromJanuary2017.Additionally,listedREITsaresubjecttomoredemandingpublicdisclosureandcorporategovernancerequirementsthanweare.WhilewearesubjecttothescaledreportingrequirementsofRegulationA,suchperiodicreportsaresubstantiallylessonerousthanwhatisrequiredofalistedREIT.

Q: Howisaninvestmentinyourcommonsharesdifferentfrominvestinginsharesofatraditionalnon-exchangetradedREIT? A: Weneitherchargenorpayanybroker-dealerdistributionfees,savinginvestorsapproximately70%to90%inupfrontexpensesas

comparedtoatraditionalnon-exchangetradedREIT.Traditionalnon-exchangetradedREITsuseahighlymanpower-intensivemethodwithhundredstothousandsofsalesbrokerscallingoninvestorstoselltheirofferings.Oursponsorhaspioneeredalowcostdigitalplatform,whichweintendtoleverageinconductingthisoffering,thusreducingthefinancialburdenstousofofferingourcommonshares.

Q: Howisaninvestmentinyourcommonsharesdifferentfrominvestinginsharesofotherrealestateinvestmentopportunities

offeredontheFundrisePlatformoronsimilaronlineinvestmentplatforms? A: Weareoneofthefewnon-exchangetradedREITsoffereddirectlytoallpotentialinvestorsprimarilyovertheinternet.Mostother

similaronlineinvestmentplatformsthatweareawareoftypicallyofferindividualpropertyinvestmentsasprivateplacementstoaccreditedinvestorsonly.Weintendtoownamorediversifiedportfolio,withcertaintaxadvantagesuniquetoREITs,thatisaccessibletobothaccreditedandnon-accreditedinvestorsatalowinvestmentminimum.

Q: Whatisthepurchasepriceforyourcommonshares? A: OurManagersetourinitialofferingpriceat$10.00pershare.AsofMarch31,2019,ourpersharepurchasepricecontinuedtobe

equalto$10.00pershare.Thepersharepurchasepriceinthisofferingwillbeadjustedatthebeginningofeveryfiscalquarter(orassoonascommerciallyreasonablethereafter),andwillbeequaltothegreaterof(i)$10.00pershareor(ii)ourNAVdividedbythenumberofsharesoutstandingasofthecloseofbusinessonthelastbusinessdayofthepriorfiscalquarter.OurManagerwilladjustourpersharepurchasepriceasofthedatethenewNAVisannounced,notthedateofsuchNAV,andinvestorswillpaythemostrecentpubliclyannouncedpurchasepriceasofthedateoftheirsubscription.Ourwebsite,www.fundrise.com,willidentifythecurrentNAVpershare.AnysubscriptionsthatwereceiveduringafiscalquarterwillbeexecutedatapriceequaltoourNAVpershareineffectforthatfiscalquarter.IfamaterialeventoccursinbetweenquarterlyupdatesofNAVthatwouldcauseourNAVpersharetochangeby5%ormorefromthelastdisclosedNAV,wewilldisclosetheupdatedpriceandthereasonforthechangeinanofferingcircularsupplementaspromptlyasreasonablypracticable,andwillupdatetheNAVinformationprovidedonourwebsite.See“DescriptionofOurCommonShares—QuarterlySharePriceAdjustments”formoredetails.

Q: HowwillyourNAVpersharebecalculated? A: OurNAVpershareiscalculatedattheendofeachfiscalquarterbyoursponsor'sinternalaccountantsusingaprocessthatreflects

severalcomponents,including(1)estimatedvaluesofeachofourcommercialrealestateassetsandinvestments,asdeterminedbysuchassetmanagementteam,includingrelatedliabilities,basedupon(a)marketcapitalizationrates,comparablesalesinformation,interestrates,netoperatingincome,(b)withrespecttodebt,defaultrates,discountratesandlossseverityrates,(c)forpropertiesthathavedevelopmentorvalueaddplans,progressalongsuchdevelopmentorvalueaddplan,and(d)incertaininstancesreportsoftheunderlyingrealestateprovidedbyanindependentvaluationexpert,(2)thepriceofliquidassetsforwhichthirdpartymarketquotesareavailable,(3)accrualsofperiodicdistributionsand(4)estimatedaccrualsofoperatingrevenuesandexpenses.Forjointventureordirectequityinvestments,oursponsorprimarilyreliesondiscountedcashflowmethod.Note,however,thatthedeterminationofourNAVisnotbasedon,norintendedtocomplywith,fairvaluestandardsunderGAAP,andourNAVmaynotbeindicativeofthepricethatwewouldreceiveforourassetsatcurrentmarketconditions.Ininstanceswhereanappraisaloftheunderlyingrealestateassetisnecessary,including,butnotlimitedto,instanceswhereourManagerisunsureofitsabilityonitsowntoaccuratelydeterminetheestimatedvaluesofourcommercialrealestateassetsandinvestments,orinstanceswherethirdpartymarketvaluesforcomparablepropertiesareeithernonexistentorextremelyinconsistent,wewillengageanappraiserthathasexpertiseinappraisingcommercialrealestateloansandassets,toactasourindependentvaluationexpert.Theindependentvaluationexpertisnotresponsiblefor,norprepares,ourquarterlyNAVpershare.See“DescriptionofOurCommonShares—ValuationPolicies”formoredetailsaboutourNAVandhowitwillbecalculated.

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Q: HowexactwillthecalculationofthequarterlyNAVpersharebe? A: Asthereisnomarketvalueforoursharesastheyarenotexpectedtobelistedortraded,ourgoalistoprovideareasonableestimate

ofthevalueofourcommonsharesasoftheendofeachfiscalquarter,withtheunderstandingthatourcommonsharesarenotlistedortradedonanystockexchangeorothermarketplace.Ourassetswillconsistprincipallyofcommercialrealestateloansandotherrealestateinvestments.Oursponsor’sinternalaccountants’valuationoftherealestateunderlyingtheseassetsissubjecttoanumberofjudgmentsandassumptionsthatmaynotprovetobeaccurate.Theuseofdifferentjudgmentsorassumptionswouldlikelyresultindifferentestimatesofthevalueoftherealestateunderlyingourassets.Moreover,althoughweevaluateandprovideourNAVpershareonaquarterlybasis,ourNAVpersharemayfluctuatedaily,sothattheNAVpershareineffectforanyfiscalquartermaynotreflectthepreciseamountthatmightbepaidforyoursharesinamarkettransaction.Further,ourpublishedNAVpersharemaynotfullyreflectcertainmaterialeventstotheextentthattheyarenotknownortheirfinancialimpactonourportfolioisnotimmediatelyquantifiable.AnyresultingpotentialdisparityinourNAVpersharemaybeinfavorofeithershareholderswhoredeemtheirshares,orshareholderswhobuynewshares,orexistingshareholders.Inaddition,thedeterminationofourNAVisnotbasedon,norintendedtocomplywith,fairvaluestandardsunderGAAP,andourNAVmaynotbeindicativeofthepricethatwewouldreceiveforourassetsatcurrentmarketconditions.See“DescriptionofOurCommonShares—ValuationPolicies”.

Q: WillIhavetheopportunitytoredeemmycommonshares? A: Yes.Whileyoushouldviewthisinvestmentaslong-term,wehaveadoptedaredemptionplanwhereby,onamonthlybasis,an

investormayobtainliquiditymonthly,followingaminimumsixty(60)daywaitingperiodaftersubmittingtheirredemptionrequest.OurManagerhasdesignedourredemptionplanwithaviewtowardsprovidinginvestorswithaninitialperiodinwhichtheycantodecidewhetheralong-terminvestmentinourCompanyisrightforthem.Inaddition,despitetheilliquidnatureoftheassetsexpectedtobeheldbytheCompany,theManagerbelievesitisbesttoprovidetheopportunityforongoingliquidityintheeventshareholdersneeditintheformofadiscountedredemptionpricepriortoyear5,whicheconomicbenefitindirectlyaccruestoshareholderswhohavenotrequestedredemption.NeithertheManagernoroursponsorreceivesanyeconomicbenefitasaresultofthediscountedredemptionpricethroughyear5.

Pursuanttoourredemptionplan,ashareholdermayonly(a)haveoneoutstandingredemptionrequestatanygiventimeand(b)requestthatweredeemuptothelesserof5,000sharesor$50,000pereachredemptionrequest.Inaddition,theredemptionplanissubjecttocertainliquiditylimitations,whichmayfluctuatedependingontheliquidityoftherealestateassetsheldbyus.Thecalculationoftheredemptionpricewilldepend,inpart,onwhetherashareholderrequestsredemptionwithinthefirsteighty-nine(89)daysoffirstacquiringtheshares(the“IntroductoryPeriod”)orthereafter(the“Post-IntroductoryPeriod”).DuringtheIntroductoryPeriod,thepershareredemptionpricewillbeequaltothepurchasepriceofthesharesbeingredeemedreducedby(i)theaggregatesumofdistributionspaidwithrespecttosuchshares,roundeddowntothenearestcentand(ii)theaggregatesumofdistributions,ifany,declaredbutunpaidonthesharessubjecttotheredemptionrequest.Inotherwords,ashareholderwouldreceivebacktheiroriginalinvestmentamount,fromtheredemptionpricepaid,priordistributionsreceivedanddistributionsthathavebeendeclared(andthatwillbereceivedwhenpaid),butwouldnotreceiveanyamountsinexcessoftheiroriginalinvestmentamount.DuringthePost-IntroductoryPeriod,thepershareredemptionpricewillbecalculatedbasedonadecliningdiscounttothepersharepriceforourcommonsharesineffectatthetimeoftheredemptionrequest,androundeddowntothenearestcent.Inaddition,theredemptionplanissubjecttocertainliquiditylimitations,whichmayfluctuatedependingontheliquidityoftherealestateassetsheldbyus.DuringthePost-IntroductoryPeriod,theredemptionpricewithrespecttothecommonsharesthataresubjecttotheredemptionrequestwillnotbereducedbytheaggregatesumofdistributions,ifany,thathavebeen(i)paidwithrespecttosuchsharespriortothedateoftheredemptionrequestor(ii)declaredbutunpaidonsuchshareswithrecorddatesduringtheperiodbetweentheredemptionrequestdateandtheredemptiondate

HoldingPeriodfromDateofSettlement

EffectiveRedemptionPrice(aspercentageofpershare

redemptionprice)(1) Lessthan90days(IntroductoryPeriod) 100.0%(2)(3)90daysuntil3years 97.0%(4)3yearsto4years 98.0%(5)4yearsto5years 99.0%(6)Morethan5years 100.0%(7)

(1) TheEffectiveRedemptionPricewillberoundeddowntothenearest$0.01.(2) ThepershareredemptionpriceduringtheIntroductoryPeriodiscalculatedbaseduponthepurchasepriceoftheshares,

notthepersharepriceineffectatthetimeoftheredemptionrequest.(3) TheEffectiveRedemptionPriceduringtheIntroductoryPeriodwillbereducedbytheaggregatesumofdistributionspaid

orpayableonsuchshares,theamountofwhichweareunabletocalculateatthistime.(4) Forsharesheldatleastninety(90)daysbutlessthanthree(3)years,theEffectiveRedemptionPriceincludesthefixed3%

discounttothepersharepriceforourcommonsharesineffectatthetimeoftheredemptionrequest.(5) Forsharesheldatleastthree(3)yearsbutlessthanfour(4)years,theEffectiveRedemptionPriceincludesthefixed2%

discounttothepersharepriceforourcommonsharesineffectatthetimeoftheredemptionrequest.(6) Forsharesheldatleastfour(4)yearsbutlessthanfive(5)years,theEffectiveRedemptionPriceincludesthefixed1%

discounttothepersharepriceforourcommonsharesineffectatthetimeoftheredemptionrequest.(7) Forsharesheldatleastfive(5)years,theEffectiveRedemptionPricedoesnotincludeanydiscounttothepershareprice

forourcommonsharesineffectatthetimeoftheredemptionrequest. Asshareholdersmustobserveaminimumsixty(60)daywaitingperiodfollowingaredemptionrequestbeforesuchrequestwillbe

honored,whetheraredemptionrequestisdeemedtobeintheIntroductoryPeriodorthePost-IntroductoryPeriodwillbedeterminedasofthedatetheredemptionrequestismade,notthedatetheredemptionrequestishonored.Meaning,forexample,ifaredemptionrequestissubmittedduringtheIntroductoryPeriod,buthonoredaftertheIntroductoryPeriod,theeffectiveredemptionpricewillbedeterminedusingtheIntroductoryPeriodmethodology.Furthermore,anyshareholderrequestingredemptionwillberesponsibleforanythird-partycostsincurredineffectingsuchredemption,includingbutnotlimitedto,banktransactioncharges,custodyfees,and/ortransferagentcharges.Theredemptionplanmaybechangedorsuspendedatanytimewithoutnotice.See“DescriptionofOurCommonShares—RedemptionPlan”formoredetails.

Q: Whatisthenumberandpercentageofcommonsharesthathavebeensubmittedforredemptionandredeemed,

respectively? A: AsofDecember31,2018,approximately682,000commonshareshavebeensubmittedforredemptionand100%ofsuch

redemptionrequestshavebeenhonored. Q: Arethereanylimitsonmyabilitytoredeemmyshares? A: Yes.Whilewedesignedourredemptionplantoallowshareholderstorequestredemptionsonamonthlybasis,weneedtoimpose

limitationsonthesizeofindividualredemptionrequestsandthetotalamountofnetredemptionspercalendarquarterinordertomaintainsufficientsourcesofliquiditytosatisfyredemptionrequestswithoutimpactingourabilitytoinvestincommercialrealestateassetsandmaximizeinvestorreturns.

Inaddition,intheeventourManagerdetermines,initssolediscretion,thatwedonothavesufficientfundsavailabletoredeemallofthecommonsharesforwhichredemptionrequestshavebeensubmittedduringanygivenmonth,suchpendingrequestswillbehonoredonapro-ratabasis,ifatall.Intheeventthatnotallredemptionsarebeinghonoredinagivenmonth,theredemptionrequestsnotfullyhonoredwillhavetheremainingamountofsuchredemptionrequestsconsideredduringthenextmonthinwhichredemptionsarebeinghonored.Accordingly,allunsatisfiedredemptionrequestswillbetreatedasrequestsforredemptiononthenextdateonwhichredemptionsarebeinghonored,withredemptionsprocessedonapro-ratabasis,ifatall.Iffundsavailablefortheredemptionplanarenotsufficienttoaccommodateallredemptionrequestsonsuchfutureredemptiondate,commonshareswillberedeemedonapro-ratabasis,ifatall.Weintendtolimitshareholderstoone(1)redemptionrequestoutstandingatanygiventime,meaningthat,ifacommonshareholderdesirestorequestmoreorlesssharesberedeemed,suchcommonshareholdermustfirstwithdrawthefirstredemptionrequest,whichmayaffectwhethertherequestisconsideredinthe“IntroductoryPeriod”or“Post-IntroductoryPeriod”.Forinvestorswhoholdcommonshareswithmorethanonerecorddate,redemptionrequestswillbeappliedtosuchcommonsharesintheorderinwhichtheysettled,onalastinfirstoutbasis–meaning,thosecommonsharesthathavebeencontinuouslyheldfortheshortestamountoftimewillberedeemedfirst.Inaddition,weintendlimitindividualredemptionrequeststothelesserof5,000sharesor$50,000pereachredemptionrequest,whichmayaffectwhethertheentiretyofaredemptionrequestwillbeconsideredtobeinthe“IntroductoryPeriod”or“Post-IntroductoryPeriod”.InaccordancewiththeSEC’scurrentguidanceonredemptionplans,weintendtolimitredemptionsinanycalendarmonthtoshareswhoseaggregatevalue(basedontherepurchasepricepershareineffectasoftheredemptiondate)islessthanorequalto0.5%of

theNAVofallofouroutstandingsharesasofthefirstdayofsuchcalendarmonth,andintendtolimittheamountredeemedinanycalendarquartertoshareswhoseaggregatevalue(basedontherepurchasepricepershareineffectasoftheredemptiondate)is1.25%oftheNAVofallofouroutstandingsharesasoffirstdayofthelastmonthofsuchcalendarquarter(e.g.,March1,June1,September1,orDecember1),withexcesscapacitycarriedovertolatercalendarquartersinthatcalendaryear.However,asweintendtomakeanumberofcommercialrealestateinvestmentsofvaryingtermsandmaturities,ourManagermayelecttoincreaseordecreasetheamountofcommonsharesavailableforredemptioninanygivenmonthorquarter,asthesecommercialrealestateassetsarepaidofforsold,butwedonotintendtoredeemmorethan5.00%ofthecommonsharesoutstandingduringanycalendaryear.Notwithstandingtheforegoing,wearenotobligatedtoredeemcommonsharesundertheredemptionplan.Further,ourManagermayinitssolediscretion,amend,suspend,orterminatetheredemptionplanatanytimewithoutpriornotice,includingtoprotectouroperationsandournon-redeemedshareholders,topreventanundueburdenonourliquidity,topreserveourstatusasaREIT,followinganymaterialdecreaseinourNAV,orforanyotherreason.However,intheeventthatweamend,suspendorterminateourredemptionplan,wewillfileanofferingcircularsupplementand/orForm1-U,asappropriate,andpostsuchinformationontheFundrisePlatformtodisclosesuchamendment.OurManagermayalso,initssolediscretion,declineanyparticularredemptionrequestifitbelievessuchactionisnecessarytopreserveourstatusasaREIT.See“DescriptionofOurCommonShares—RedemptionPlan”formoredetails.

Q: WillIstillbeentitledtodistributionsafterIsubmitarequestforredemption? A: Yes.Youwillcontinuetoreceivedistributionswithrespecttothecommonsharesthataresubjecttoaredemptionrequestbetween

thetimeyoumakesuchredemptionrequestandtheeffectivedateoftheredemption.However,ifyouredeemyoursharesduringtheIntroductoryPeriod,thosedistributionswillbecreditedagainsttheredemptionpriceotherwisepayabletoyousuchthatyourredemptionpricewillbenogreaterthanyouroriginalinvestment.

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Q: WillIbechargedupfrontsellingcommissions? A: No.Investorswillnotpayupfrontsellingcommissionsaspartofthepricepercommonsharepurchasedinthisoffering.

Additionally,thereisnodealermanagerfeeorotherservice-relatedfeeinconnectionwiththeofferingandsaleofourcommonsharesthroughtheFundrisePlatform.

Q: Whowillpayyourorganizationandofferingcosts? A: OurManageroritsaffiliateshavepaidandwillcontinuetopayonourbehalfallcostsincurredinconnectionwithourorganization

andtheofferingofourshares.See“EstimatedUseofProceeds”formoreinformationaboutthetypesofcoststhatmaybeincurred,includingthoseexpensesdescribedinthenextparagraph.Followingthecompletionofourinitialoffering,webegantoreimburseourManager,withoutinterest,fortheseorganizationandofferingcostsincurredbothbeforeandaftersuchdate.Reimbursementpaymentswillbemadeinmonthlyinstallments,buttheaggregatemonthlyamountreimbursedcanneverexceed0.50%oftheaggregategrossofferingproceedsfromthisandourofferings.Ifthesumofthetotalunreimbursedamountofsuchorganizationandofferingcosts,plusnewcostsincurredsincethelastreimbursementpayment,exceedsthereimbursementlimitdescribedabovefortheapplicablemonthlyinstallment,theexcesswillbeeligibleforreimbursementinsubsequentmonths(subjecttothe0.50%limit),calculatedonanaccumulatedbasis,untilourManagerhasbeenreimbursedinfull.AsofDecember31,2018,approximately$1,006,000inorganizationalandofferingcostshavebeenincurredbyandreimbursedtoourManagerinconnectionwithourpriorofferings.

Q: WhatfeesandexpensesdoyoupaytotheManageroranyofitsaffiliates? A: WepayourManageraquarterlyassetmanagementfeecurrentlyequaltoanannualizedrateof0.85%basedonourNAVattheend

ofeachpriorquarter.ThisrateisdeterminedbyourManagerinitssolediscretion,butcannotexceedanannualizedrateof1.00%.Theamountoftheassetmanagementfeemayvaryfromtimetotime,andwewillpubliclyreportanychangesintheassetmanagementfee.OurManager,oranaffiliateofourManager,isentitledtoreimbursementforcostsincurredinconnectionwiththespecialservicingofanynon-performingasset,aswellasoriginationfeesthataregenerallypaidbythejoint-venture,borrowersorco-investors.

WereimburseourManagerfortheorganizationandofferingexpensesthattheManagerhaspaidorwillpayonourbehalf.WewillalsoreimburseourManagerforout-of-pocketexpensesinconnectionwiththeoriginationofourcommercialrealestateloansandotherreal-estaterelatedinvestments,totheextentnotreimbursedbytheborrower.Additionally,wereimburseourManagerforout-of-pocketexpensespaidtothirdpartiesinconnectionwithprovidingservicestous.ThisdoesnotincludetheManager’soverhead,employeecostsbornebytheManager,utilitiesortechnologycosts.TheexpensereimbursementsthatwewillpaytoourManagerincludeexpensesincurredbyoursponsorintheperformanceofservicesunderthesharedservicesagreementbetweenourManagerandoursponsor.See“Management—SharedServicesAgreement”.

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Thepaymentbyusoffeesandexpenseswillreducethecashavailableforinvestmentanddistributionandwilldirectlyimpactour

quarterlyNAV.See“ManagementCompensation”formoredetailsregardingthefeesthatwillbepaidtoourManageranditsaffiliates.

Q: Willyouuseleverage? A: Yes,wemayuseleverage,althoughasofDecember31,2018,wehadnotutilizedanyleverageinmakingourinvestments.Our

targetportfolio-wideleverageisbetween50-85%ofthegreaterofcost(beforedeductingdepreciationorothernon-cashreserves)orfairmarketvalueofourassets.Duringtheperiodwhenweareacquiringourinitialportfolio,wemayemploygreaterleverageonindividualassets(thatwillalsoresultingreaterleverageoftheinitialportfolio)inordertoquicklybuildadiversifiedportfolioofassets.Pleasesee“InvestmentObjectivesandStrategy”formoredetails.

Q: HowoftenwillIreceivedistributions? A: WeexpectthatourManagerwilldeclareandpaydistributionsquarterlyinarrears;however,ourManagermaydeclareother

periodicdistributionsascircumstancesdictate.AnydistributionswemakewillbeatthediscretionofourManager,andwillbebasedon,amongotherfactors,ourpresentandreasonablyprojectedfuturecashflow.WeexpectthattheManagerwillsettherateofdistributionsatalevelthatwillbereasonablyconsistentandsustainableovertime,whichwillbefullydependentontheyieldsgeneratedbyourassetsandmaybesubstantiallylessthanthedistributionratethatwaspayablewhilethedistributionsupportcommitmentwasineffect.Inaddition,theManager’sdiscretionastothepaymentofdistributionswillbelimitedbytheREITdistributionrequirements,whichgenerallyrequirethatwemakeaggregateannualdistributionstoourshareholdersofatleast90%ofourREITtaxableincome,computedwithoutregardtothedividendspaiddeductionandexcludingnetcapitalgain.Moreover,evenifwemaketherequiredminimumdistributionsundertheREITrules,wewillbesubjecttoU.S.federalincomeandexcisetaxesonourundistributedtaxableincomeandgains.Asaresult,theManagerintendstomakeadditionaldistributions,beyondtheminimumREITdistribution,toavoidsuchtaxes.See“DescriptionofOurCommonShares—Distributions”and“U.S.FederalIncomeTaxConsiderations”.

AnydistributionsthatwemakewilldirectlyimpactourNAV,byreducingtheamountofourassets.Ourgoalistoprovidea

reasonablypredictableandstablelevelofcurrentincome,throughquarterlydistributions,whileatthesametimemaintainingafairlevelofconsistencyinourNAV.Overthecourseofyourinvestment,yourdistributionsplusthechangeinNAVpershare(eitherpositiveornegative)willproduceyourtotalreturn.

Q: Whatwillbethesourceofyourdistributions? A: Wemaypaydistributionsfromsourcesotherthancashflowfromoperations,includingfromtheproceedsofthisoffering,the

privateplacementstooursponsorandFundrise,LP,ortheadditionalcommonsharessoldtoanaffiliateofoursponsorpursuanttothedistributionsupportagreement(see“Q:Whatcompetitiveadvantagesdoweachievethroughourrelationshipwithoursponsor–DistributionSupportCommitment”above),interestordividendincomereceivedfromourinvestments,principalrepaymentoftheloansthatwemake,redemptionand/orredemptionpremiumsofinvestmentsincommercialrealestatethroughmajority-ownedsubsidiarieswithrightstoreceivepreferredeconomicreturns,thesaleofinvestmentsorloanproceeds,amongothers,andwehavenolimitontheamountswemaypayfromsuchsources.

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Q: WillthedistributionsIreceivebetaxableasordinaryincome? A: Unlessyourinvestmentisheldinaqualifiedtax-exemptaccountorwedesignatecertaindistributionsascapitalgaindividends,

distributionsthatyoureceivegenerallywillbetaxedasordinaryincometotheextenttheyarefromcurrentoraccumulatedearningsandprofits.However,fortaxableyearsbeginningafterDecember31,2017andbeforeJanuary1,2026,andsubjecttocertainlimitations,pursuanttotherecentlyenactedH.R.1,knownastheTaxCutsandJobsAct,ortheTCJA,non-corporatetaxpayersaregenerallyeligibleforadeductionofupto20%(subjecttocertainlimitations)onmostordinaryREITdividendsandcertaintradeorbusinessincomeofnon-corporatetaxpayers.TheportionofyourdistributioninexcessofcurrentandaccumulatedearningsandprofitsisconsideredareturnofcapitalforU.S.federalincometaxpurposesandwillreducethetaxbasisofyourinvestment,ratherthanresultincurrenttax,untilyourbasisisreducedtozero.ReturnofcapitaldistributionsmadetoyouinexcessofyourtaxbasisinourcommonshareswillbetreatedassalesproceedsfromthesaleofourcommonsharesforU.S.federalincometaxpurposes.Distributionswedesignateascapitalgaindividendsaregenerallytaxableatlong-termcapitalgainsratesforU.S.federalincometaxpurposes.However,becauseeachinvestor’staxconsiderationsaredifferent,werecommendthatyouconsultwithyourtaxadvisor.Youalsoshouldreviewthesectionofthisofferingcircularentitled“U.S.FederalIncomeTaxConsiderations”,includingforadiscussionofthespecialrulesapplicabletodistributionsinredemptionofsharesandliquidatingdistributions.

Q: MayIreinvestmycashdistributionsinadditionalshares? A: Yes.Whilewehavenotadoptedadistributionreinvestmentplanwherebyinvestorsmayelecttohavetheircashdistributions

automaticallyreinvestedinadditionalcommonshares,solongasthisofferingremainsongoing,youmaychoosetousetheproceedsofanydistributiontopurchaseadditionalshareshereundereitherdirectlyorthroughaprogramestablishedbyourManager.Thecurrentpurchasepriceforsuchsharesis$10.00.Thepersharepurchasepriceinthisofferingwillbeadjustedatthebeginningofeveryfiscalquarter(orassoonascommerciallyreasonablethereafter),andwillbeequaltothegreaterof(i)$10.00pershareor(ii)ourNAVdividedbythenumberofsharesoutstandingasofthecloseofbusinessonthelastbusinessdayofthepriorfiscalquarter.OurManagerwilladjustourpersharepurchasepriceasofthedatethenewNAVisannounced,notthedateofsuchNAV,andinvestorswillpaythemostrecentpubliclyannouncedpurchasepriceasofthedateoftheirsubscription.Note,however,thatundertherulesapplicabletousunderRegulationA,weareonlypermittedtopubliclyofferupto$50,000,000ofourcommonsharesinanytwelve-monthperiod.

Q: Whomightbenefitfromaninvestmentinyourshares? A: Aninvestmentinoursharesmaybebeneficialforyouifyouseektodiversifyyourpersonalportfoliowithapubliccommercialreal

estateinvestmentvehiclefocusedprimarilyoncommercialrealestateloans,investmentsincommercialrealestateandotherselectrealestate-relatedassets,seektoreceivecurrentincome,seektopreservecapitalandareabletoholdyourinvestmentforatimeperiodconsistentwithourliquiditystrategy.Ontheotherhand,wecautionpersonswhorequireimmediateliquidityorguaranteedincome,orwhoseekashort-terminvestment,thataninvestmentinourshareswillnotmeetthoseneeds.

Q: Arethereanyrisksinvolvedinbuyingyourshares? A: Investinginourcommonsharesinvolvesahighdegreeofrisk.Ifweareunabletoeffectivelymanagetheimpactoftheserisks,we

maynotmeetourinvestmentobjectives,andtherefore,youshouldpurchasethesesecuritiesonlyifyoucanaffordacompletelossofyourinvestment.See“RiskFactors”foradescriptionoftherisksrelatingtothisofferingandaninvestmentinourshares.

Q: Howdoesa“bestefforts”offeringwork? A: Whencommonsharesareofferedtothepublicona“bestefforts”basis,weareonlyrequiredtouseourbesteffortstosellour

commonshares.Neitheroursponsor,Managernoranyotherpartyhasafirmcommitmentorobligationtopurchaseanyofourcommonshares.

Q: Whocanbuyshares? A: Generally,youmaypurchasesharesifyouarea“qualifiedpurchaser”(asdefinedinRegulationA).“Qualifiedpurchasers”include: ·“accreditedinvestors”underRule501(a)ofRegulationD;and

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·allotherinvestorssolongastheirinvestmentinourcommonsharesdoesnotrepresentmorethan10%ofthegreateroftheir

annualincomeornetworth(fornaturalpersons),or10%ofthegreaterofannualrevenueornetassetsatfiscalyear-end(fornon-naturalpersons).

However,ourcommonsharesarebeingofferedandsoldonlytothoseinvestorsthatarewithinthelattercategory(i.e.,investors

whoseinvestmentinourcommonsharesdoesnotrepresentmorethan10%oftheapplicableamount),regardlessofaninvestor’sstatusasan“accreditedinvestor”.

Networthinallcasesshouldbecalculatedexcludingthevalueofaninvestor’shome,homefurnishingsandautomobiles.We

reservetherighttorejectanyinvestor’ssubscriptioninwholeorinpartforanyreason,includingifwedetermineinoursoleandabsolutediscretionthatsuchinvestorisnota“qualifiedpurchaser”forpurposesofRegulationA.Pleaserefertothesectionaboveentitled“StateLawExemptionandPurchaseRestrictions”formoreinformation.

Q: HowdoIbuyshares? A: Youmaypurchaseourcommonsharesinthisofferingbycreatinganewaccount,orloggingintoyourexistingaccount,atthe

FundrisePlatform.YouwillneedtofilloutasubscriptionagreementliketheoneattachedtothisofferingcircularasAppendixAforacertaininvestmentamountandpayforthesharesatthetimeyousubscribe.

Q: Isthereanyminimuminvestmentrequired? A: Yes.Ifyouareafirsttimeinvestorinourcommonshares,youmustinitiallypurchaseatleast100sharesinthisoffering,or$1,000

basedonthecurrentpershareprice.Thereisnominimuminvestmentrequirementonadditionalpurchasesafteryouhavepurchasedaminimumof100shares.However,incertaininstances,wemayrevisetheminimumpurchaserequirementsinthefutureorelecttowaivetheminimumpurchaserequirement,suchasforindividualswhoparticipateindifferentplansestablishedbyourManagerthroughwhichtheycaninvestinourcommonshares.Inaddition,inordertohelpprotectusfromtheriskofchargebacks,weintendtorequirethatanysubscriptioninexcessof$125,000ofoursharesbefundedthroughabankwiretransferandnotanACHelectronicfundtransfer.

Q: MayImakeaninvestmentthroughmyIRAorothertax-deferredretirementaccount? A: Generally,yes.WecurrentlyacceptinvestmentsthroughIRAsmaintainedwithcertaincustodians,althoughweintendtolimitthe

amountofIRAinvestmentstolessthan25percentofourshares.However,IRAsorothertax-deferredretirementaccountsthatinvestinoursharesgenerallyaresubjecttotaxonallorasignificantportionoftheirshareofourprofitsas“unrelatedbusinesstaxableincome”undertheCode.

Q: Whatwillyoudowiththeproceedsfromyouroffering? A: Wehaveused,andintendtocontinuetouse,substantiallyallofthenetproceedsfromthisoffering(afterpayingorreimbursing

offeringexpenses)tocontinuetoinvestinandmanageadiverseportfolioofcommercialrealestateloansandinvestmentsincommercialrealestateandotherselectrealestate-relatedassets.WeexpectthatanyexpensesorfeespayabletoourManagerforitsservicesinconnectionwithmanagingourdailyaffairs,includingbutnotlimitedto,theselectionandacquisitionororiginationofourinvestments,willbepaidfromcashflowfromoperations.Ifsuchfeesandexpensesarenotpaidfromcashflow(orwaived)theywillreducethecashavailableforinvestmentanddistributionandwilldirectlyimpactourquarterlyNAV.See“ManagementCompensation”formoredetailsregardingthefeesthatarepaidtoourManageranditsaffiliates.

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Wemaynotbeabletopromptlyinvestthenetproceedsofthisofferingincommercialrealestateloans,investmentsincommercial

realestateandotherselectrealestate-relatedassets.Intheinterim,wemayinvestinshort-term,highlyliquidorotherauthorizedinvestments.Suchshort-terminvestmentswillnotearnashighofareturnasweexpecttoearnonourrealestate-relatedinvestments.

Q: Howlongwillthisofferinglast? A: Wecurrentlyexpectthatthisofferingwillremainopenforinvestorsuntilweraisethemaximumamountbeingoffered,unless

terminatedbyusatanearliertime.Wereservetherighttoterminatethisofferingforanyreasonatanytime. Q: WillIbenotifiedofhowmyinvestmentisdoing? A: Yes,wewillprovideyouwithperiodicupdatesontheperformanceofyourinvestmentinus,including: ·anannualreport; ·asemi-annualreport; ·currenteventreportsforspecifiedmaterialeventswithinfourbusinessdaysoftheiroccurrence; · supplementstotheofferingcircular,ifwehavematerialinformationtodisclosetoyou;and ·otherreportsthatwemayfileorfurnishtotheSECfromtimetotime. WewillprovidethisinformationtoyoubypostingsuchinformationontheSEC’swebsiteatwww.sec.gov,ontheFundrise

Platformatwww.fundrise.com,orviae-mail. Q: WhenwillIgetmydetailedtaxinformation? A: YourIRSForm1099-DIVtaxinformation,ifrequired,willbeprovidedbyJanuary31oftheyearfollowingeachtaxableyear. Q: Whocanhelpanswermyquestionsabouttheoffering? A: Ifyouhavemorequestionsabouttheoffering,orifyouwouldlikeadditionalcopiesofthisofferingcircular,youshouldcontactus

byemailatinvestments@fundrise.comorbymailat:

FundriseRealEstateInvestmentTrust,LLC11DupontCircleNW,9thFL

Washington,DC20036Attn:InvestorRelations

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OFFERINGSUMMARY

Thisofferingsummaryhighlightsmaterialinformationregardingourbusinessandthisofferingthatisnototherwiseaddressed

inthe“QuestionsandAnswersAboutthisOffering”sectionofthisofferingcircular.Becauseitisasummary,itmaynotcontainalloftheinformationthatisimportanttoyou.Tounderstandthisofferingfully,youshouldreadtheentireofferingcircularcarefully,includingthe“RiskFactors”sectionbeforemakingadecisiontoinvestinourcommonshares.

FundriseRealEstateInvestmentTrust,LLC

FundriseRealEstateInvestmentTrust,LLCisaDelawarelimitedliabilitycompanyformedtoinvestinandmanagea

diversifiedportfolioofcommercialrealestateloansandinvestmentsincommercialrealestate.Wemayalsoinvestincommercialrealestate-relateddebtsecurities,andotherrealestate-relatedassets.WeintendtocontinuetooperateinamannerthatwillallowustoqualifyasaREITforU.S.federalincometaxpurposes.Amongotherrequirements,REITsarerequiredtodistributetoshareholdersatleast90%oftheirannualREITtaxableincome(computedwithoutregardtothedividendspaiddeductionandexcludingnetcapitalgain).

Ourofficeislocatedat11DupontCircleNW,9thFL,Washington,DC20036.Ourtelephonenumberis(202)584-0550.

InformationregardingourCompanyisalsoavailableonourwebsiteatwww.fundrise.com.

RecentDevelopments

CapitalRaisedThroughMay27,2019,ourongoingofferinghasraisedanaggregateofapproximately$116.4millionincapitalpursuantto

RegulationA(notincludingtheapproximate$1.2millionreceivedinprivateplacementstooursponsor,RiseCompaniesCorp.,andFundrise,LP,anaffiliateofoursponsor,andthedistributionsupportcommitment).Inthe12-monthperiodpriortoMay27,2019,wehadsettledsubscriptionsforapproximately$30,263,596.Wearecontinuingtoofferupto$19,736,404inourcommonshares,whichrepresentsthevalueofthesharesavailabletobeofferedasofMay27,2019outoftherolling12-monthmaximumofferingamountof$50millioninourcommonshares.

AssetsAcquiredSee“PlanofOperation—OurInvestments”foradetailedsummaryofourassets.DistributionsPaidThroughMay27,2019,wehavedeclaredanaggregateof26distributionssinceourinceptionwithanaverageannualizedyield

of9.04%.See“DescriptionofOurCommonShares—Distributions”below.Duringfiscalyear2018,ourdistributionswerefundedfrombothcashflowfromourrealestateinvestments.Whileweareundernoobligationtodoso,weexpectthatourManagerwillcontinuetodeclaredistributionswithadailyrecorddate,andpaydistributionsquarterlyinarrearsinamountssimilartothosepreviouslydeclared.However,therecanbenoassuranceastowhetherdistributionswillbedeclaredortheamountofsuchdistributions.

NetAssetValueasofMarch31,2019AsofMarch31,2019,ourNAVpercommonshareis$9.96.ThisNAVpercommonsharewillbeeffectiveuntilupdatedbyus

onoraboutJune30,2019(orassoonascommerciallyreasonablethereafter),unlessupdatedbyuspriortothattime.ShareRedemptionPlanStatusDuringthequarterendedMarch31,2019,weredeemedapproximately141,300commonsharespursuanttoourshare

redemptionplan.

InvestmentStrategyWehaveused,andcontinuetoexpecttousesubstantiallyallofthenetproceedsfromourofferingstooriginate,acquireand

structurecommercialrealestateloans(includingseniormortgageloans,subordinatedmortgageloans(alsoreferredtoasB-Notes),mezzanineloans,andparticipationsinsuchloans)andinvestmentsincommercialrealestate(throughmajority-ownedsubsidiarieswith

rightstoreceivepreferredeconomicreturns).Wemayalsoinvestincommercialrealestate-relateddebtsecurities(includingCMBS,CDOsandREITseniorunsecureddebt),jointventures,andotherrealestate-relatedassets.

Weseektocreateandmaintainaportfolioofinvestmentsthatgeneratealowvolatilityincomestreamofattractiveand

consistentcashdistributions.Ourfocusoninvestingindebtinstrumentsemphasizesthepaymentofcurrentreturnstoinvestorsandpreservationofinvestedcapitalasourprimaryinvestmentobjectives,withalesseremphasisonseekingcapitalappreciationfromourinvestments,asistypicallythecasewithmoreopportunisticorequity-orientedstrategies.

OurManagerexpectstocontinuetodirectlystructure,underwriteandoriginatemanyofthedebtproductsinwhichweinvest

asthisprovidesforthebestopportunitytomanageourborrowerandpartnerrelationshipsandoptimizethetermsofourinvestments.Ourprovenunderwritingprocess,whichourmanagementteamhassuccessfullydevelopedovertheirextensiverealestatecareersinavarietyofmarketconditionsandimplementedatoursponsor,involvescomprehensivefinancial,structural,operationalandlegalduediligenceofourborrowersandpartnersinordertooptimizepricingandstructuringandmitigaterisk.

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InvestmentObjectives

Ourprimaryinvestmentobjectivesare:

· topayattractiveandconsistentcashdistributions;and

· topreserve,protectandreturnyourcapitalcontribution.Wealsoseektorealizegrowthinthevalueofourinvestmentsbytimingtheirsaletomaximizevalue.However,thereisno

assurancethatourinvestmentobjectiveswillbemet.

MarketOpportunitiesWebelievethatthenearandintermediate-termmarketforinvestmentincommercialrealestateloans,commercialrealestate

andotherrealestate-relatedassetsiscompellingfromarisk-returnperspective.Giventheprospectoflowgrowthfortheeconomy,wefavorastrategyweightedtowardtargetingseniorandmezzaninedebtwhichmaximizecurrentincome,withsignificantsubordinatecapitalanddownsidestructuralprotections.Incontrast,returnstypicallyassociatedwithpureequitystrategiesaremostly“back-ended”andaredependentonassetappreciation,capitalizationratecompression,cashflowgrowth,aggressiverefinancingand/orsaleoftheunderlyingproperty.WebelievethatourinvestmentstrategycombinedwiththeexperienceandexpertiseofourManager’smanagementteamprovideopportunitiestooriginateinvestmentswithattractivecurrentandaccruedreturnsandstrongstructuralfeaturesdirectlywithrealestatecompanies,therebytakingadvantageofchangingmarketconditionsinordertoseekthebestrisk-returndynamicforourshareholders.

OurManager

FundriseAdvisors,LLC,ourManager,managesourday-to-dayoperations.OurManagerisaninvestmentadviserregistered

withtheSECandawholly-ownedsubsidiaryofoursponsor.RegistrationwiththeSECdoesnotimplyacertainlevelofskillortraining.Ateamofrealestateanddebtfinanceprofessionals,actingthroughourManager,makesallofthedecisionsregardingtheselection,negotiation,financinganddispositionofourinvestments,subjecttothelimitationsinouroperatingagreement.OurManageralsoprovidesassetmanagement,marketing,investorrelationsandotheradministrativeservicesonourbehalfwiththegoalofmaximizingouroperatingcashflowandpreservingourinvestedcapital.RiseCompaniesCorp.,oursponsor,isabletoexercisesignificantcontroloverourbusiness.

AbouttheFundrisePlatform

WearealsoanaffiliateofFundrise,LLC,theownerandoperatorofanonlinefinancialplatformfocusedonrealestate,which

maybefoundonthewebsite:www.fundrise.com(the“FundrisePlatform”).Fundrise,LLCisawholly-ownedsubsidiaryofRiseCompaniesCorp.,oursponsor.

BenjaminS.Milleristheco-founderandChiefExecutiveOfficerofRiseCompaniesCorp.,oursponsor.Mr.BenjaminS.

Millerisresponsibleforoverseeingtheday-to-dayoperationsofRiseCompaniesCorp.anditsaffiliates,includingFundrise,LLC.

OurStructureThechartbelowshowstherelationshipamongvariousRiseCompaniesCorp.affiliatesandourCompanyasofthedateofthis

offeringcircular.

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*Asweraisesufficientofferingproceedstoacquireinvestments,(i)wemayobtainarelatedpartyloanfrom,orissueaparticipationinterestto,FundriseLendingoritsaffiliates,or(ii)FundriseLendingoritsaffiliatesmayacquiresuchinvestmentsandsellthemtousatalatertime.See“PlanofOperation–RelatedPartyLoansandWarehousingofAssets”.

**Pursuanttoouroperatingagreement,theManagerreceivesanassetmanagementfeeandreimbursementofspecialservicingexpenses.See“ManagementCompensation”.

ManagementCompensation

OurManageranditsaffiliatesreceivefeesandexpensereimbursementsforservicesrelatingtoourofferings,andthe

investmentandmanagementofourassets.Theitemsofcompensationaresummarizedinthefollowingtable.NeitherourManagernoritsaffiliatesreceiveanysellingcommissionsordealermanagerfeesinconnectionwiththeofferandsaleofourcommonshares.See“ManagementCompensation”foramoredetailedexplanationofthefeesandexpensespayabletoourManageranditsaffiliates.

FormofCompensationandRecipient DeterminationofAmount EstimatedAmount OfferingStage ReimbursementofOfferingExpenses—Manager

OurManagerhaspaidandwillcontinuetopayofferingexpensesonourbehalfinconnectionwiththeofferingofourshares.WereimburseourManagerforthesecostsandfutureofferingcostsitmayincuronourbehalf.

OurorganizationandofferingexpensesreimbursedtoourManagerasofDecember31,2018wereapproximately$1,006,000andweexpecttoincuranadditional$45,000inexpensesinconnectionwiththecontinuationofthisoffering.

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AcquisitionandDevelopmentStage Acquisition/OriginationFee—ManageroritsAffiliate

Theco-investor,jointventureorborrowerpaysupto2.0%oftheamountfundedbyoursponsororaffiliatesofoursponsortoacquireororiginatecommercialrealestateloansortheamountinvestedinthecaseofotherrealestateinvestments,excludinganyacquisitionandoriginationexpensesandanydebtattributabletosuchinvestments.Wearenotentitledtothisfee.

Paidbytheco-investors,joint-ventureorborroweratclosing.

Actualamountsaredependentuponthetotalequityanddebtcapitalweraise;wecannotdeterminetheseamountsatthepresenttime.

ReimbursementofAcquisition/OriginationExpenses—Manager

WereimburseourManagerforactualexpensesincurredinconnectionwiththeselection,acquisitionororiginationofaninvestment,totheextentnotreimbursedbytheborrower,whetherornotweultimatelyacquireororiginatetheinvestment.

Actualamountsaredependentupontheofferingproceedsweraise(andanyleverageweemploy);wecannotdeterminetheseamountsatthepresenttime.

FormofCompensationandRecipient DeterminationofAmount EstimatedAmount OperationalStage AssetManagementFee—Manager Quarterlyassetmanagementfee

currentlyequaltoanannualizedrateof0.85%,whichisbasedonourNAVattheendofeachpriorquarter.ThisrateisdeterminedbyourManagerinitssolediscretion,butcannotexceedanannualizedrateof1.00%.Theamountoftheassetmanagementfeemayvaryfromtimetotime,andwewillpubliclyreportanychangesintheassetmanagementfee.

Actualamountsaredependentupontheofferingproceedsweraise(andanyleverageweemploy)andtheresultsofouroperations;wecannotdeterminetheseamountsatthepresenttime.

ReimbursementofSpecialServicingExpenses–ManagerorOtherParty

WereimburseourManagerforactualexpensesincurredonourbehalfinconnectionwiththespecialservicingofnon-performingassets.Whetheranassetisdeemedtobenon-performingisinthesolediscretionofourManager.

Actualamountsaredependentupontheoccurrenceofanassetbecomingnon-performing,theoriginalvalueofsuchasset,andtheresultsofouroperations;wecannotdeterminetheseamountsatthepresenttime.

15

ReimbursementofOtherOperatingExpenses—Manager

WereimburseourManagerforout-of-pocketexpensespaidtothirdpartiesinconnectionwithprovidingservicestous.ThisdoesnotincludetheManager’soverhead,employeecostsbornebytheManager,utilitiesortechnologycosts.

Actualamountsaredependentupontheresultsofouroperations;wecannotdeterminetheseamountsatthepresenttime.

Theexpensereimbursementsthatwe

paytoourManageralsoincludeexpensesincurredbyoursponsorintheperformanceofservicesunderthesharedservicesagreementbetweenourManagerandoursponsor,includinganyincreasesininsuranceattributabletothemanagementoroperationofourCompany.

Liquidation/ListingStage DispositionFees None. —

SummaryofRiskFactors

Investinginourcommonsharesinvolvesahighdegreeofrisk.Youshouldcarefullyreviewthe“RiskFactors”sectionofthis

offeringcircular,beginningonpage26,whichcontainsadetaileddiscussionofthematerialrisksthatyoushouldconsiderbeforeyouinvestinourcommonshares.

ConflictsofInterest

OurManageranditsaffiliatesexperienceconflictsofinterestinconnectionwiththemanagementofourbusiness.Someofthe

materialconflictsthatourManageranditsaffiliatesfaceincludethefollowing:

· TheassetmanagementfeepaidtoourManagerisbasedonourNAV,whichiscalculatedbyoursponsor’sinternalaccountantsandassetmanagementteam.OurManagermaybenefitbyusretainingownershipofourassetsattimeswhenourshareholdersmaybebetterservedbythesaleordispositionofourassetsinordertoavoidareductioninourNAV.

· Oursponsor’srealestateanddebtfinanceprofessionalsactingonbehalfofourManagermustdeterminewhichinvestment

opportunitiestorecommendtousandotherFundriseentities.Oursponsorhasorganized,asofthedateofthisofferingcircular,thefollowingsimilarprograms:

•FundriseIncomeeREITII,LLC(the“IncomeeREIT®II”),FundriseIncomeeREITIII,LLC(the“IncomeeREIT®III”),FundriseIncomeeREIT2019,LLC(the“IncomeeREIT®2019”),andFundriseIncomeeREITV,LLC(the“IncomeeREIT®V”)whichwereformedtooriginate,investinandmanageadiversifiedportfolioofcommercialrealestateinvestmentsthroughtheacquisitionofcommercialrealestateloans,andwhichhasinvestmentobjectivesandstrategiesthataresimilartoours;

•FundriseEquityREIT,LLC(the“GrowtheREIT®”),FundriseGrowtheREITII,LLC(the“GrowtheREIT®II”),FundriseGrowtheREITIII,LLC(the“GrowtheREIT®III”),FundriseGrowtheREIT2019,LLC(the“GrowtheREIT®2019”),andFundriseGrowtheREITV,LLC(the“GrowtheREIT®V”)whichwereformedtooriginate,investinandmanageadiversifiedportfolioofcommercialrealestateproperties;

•FundriseMidlandOpportunisticREIT,LLC(the“HeartlandeREIT®”),whichwasformedtooriginate,investinandmanageadiversifiedportfolioprimarilyconsistingofinvestmentsinmultifamilyrentalpropertiesanddevelopmentprojectslocatedprimarilyintheHouston,TX,Dallas,TX,Austin,TX,Chicago,IL,andDenver,COmetropolitanstatisticalareas;

•FundriseWestCoastOpportunisticREIT,LLC(the“WestCoasteREIT®”),whichwasformedtooriginate,investinandmanageadiversifiedportfolioprimarilyconsistingofinvestmentsinmultifamilyrentalpropertiesanddevelopmentprojects

locatedprimarilyintheLosAngeles,CA,SanFrancisco,CA,SanDiego,CA,Seattle,WA,andPortland,ORmetropolitanstatisticalareas;

16

•FundriseEastCoastOpportunisticREIT,LLC(the“EastCoasteREIT®”),whichwasformedtooriginate,investinandmanageadiversifiedportfolioprimarilyconsistingofinvestmentsinmultifamilyrentalpropertiesanddevelopmentprojectslocatedprimarilyinthestatesofMassachusetts,NewYork,NewJersey,NorthCarolina,SouthCarolina,GeorgiaandFlorida,aswellasthemetropolitanstatisticalareasofWashington,DCandPhiladelphia,PA;•FundriseFor-SaleHousingeFUND–LosAngelesCA,LLC(the“LAHomeseFundTM”),whichwasformedtoacquirepropertyforthedevelopmentoffor-salehousingintheLosAngeles,CAmetropolitanstatisticalarea;•FundriseFor-SaleHousingeFUND–WashingtonDC,LLC(the“DCHomeseFundTM”),whichwasformedtoacquirepropertyforthedevelopmentoffor-salehousingintheWashington,DCmetropolitanstatisticalarea;•FundriseNationalFor-SaleHousingeFUND,LLC(the“NationaleFundTM”),whichwasformedtoacquirepropertyforthedevelopmentoffor-salehousinginthemetropolitanstatisticalareasinwhichoursponsorisnotcurrentlysponsoringanotherregionallyorlocallyfocusedeFundTM,ortoacquireassetsinsuchregionsthatarenotcurrentlythefocusofanothereFundTM;and•FundriseOpportunityFund,LP,whichisaprivateplacementthatwasformedtoacquirepropertieslocatedin“qualifiedopportunityzones”asdesignatedundertheTCJA.

TheseadditionalFundrisePlatforminvestmentopportunitiesmayhaveinvestmentcriteriathatcompetewithus.

· Oursponsor’srealestateanddebtfinanceprofessionalsactingonbehalfofourManagerhavetoallocatetheirtimeamongus,

oursponsor’sbusinessandotherprogramsandactivitiesinwhichtheyareinvolved.

· Thetermsofouroperatingagreement(includingtheManager’srightsandobligationsandthecompensationpayabletoourManageranditsaffiliates)werenotnegotiatedatarm’slength.

· OurshareholdersmayonlyremoveourManagerfor“cause”followingtheaffirmativevoteofshareholdersholdingtwo-thirds

oftheoutstandingcommonshares.Unsatisfactoryfinancialperformancedoesnotconstitute“cause”undertheoperatingagreement.

· AtsomefuturedateafterwehaveacquiredasubstantialinvestmentportfoliothatourManagerdetermineswouldbemost

effectivelymanagedbyourownpersonnel,wemayseekshareholderapprovaltointernalizeourmanagementbyacquiringassetsandemployingthekeyrealestateanddebtfinanceprofessionalsperformingservicestousonbehalfofourManagerforconsiderationthatwouldbenegotiatedatthattime.Thepaymentofsuchconsiderationcouldresultindilutiontoyourinterestinusandcouldreducethenetincomepershareandfundsfromoperationspershareattributabletoyourinvestment.Additionally,inaninternalizationtransaction,oursponsor’srealestateanddebtfinanceprofessionalsthatbecomeouremployeesmayreceivemorecompensationthantheypreviouslyreceivedfromoursponsororitsaffiliates.Thesepossibilitiesmayprovideincentivestotheseindividualstopursueaninternalizationtransaction,evenifanalternativestrategymightotherwisebeinourshareholder’sbestinterests.

· OurManagermay,withoutshareholderconsentunlessotherwiserequiredbylaw,determinethatweshouldmergeor

consolidatethrougharoll-uporothersimilartransactioninvolvingotherentities,includingentitiesaffiliatedwithourManager,intoorwithsuchotherentities.

17

· Asanon-listedcompanyconductinganexemptofferingpursuanttoRegulationA,wearenotsubjecttoanumberofcorporate

governancerequirements,includingtherequirementsforaboardofdirectorsorindependentboardcommittees.

HistoricalNAV

BelowisthequarterlyNAVpercommonshare,asdeterminedinaccordancewithourvaluationpolicies,foreachfiscalquarterfromthefirstdateitwascalculatedJune30,2016toMarch31,2019.LinkedinthetableistherelevantForm1-UdetailingeachNAVevaluationmethod.

Date NAVPerShare Link

June30,2016 $ 9.91Form1-

U

September30,2016 $ 9.92Form1-

U

December31,2016 $ 9.88Form1-

U

March31,2017 $ 9.84Form1-

U

June30,2017 $ 9.82Form1-

U


U


U

March31,2018 $ 9.86Form1-

U

June30,2018 $ 9.88Form1-

U


U


U

March31,2019 $ 9.96Form1-

U

DistributionsWhileweareundernoobligationtodoso,wehaveinthepastandexpectinthefuturetodeclareandpaydistributions

quarterlyinarrears;however,ourManagermaydeclareotherperiodicdistributionsascircumstancesdictate.Inorderthatinvestorsmaygenerallybeginreceivingdistributionsimmediatelyuponouracceptanceoftheirsubscription,weexpecttoauthorizeanddeclaredistributionsbasedondailyrecorddates.

OnApril12,2016,wepaidourfirstdistributiontoshareholdersofrecordasofthecloseofbusinessoneachdayoftheperiod

commencingonJanuary1,2016andendingonMarch31,2016.Inaddition,ourManagerhasdeclareddailydistributionsforshareholdersofrecordasofthecloseofbusinessoneachdayfromApril1,2016throughMay31,2019,asshowninthetablebelow.Duringfiscalyear2018,ourdistributionswerefundedfrombothcashflowfromourrealestateinvestmentsandofferingproceedswithamajorityofsuchdistributionsbeingfundedfromourcashflowprovidedbyrealestateinvestments.Seethesectionentitled“DescriptionofOurCommonShares–Distributions”forafullerdescriptionofthedistributionswehavedeclaredand/orpaid.

DistributionPeriod

DailyDistributionAmount/Common

Share Dateof

Declaration PaymentDate(1) AnnualizedYield

(2) Link01/01/16–03/31/16 0.0012205045 12/31/15 04/12/16 4.45% 04/01/16–04/30/16 0.0027397254 03/30/16 07/13/16 10.00% 05/01/16–06/30/16 0.0027397260 04/20/16 07/13/16 10.00% Form1-U07/01/16–09/30/16 0.0030136986 06/08/16 10/13/16 11.00% Form1-U10/01/16–12/31/16 0.0030821918 09/16/16 01/13/17 11.25% Form1-U01/01/17–03/31/17 0.0028767123 12/31/16 04/12/17 10.50% Form1-U

04/01/17–06/30/17 0.0028767123 03/21/17 07/13/17 10.50% Form1-U07/01/17–09/30/17 0.0028767123 06/26/17 10/09/17 10.50% Form1-U10/01/17–12/31/17 0.0027397260 09/28/17 01/09/18 10.00% Form1-U01/01/18–01/31/18 0.0016438360 12/22/18 04/11/18 6.00% Form1-U02/01/18–02/28/18 0.0021917808 01/26/18 04/11/18 8.00% Form1-U03/01/18–03/31/18 0.0021917808 02/27/18 04/11/18 8.00% Form1-U04/01/18–04/30/18 0.0021917808 03/28/18 07/09/18 8.00% Form1-U05/01/18–05/31/18 0.0021917808 04/30/18 07/09/18 8.00% Form1-U06/01/18–06/30/18 0.0022602740 05/29/18 07/09/18 8.25% Form1-U07/01/18–07/31/18 0.0023287671 06/28/18 10/08/18 8.50% Form1-U08/01/18–08/31/18 0.0023287671 07/27/18 10/08/18 8.50% Form1-U09/01/18–09/30/18 0.0023287671 08/24/18 10/08/18 8.50% Form1-U10/01/18–10/31/18 0.0023287671 09/26/18 01/07/19 8.50% Form1-U11/01/18–11/30/18 0.0022602740 10/29/18 01/07/19 8.25% Form1-U12/01/18–12/31/18 0.0022602740 11/29/18 01/07/19 8.25% Form1-U01/01/19–01/31/19 0.0021917808 12/27/18 04/10/19 8.00% Form1-U02/01/19–02/28/19 0.0021917808 01/30/19 04/10/19 8.00% Form1-U03/01/19–03/31/19 0.0021917808 02/28/19 04/10/19 8.00% Form1-U04/01/19–04/30/19 0.0021917808 03/28/19 07/21/19 8.00% Form1-U05/01/19–05/31/19 0.0019178082 04/30/19 07/21/19 7.00% Form1-UWeightedAverage 0.0024756710(3) - - 9.04%(4)

(1)Datespresentedarethedatesonwhichthedistributionswere,orare,scheduledtobedistributed;actualdistributiondatesmayvary.

(2)Annualizedyieldnumbersrepresenttheannualizedyieldamountofeachdistributioncalculatedonanannualizedbasisatthethencurrentrate,assuminga$10.00persharepurchaseprice.WhiletheManagerisundernoobligationtodoso,eachannualizedbasisreturnassumesthattheManagerwoulddeclaredistributionsinthefuturesimilartothedistributionsforeachperiodpresented,andtherecanbenoassurancethattheManagerwilldeclaresuchdistributionsinthefutureor,ifdeclared,thatsuchdistributionswouldbeofasimilaramount.

(3)AveragedailydistributionamountpercommonshareiscalculatedastheaverageofthedailydeclareddistributionamountsfromJanuary1,2016throughMay31,2019.

(4)Averageannualizedyieldiscalculatedastheannualizedyieldoftheaveragedailydistributionamountfortheperiodspresented,assuminga$10.00persharepurchaseprice.WhiletheManagerisundernoobligationtodoso,theaverageannualizedbasisreturnassumesthattheManagerwoulddeclaredistributionsinthefuturesimilartotheaveragedistributionsfortheperiodfromJanuary1,2016throughMay31,2019,andtherecanbenoassurancethattheManagerwilldeclaresuchdistributionsinthefutureor,ifdeclared,thatsuchdistributionswouldbeofasimilaramount.

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AnydistributionswemakeareatthediscretionofourManager,andarebasedon,amongotherfactors,ourpresentand

reasonablyprojectedfuturecashflow.DistributionsarepaidtoshareholdersasoftherecorddatesselectedbytheManager.Inaddition,theManager’sdiscretionastothepaymentofdistributionsislimitedbytheREITdistributionrequirements,whichgenerallyrequirethatwemakeaggregateannualdistributionstoourshareholdersofatleast90%ofourREITtaxableincome,computedwithoutregardtothedividendspaiddeductionandexcludingnetcapitalgain.Moreover,evenifwemaketherequiredminimumdistributionsundertheREITrules,wearesubjecttoU.S.federalincomeandexcisetaxesonourundistributedtaxableincomeandgains.Asaresult,theManagerintendstocontinuetomakeadditionaldistributions,beyondtheminimumREITdistribution,toavoidsuchtaxes.See“DescriptionofOurCommonShares—Distributions”and“U.S.FederalIncomeTaxConsiderations”.

AnydistributionsthatwemakedirectlyimpactsourNAV,byreducingtheamountofourassets.Ourgoalistoprovidea

reasonablypredictableandstablelevelofcurrentincome,throughquarterlyorotherperiodicdistributions,whileatthesametimemaintainingafairlevelofconsistencyinourNAV.Overthecourseofyourinvestment,yourdistributionsplusthechangeinNAVpershare(eitherpositiveornegative)willproduceyourtotalreturn.

Ourdistributionswillgenerallyconstituteareturnofcapitaltotheextentthattheyexceedourcurrentandaccumulated

earningsandprofitsasdeterminedforU.S.federalincometaxpurposes.TotheextentthatadistributionistreatedasareturnofcapitalforU.S.federalincometaxpurposes,itwillreduceaholder’sadjustedtaxbasisintheholder’sshares,andtotheextentthatitexceedstheholder’sadjustedtaxbasisitwillbetreatedasgainresultingfromasaleorexchangeofsuchshares.

DistributionSupportCommitment

Toprovideshareholderswithdistributionsbeforewehadacquiredasubstantialportfolioofincome-producinginvestments,

Fundrise,LP,anaffiliateofoursponsor,agreedtopurchaseadditionalcommonsharestosupportourquarterlydistributionpaymentsundercertaincircumstances(the“distributionsupportcommitment”)pursuanttoadistributionsupportagreement.inanycalendarquarterduringthedistributionsupportperiodwerelessthantheamountthatwouldproducea15%annualizedreturn,thenFundrise,LPwasobligatedtopurchasesharesfollowingtheendofsuchquarteratthethenNAVpershareforanaggregatepurchasepriceequaltotheamountbywhichouroperatingresultswerelessthanthe15%annualizedamount.Thedistributionsupportcommitmentwastobeinplaceuntil(i)thepurchasebyFundrise,LPofanaggregateof$1,000,000incommonsharesor(ii)December31,2017,whicheverwasearlier(the“distributionsupportperiod”).

AsofFebruary14,2017,Fundrise,LPhaspurchased100,000commonsharesinsatisfactionofitsdistributionsupportcommitment,thussatisfyingitsobligationsunderthedistributionsupportcommitment.Accordingly,Fundrise,LPisnolongerobligatedtopurchaseanyadditionalsharespursuanttothedistributionsupportcommitment.

19

FormoreinformationregardingFundrise,LP’sdistributionsupportcommitmentandourdistributionpolicy,pleasesee

“DescriptionofOurCommonShares—Distributions—DistributionSupportCommitment”.

BorrowingPolicyWemayemployconservativelevelsofborrowinginordertoprovideadditionalfundstosupportourinvestmentactivities,

althoughasofDecember31,2018,wehavenotutilizedanyleverage.Ourtargetportfolio-wideleverageisbetween50-85%ofthegreaterofcost(beforedeductingdepreciationorothernon-cashreserves)orfairmarketvalueofourassets.Duringperiodswhenwearesignificantlygrowingourportfolio,wemayemploygreaterleverageonindividualassets(thatwillalsoresultingreaterleverageoftheportfolio)inordertoquicklybuildadiversifiedportfolioofassets.OurManagermayfromtimetotimemodifyourleveragepolicyinitsdiscretioninlightofthen-currenteconomicconditions,relativecostsofdebtandequitycapital,marketvaluesofourproperties,generalconditionsinthemarketfordebtandequitysecurities,growthandacquisitionopportunitiesorotherfactors.However,otherthanduringaperiodwhenwearesignificantlygrowingourportfolio,itisourpolicytonotborrowmorethan75%ofthegreaterofcost(beforedeductingdepreciationorothernon-cashreserves)orfairmarketvalueofourassets.WecannotexceedtheleveragelimitofourleveragepolicyunlessanyexcessinborrowingoversuchlevelisapprovedbyourManager’sinvestmentcommittee.See“InvestmentObjectivesandStrategy”formoredetailsregardingourleveragepolicies.

ValuationPolicies

Attheendofeachfiscalquarter,oursponsor'sinternalaccountantscalculateourNAVpershareusingaprocessthatreflects(1)

estimatedvaluesofeachofourcommercialrealestateassetsandinvestments,includingrelatedliabilities,basedupon(a)marketcapitalizationrates,comparablesalesinformation,interestrates,netoperatingincome,(b)withrespecttodebt,defaultrates,discountratesandlossseverityrates,(c)forpropertiesthathavedevelopmentorvalueaddplans,progressalongsuchdevelopmentorvalueaddplan,and(d)incertaininstancesreportsoftheunderlyingrealestateprovidedbyanindependentvaluationexpert,(2)thepriceofliquidassetsforwhichthirdpartymarketquotesareavailable,(3)accrualsofourperiodicdistributionsand(4)estimatedaccrualsofouroperatingrevenuesandexpenses.Forjointventureordirectequityinvestments,thesponsorprimarilyreliesondiscountedcashflowmethod.Underthediscountedcashflowmethod,ourassetmanagementteamwillcalculatethedistributionsduetotherespectiveinvestmentbasedonaproperty-levelproformameasuredagainstongoingactualperformanceoveratheprojectedlikely-holdperiod.Thesponsor’sassetmanagementteamwillthendiscountfuturecash-flowprojectionsatanappropriatemarketlevered-discountratetodeterminepresentvalue,whichvalueisconsideredthenetassetvalueoftheinvestment.Thesponsormayalternativelyapplythehypotheticalsalesmethodtovalueitsinvestments.Underthisapproach,oursponsor’sassetmanagementteamwillassume(i)thesaleofthepropertyatapriceequaltotheconcludedpropertyvalue,(ii)theliquidationofanyadditionalassetsafterpayingallliabilities,and(iii)thedistributionofthenetsaleproceedstoinvestors.Thedistributedamountisconsideredthenetassetvalueofeachrespectiveinvestment.Fordebtandfixed-returnpreferredequityinvestment,assumingnomaterialadversechangeintheproperty,thesponsor’sassetmanagementteamwillmarktheseinvestmentstotheircostbasis(includinganyaccruedunpaidinterest).Ifthereweretobematerialadversechangesintheseproperties,theassetmanagementteamintendstovaluetheseinvestmentsusingthehypotheticalsalesmethoddescribedabove.Forourinvestmentsthathaveclosedwithinthreetoninemonthsandnomaterialchangeshaveoccurredfromtheoriginalunderwriting,ourassetmanagementteamwilltypicallyapplytheoriginalpropertypurchaseprice(orpre-closingthirdpartyappraisalvalue)forthepropertyvaluation,andtheinvestmentcostbasisfortheinvestmentlevelvaluation.

Note,however,thatthedeterminationofourNAVisnotbasedon,norintendedtocomplywith,fairvaluestandardsunder

GAAP,andourNAVmaynotbeindicativeofthepricethatwewouldreceiveforourassetsatcurrentmarketconditions.Ininstanceswherewedetermineanappraisaloftherealestateassetisnecessary,including,butnotlimitedto,instanceswhereourManagerisunsureofitsabilityonitsowntoaccuratelydeterminetheestimatedvaluesofourcommercialrealestateassetsandinvestments,orinstanc

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