Cottonwood Communities’ $750 Million Offering Breaks Escrow

December 21, 2018

Cottonwood Communities’ $750 Million Offering Breaks Escrow

December 20, 2018 | James Sprow | Blue Vault

Cottonwood Communities Inc., a publicly registered non-traded real estate investment trust sponsored by Cottonwood Residential, has reached the minimum offering of $2 million and broken escrow. The REIT can now issue shares of common stock and use the funds to make real estate investments.

Cottonwood Communities launched its $750 million offering in August 2018 to invest primarily in multifamily properties in major markets throughout the U.S. Shares are priced at $10.00 each, and all offering-related expenses will be paid by the REIT’s advisor, Cottonwood Communities Management LLC, without reimbursement.* The offering has a minimum investment of $5,000.

As of December 18, 2018, Cottonwood Communities had raised approximately $2.7 million in investor equity, which satisfied the minimum offering amount in all states where they are conducting their offering except Kansas, Ohio, Pennsylvania, and Washington, which have minimum offering amounts of $10 million, $33.75 million, $33.75 million, and $20 million, respectively.

Cottonwood Residential, the sponsor of Cottonwood Communities, Inc., is a fully integrated real estate company focused exclusively on the multifamily asset class. The sponsor has approximately $2 billion in assets under management in four sponsored real estate investment programs.

A copy of the most recent version of the Cottonwood Communities Prospectus may be obtained at: www.cottonwoodcommunities.com.

*Cottonwood Communities Management, LLC will be responsible for paying the selling commissions (up to 6% of share purchase price), dealer manager fee (3% of the gross offering proceeds), and organizational and offering expenses (estimated at 4% of the gross proceeds from the offering if it raises the minimum offering amount and 1% of the gross proceeds from the offering if it raises the maximum offering amount). A portion of the dealer manager fee will be allocated to wholesalers that are internal to Cottonwood. Cottonwood Communities Investor, LLC, the sole limited partner of the REIT’s operating partnership will receive a promotional interest equal to 15% of net income and cash distributions, but only after investors receive, in the aggregate, cumulative distributions sufficient to provide a return of our capital, plus a 6% cumulative, noncompounded annual return on their aggregate invested capital. This, and other fees and expenses that may apply (including acquisition expense reimbursement, independent director compensation and other operating expenses) are described in detail in the REIT’s prospectus.


Learn more about Cottonwood on the Blue Vault Sponsor Focus page


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Gregory De Jong, CFP, Co-Founder of Paragon Advisors, LLC.
July 7, 2015

Blue Vault is just what advisors need to size up the different offerings in the nontraded REIT market. Just as importantly, it’s what the industry needs to encourage best practices among REITs.