Patch of Land has announced that it is expanding its commercial property activity. At the moment, 92% of the properties the company lists are residential, but that may be about to change. In a statement, the management implied that it was sustained strong growth in the commercial space that served as the impetus for diversification:
“As our company continues to grow, Patch of Land is proud to expand its product offerings into the commercial real estate lending space. This move allows us to provide greater diversification across different asset types along the yield curve for our Investors. In addition to producing lucrative, consistently cash-flowing returns, the commercial real estate offerings give our Investors the opportunity to add a viable long-term option to their real estate loan portfolio to complement our short-term residential offerings.”
Patch of Land, which recently secured a $23.6 million investment, is expected to offer a 6-10% annual yield on commercial property, with projects typically running for 10 to 60 months - according to a report from CrowdfundInsider. The first commercial project to be listed had, at the time of writing, secured $1.12 million of the required $3.2 million, at a gross return of 10% over 18 months.
At the moment Patch of Land offers a 12.2% average blended rate of return with an average loan size of $301,110. To date, 0% of loans have resulted in a loss of principle.
Last month, AltFi caught up with Patch of Land Chief Marketing Officer AdaPia and discussed the exciting opportunities available to them. Whilst then we focused on RIAs and institutional capital then, this is clearly another avenue for expansion in the fast-moving US AltFi space.