This Mortar Group Review will help you learn more about Mortar Group's investment offerings, including how the alternative investments on Mortar Group are structured, and what your potential returns might be. You can read more about the criteria we use to review investment platforms here.
Mortar Group is a Manhattan-based real estate development firm specializing in multi-family (mostly condo) projects in niche New York neighborhoods, such as Williamsburg, Park Slope, and Hell’s Kitchen. Founded in 2004, Mortar is a vertically integrated firm, handling things like architecture, development, leasing, marketing, and property management in-house.
Building on their base of high-net-worth investors, Mortar Group is using provisions in the 2012 JOBS Act to expand their investor pool through online investment crowdfunding.
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Types of investments Mortar Group offers
Mortar Group offers investments in multi-family commercial real estate projects in New York City, with a focus on niche neighborhoods like Williamsburg, Prospect Heights, and Greenpoint.
Once you’ve registered with Mortar Group and have verified your accreditation status, you can review details of each prospective investment, as well as see limited information about prior offerings.
What do you get when investing with Mortar Group?
When you invest through Mortar Group, as with many real estate investment crowdfunding platforms, what you actually receive is a membership interest in a Special Purpose Entity (typically an LLC) created specifically for the investment. The LLC in turn is what actually holds the equity, preferred equity, or debt interest in the property. For each real estate investment you make with Mortar Group, you’ll receive a separate K1 at tax time to report your share of the income received by the LLC.
How does Mortar Group make money?
Mortar Group does not charge any direct fees to investors to invest on the platform, though does charge various fees such as an ongoing Management Fee and a Disposition Fee when the property is sold. Prospective investors should review the details of a specific offering before investing.
Potential returns and cashflow
The projected return varies based on the specific offering, but Mortar Group says that they have earned an overall average 18% annual return since 2004, with returns of 16-21% across their offerings.
Average hold time for real estate investments with Mortar Group are 3-5 years.
As with many real estate investments, investors receive regular cashflow from rental income (net of fees, and distributed quarterly), and then a pro-rata share of the profits when a property is sold.
Breadth of offerings on Mortar Group
According to the Mortar Group website, they have closed 23 projects, representing $239M in gross sales. As of this writing, there are six active offerings available for investment.
Each available offering includes detailed financial models and information about the property, including photos, site plans, and tenant profiles.
Regulatory framework and due diligence expectations
Mortar Group’s in-house development team reviews and underwrites all of their investments. Their long track record and narrow focus on niche NYC neighborhoods implies a strong competence in property selection.
Mortar Group offers investments only to accredited investors, under SEC Reg D.
This review was first published on 10 May 2022.