Cottonwood Communities Inc., a publicly registered non-traded real estate investment trust, is evaluating a stock-for-stock merger transaction with Cottonwood Multifamily Opportunity Fund Inc, a Regulation A+ REIT affiliate.
Cottonwood Multifamily Opportunity Fund was created to invest in multifamily development projects and/or make mezzanine loans or preferred equity investments in multifamily construction and development projects. Its $50 million offering launched in November 2017 and was fully subscribed in June 2019.
Cottonwood Communities and Cottonwood Multifamily Opportunity Fund have each engaged an independent third-party financial advisor and legal counsel to advise with respect to the merger transaction. An exchange ratio is expected by the mid-May 2022.
Cottonwood Multifamily Opportunity Fund’s investments include two development projects and one investment in a land parcel held for development, all through separate joint ventures with its operating partnership, Cottonwood Residential O.P. LP.
Last May, Cottonwood Communities completed the first of three affiliated mergers when it merged with Cottonwood Residential II Inc. and its operating partnership, Cottonwood Residential O.P.
In July 2021, Cottonwood Communities closed two additional mergers with Cottonwood Multifamily REIT I Inc. and Cottonwood Multifamily REIT II Inc., both Regulation A+ REITs.
Cottonwood Communities has raised gross proceeds of approximately $127 million from the sale of Series 2019 Preferred Stock in its private offering and approximately $155.5 million from the sale of common stock in its initial offering, as of February 2022.