We’ve received questions about how the Jacksonville (JAX) portfolio was structured and how proceeds are distributed as loans are resolved. Below is a plain-English explanation.
Were these individual loans?
Yes. Each investment was tied to a specific real estate loan secured by a specific property.
However, those loans were originated through a joint venture structure. That means the loans were part of a larger financing arrangement between Groundfloor and other capital partners.
2. What is the joint venture (JV)?
The JV was created to scale originations in the Jacksonville market. It included:
• A local operating partner
• A credit investor in a defined capital position
• Groundfloor, representing investor interests
This structure does not change the underlying loan collateral or first-lien position. It does affect how capital flows during portfolio resolution.
3. Why doesn’t capital return immediately when an individual property sells?
Under a traditional one-off loan, proceeds typically flow directly to repay that loan.
Within the JV structure, proceeds first flow into the broader JV repayment waterfall. That means funds are distributed according to the capital agreement in place between parties.
In 2025, an amended structure was executed to ensure that Groundfloor (and its investors) receive proceeds first as loans are resolved.
4. Did the structure change the risk profile?
The loans themselves did not change. What changed was market conditions and the operational path to maximize recovery.
Because Florida is a judicial foreclosure state, resolution timelines can extend 12+ months per asset. In some cases, properties may be stabilized through rental before sale to improve recovery outcomes.
These actions are taken with the objective of maximizing principal recovery rather than liquidating at a discount.
5. Why pursue stabilization instead of cutting losses?
In distressed markets, forced liquidation can materially reduce recovery. Stabilizing assets before sale can improve total portfolio recovery.
The goal remains the same: maximize principal returned to investors.
6. How often will updates be provided?
Quarterly updates will continue. In some quarters, there may be limited new information as foreclosures and asset stabilization work through the legal process.
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