Cottonwood Raises $1.25 Million

The private placement marks a continued push to attract accredited investors under Rule 506(b) exemption.

May 21, 2025

Investor Activity Accelerates in May

Cottonwood Communities is continuing to draw interest from accredited investors. Between May 8 and May 19, the company raised $1.25 million through its ongoing private offering of Series A Convertible Preferred Stock. This latest capital raise adds 125,291 shares to the Series A tally and builds on the momentum of a $150 million offering first launched in September 2023.

The offering falls under Rule 506(b) of Regulation D, which allows Cottonwood to sell shares to accredited investors without having to register the securities—provided it avoids public solicitation. Each share is priced at $10, and proceeds from this latest sale were received directly from investors participating in the private placement.

As part of the transaction, the company paid out just over $110,000 in combined selling commissions and placement fees. That reflects the cost of distribution in a structured, broker-driven offering environment. With this issuance, the total number of outstanding Series A Convertible Preferred shares now stands at 8,459,261.

Private Capital Fuels Real Estate Strategy

Cottonwood, based in Salt Lake City, has a focused approach to capital formation. The company uses preferred equity as a tool to bring in outside capital for its multifamily investment platform. By keeping the offering limited to accredited investors and working through exempt channels, Cottonwood can move quickly and maintain flexibility around deal timing.

This round of proceeds will help support the company’s broader investment objectives, which typically include:

• Real estate development


• Property acquisitions


• Portfolio recapitalizations

While the specific use of funds wasn’t outlined in this report, Cottonwood’s overall strategy relies on these types of capital raises to meet market demands and keep growth on track.

With investor participation continuing at a steady pace, Cottonwood is showing it can bring capital in through structured offerings while staying aligned with regulatory standards and investor expectations.