Joe Elias of Loquidity

GRAND RAPIDS, MI—Commercial real estate projects in the Midwest region sometimes have to fight to gain the attention of investors, while at the same time, it seems there is never a shortage of equity or debt available for projects on the coasts or in gateway cities. But Joe Elias tells GlobeSt.com that with the Midwestern economy beginning to take flight, opportunities abound, and that utilizing online crowdfunding platforms will help bring in the needed dollars.

Elias is the chief operating officer of Grand Rapids, MI—based Loquidity, a real estate crowdfunding platform that launches today with a $3.5 million equity deal for Leonard Oaks Apartments, a 72-unit multifamily property in its hometown. The company plans to raise about $1.5 million on the platform. Investors will have the chance to kick in as little as $5,000. Such platforms were legalized by the 2012 JOBS Act, but this is the first one in the Midwest.

“Our goal is community development,” Elias says. The funders “will be part-owners of this particular property, and we’re looking for people who want to help improve properties, who want to see something grow rather than just a cash cow.”

Loquidity will put about $500,000 of the money raised into capital improvements for the property. As managing member, Loquidity, has already secured about $2 million in financing for the three-story, garden-style apartment community. It was built in 1980, sits on about 4.6 acres, and is currently 95.8% occupied.

Although they decided to start with a multifamily property, Elias and his partners are already talking to other brokers about using the platform for industrial, office and retail spaces. They will concentrate real estate investments in Michigan, Illinois, Ohio, Wisconsin, Iowa, Nebraska, Minnesota, Missouri, Kentucky, Pennsylvania, Virginia, Tennessee, Indiana and Kansas.

“We know this market really well and we’re very passionate about the Midwest,” Elias adds. Both he and Jesse Clem, the chief executive officer, have about 15 years of experience in commercial real estate.

“It was always a struggle to find the right capital” in the Midwest, but Elias expects that crowdfunding can bring in the small investors, such as doctors and other professionals, largely missing so far. “A lot of physicians don’t do a very good job of investing, and this is a chance for them to take part in investment deals that have been thoroughly vetted.”