SAN FRANCISCO—The SEC's most recent changes to the JOBS Act allow small non-accredited investors to participate on the equity side in real estate. These changes allow crowdfunding to become even more prevalent and enhance its legitimacy as a source of real estate capital. We spoke with Olga Koroleva, founder and CEO, and Larry Souza, chief economist, with San Francisco-based Monetarex, an investment platform for commercial real estate professionals, about how these changes affect the CRE industry.

GlobeSt.com: How will the most recent changes to the JOBS Act impact commercial real estate?

Souza: In a historical context, these changes represent an extension of the evolution and innovation of real estate capital-markets product. It's the democratization of participation by small investors in commercial real estate, and it's great because most small investors can't participate in CRE investment directly—it's too expensive. Because it's private, public equity investments should behave more like the underlying real estate asset vs. a security traded on an exchange. But really, the ability to create transparency will be the biggest contribution and the biggest hurdle overcome—to have sponsors provide transparency not only of their overall business model and leadership, but also the performance of an underlying asset in a portfolio over a period of time on an ongoing basis.

Koroleva: We believe these changes started to take place a long time ago, since the 1960s. They will open up opportunity on the equity side, provide for more direct-investment opportunities and bring more transparency to the market. We oversee, provide data and show more opportunities to a broader audience of investors.

GlobeSt.com: What should industry executives know and/or do about the changes?

Koroleva: Embrace these changes. It's the evolution of the industry. This is the next natural step.

Souza: We saw in large developers and other operators of CRE as it has transformed over the last 20 years that, as they started to introduce new forms of capital raising and investment, they changed their organizational structure to include participation either through joint ventures or funds to give institutional investors access to assets they were developing. You'll probably see real estate operators not only adopt our platform, but also adopt crowdsourcing as one arm or component of their capital-markets operation. We've seen a couple of case studies of that occurring. I would not be surprised to see many adopt this channel as part of their business strategy. There will be an institutional arm, a private-equity component and crowd-financing or crowdsourcing component if they want to extend their capital reach into that segment.

At the end of the day, it's really a means to channel or gain access to private equity—through institutional, middle market or crowdfunding—to create channels that will lower the cost of equity. Once you get the equity, you can apply mortgage finance to leverage out the asset or portfolio.