ORANGE COUNTY, CA—Still in its early innings, crowdfunding is catching on fast as a form of fundraising for commercial real estate transactions, but how much progress has it really made in the past year or so, and where is it heading? GlobeSt.com spoke exclusively with Joe Elias, co-founder and COO of Loquidity.com; Dan Miller, co-founder and president of Fundrise; Judd Hollas, CEO of EquityNet; Adam Chapnick, principal of Asset Avenue; Joaquin de Monet, founder and managing principal of Palisades Capital Realty Advisors Inc.; Gary Tenzer, principal and managing director at George Smith Partners; Ryan Smith, director of We Are Crowdfunding; and Jilliene Helman, CEO of Realty Mogul, about how far it's come. Also, stay tuned for an upcoming feature article in GlobeSt.com's sister publication Real Estate Forum on the subject of crowdfunding, its acceptance as a legitimate source of financing and how it is viewed in relation to traditional avenues of finance.

GlobeSt.com: How much progress has CRE crowdfunding made in the last year, and how much do you expect it to progress over the coming year?

Smith: Crowdfunding for real estate has made enormous progress, and new platforms launch constantly. But the funding completed on these platforms is still negligible when compared to traditional real estate financing. Over the next year, institutional sponsors will continue to take notice and search for a platform that understands both the real estate and financial-services industries. Unfortunately, and in our opinion, the space will also begin to experience the results of poorly vetted deals that overpromised and underdelivered. As this occurs, We Are Crowdfunding will continue to direct the industry standards toward well-vetted, institutional-quality offerings.

Elias: The one thing that real estate crowdfunding (for commercial or residential) has done is enable a new swatch of investors to directly access real estate deals they were previously excluded from due to very high investment minimums. Some platforms have lowered the investment minimums to encourage more investors to participate—ours is just $5,000. Crowdfunding allows investors opportunities to handpick properties they feel most comfortable investing in to diversify their portfolio by location, property type or even to support a particular cause—rebuilding a damaged property, for example.

Miller: Four years ago, we were the only CRE crowdfunding platform. A year ago, there were just a few platforms getting started in the space. Now, there are over 100. Real estate companies have raised over $100 million through real estate crowdfunding in the last six months alone.

Right now, while undeniably gaining steam, real estate crowdfunding is still a peripheral strategy. I expect that the industry will look very different by the end of 2015—with enormous growth in the number of investors and real estate companies engaging with the space and greater specialization among platforms as well.

Hollas: Real estate is an industry that is quickly realizing the potential that crowdfunding has to offer. Over the past few months, dozens of real estate companies have joined EquityNet to connect with accredited investors.

GlobeSt.com: To use a baseball analogy, what inning are we in with crowdfunding in CRE?

Tenzer: We are in the third or fourth inning; there are new crowdfunding platforms in formation, and the investor pool is still growing. I believe that the crowdfunding business will continue to expand until the next real estate recession, whenever it comes; only then will the quality and reliability of each crowdfunding platform's underwriting and selection of sponsors be put to the test. Like TIC syndications that preceded the last real estate recession, many of the crowdfunding platforms may not survive, leaving their investors in limbo or worse.

Miller: Top of the second.

Hollas: We're in the third inning.

de Monet: Bottom of the first. We're beyond batting practice and have taken the field, but you never know long the game is going to go—it may be called because of rain. We're in the early innings because of the amount of capital that needs to be put to use, technology and folks adapting to the change. Crowdfunding for real estate is relatively new, but for others it's further along. It will continue to evolve for real estate investing.

Helman: First inning.

Chapnick: Commercial real estate crowdfunding is an emerging niche within an emerging field. This space is a relatively new playing field and, as such, not only is the game just beginning, but what's maybe more important is that everyone knows where the game is taking place and what it is. It behooves all the players in the commercial real estate crowdfunding game to do their level best to represent the industry properly and to do their fiduciary duty. If one platform makes mistakes, it could have a negative impact on the perception of the industry as a whole, especially during these critical early-adopter years where peer-to-peer lending and crowdfunding are emerging in the popular understanding.