Crowdfunding Marketplace Hits $500M Mark
CrowdStreet crossed the $500 million threshold in total online investments last month, with many of the funded projects under the radar of large institutional equity investors.
PORTLAND, OR—CrowdStreet’s online marketplace for direct equity commercial real estate investment crossed the $500 million threshold in total online investments last month. This represented a record number of new individual investors on the platform.
The news accompanies a record quarter with more than $75 million invested by individuals in commercial real estate deals on CrowdStreet. The first quarter ended with more than $525 million invested on the CrowdStreet Marketplace since its foray into office, multifamily, hotel, retail and industrial transactions (April 2014 to March 2019). In fact, since its inception, approximately $11.9 billion of property value has been transacted through the Marketplace.
The fastest fundraise involved one sponsor raising more than $4 million in offers in slightly more than an hour. Moreover, the inaugural fund of the CrowdStreet Blended Portfolio raised more than $9 million from 198 investors in two months.
Overall to date, the investment performance of 12 realized offerings on CrowdStreet have generated a 31.7% average XIRR and 1.6x average realized equity multiple from April 2014 to March 2019.
“Crossing over the $500 million mark is a significant milestone that clearly demonstrates that online investing in commercial real estate is here to stay,” said Tore C. Steen, CEO of CrowdStreet. “Investors on CrowdStreet can now choose between directly investing in a variety of commercial real estate asset types, investing in a diversified portfolio of Marketplace assets by making one investment in the CrowdStreet Blended Portfolio or getting personalized advice with our private managed accounts service.”
CrowdStreet was the winner of the 2019 Rising Star category in the annual Oregon Technology Awards. The quarter also included CrowdStreet supporting Motley Fool’s new real estate investment advisory service launch.
“Motley Fool has launched a new subscription service called Mogul by Millionacres that focuses on real estate investing,” said Austin Smith, director of Millionacres. “This service discusses and presents subscribers with real estate investment opportunities that includes some commercial real estate offerings from the CrowdStreet Marketplace.”
Sponsors that raised capital on the CrowdStreet marketplace in the first quarter included Feldman Equities, KBS and Driftwood Hospitality. Through both its Marketplace and software solutions, more than 112,000 investors along with 275 commercial real estate operators and developers are currently on the CrowdStreet platform.
“New investors are discovering the ease and transparency of online real estate investing and becoming more comfortable making repeat investments on platforms like CrowdStreet,” Steen tells GlobeSt.com. “The importance of diversification, the hunt for higher-yielding investments, and the access now available to a broad set of investors have captured their interest and we see that expanding month over month. Keep in mind that before the advent of crowdfunding, these projects weren’t accessible to very many people, so in effect, there is large pent-up demand that we are uncorking and cultivating.”
CrowdStreet is helping to create a community where individual investors and CRE firms can work together to maximize wealth through commercial real estate. Its technology helps investors gain access to investment opportunities outside of the traditional avenues of the stock market, which may allow them to diversify investment portfolios and better distribute risk, while fundamentally transforming real estate investing through technology.
“Sponsors are migrating online because they are realizing that this movement is inevitable and therefore better to jump in to be a part of it as it evolves,” Steen tells GlobeSt.com. “The efficiencies of both automating their investor relations and the opportunity to raise real amounts of capital online allow them to expand their investor bases and communicate with them in a win-win manner.”
CrowdStreet gives accredited investors access to institutional-quality offerings. CrowdStreet technology allows sponsors to raise capital through online syndication and manage investors, both on the Marketplace and with a SaaS solution.
“Remember that CrowdStreet serves the middle market, that is, sponsors with projects generally between $15 million and $50 million,” Steen tells GlobeSt.com. “Many of these projects are under the radar of large institutional equity investors, so we’ve created a new way for sponsors and investors to come together online.”