Workforce housing developer the Urban Pacific Group of Cos. is leveraging crowdfunding platform to raise capital for construction projects. The company has partnered with crowdfunding platform Small Change for its project at 1491 Atlantic. Prior to the pandemic, traditional financing sources provided the terms and timeline needed to get deals done. Now, land sellers have become more flexible.

"We have always had an interest in using crowdfunding platforms to raise capital, generally," Scott K. Choppin, the Urban Pacific Group of Cos., tells GlobeSt.com. "What has changed is that the timing of projects has changed in 2020. We are able to drive different timelines on new development projects, particularly in the land acquisition phase. When the market was at its peak, the land needed to be purchased more quickly than we would be able to if we paired up with a crowdfunding source. They would always tell us that we would need 90 days to raise the capital. That was a complicated endeavor when we were closing land deals quickly."

That changed at the start of the pandemic. Many sellers were willing to renegotiate transaction terms, opening up the possibility of alternative financing. "When the market changed in March and April, the owners of several land deals that we were tracking were very insistent on getting very quick closings," says Choppin. "When we re-approached them after the market had changed, we offered a new price and a new timeline, which was much longer. We have had several land sellers that have capitulated either on price, terms or both. That allowed us to pair up with a crowdfunding source, and we could give them the 90 days."