{"id":1004106240,"date":"2014-10-27T12:06:47","date_gmt":"2014-10-27T20:06:47","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004106240"},"modified":"2022-12-07T19:21:26","modified_gmt":"2022-12-08T03:21:26","slug":"uli-special-report-crowdfunding-leaders-share-insights","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/uli-special-report-crowdfunding-leaders-share-insights\/","title":{"rendered":"ULI Special Report: Crowdfunding Leaders Share Insights"},"content":{"rendered":"

By Paul Rosta, Senior Editor<\/em><\/p>\n

Innovation was a recurring theme at the Urban Land Institute\u2019s fall conference in Manhattan last week, and capital markets took the spotlight when a panel of executives explored the crowdfunding phenomenon.<\/p>\n

Douglas Ellenoff, a partner in the law firm of Ellenoff Grossman & Schole L.L.P. and the panel\u2019s moderator, kicked off the Wednesday afternoon session at the Javits Center by responding to the panel\u2019s title: \u201cIs Crowdfunding Becoming Crowded?\u201d Ellenoff said, \u201cNot even close. The market is way more open than that.\u201d<\/p>\n

Since the JOBS Act authorizes investments of up to $1 million, crowdfunding gives individuals and companies exposure to real estate with small amounts. \u201cIt has very big promise for changing the way people think about real estate,\u201d asserted Benjamin Miller, co-founder of Fundrise, a Washington, D.C.-based crowdfunding platform. Just days after Miller\u2019s comments, the company announced on Monday that it had raised $1.4 million toward the acquisition of a multi-family portfolio in Brooklyn, N.Y. Provided by 33 investors in increments ranging from $5,000 to $500,000, the funds will provide about 19 percent of the project\u2019s total capital, Fundrise said in a statement.<\/p>\n

Throughout the discussion, speakers took pains to distinguish the rigorous real estate version of crowdfunding from popular vehicles like Kickstarter. They noted that investors and sponsors must meet strict guidelines for qualification. \u201cWe don\u2019t just want to grab anybody that wants to throw money out,\u201d noted Kevin Swill, COO of the Carlton Group, which launched a crowdfunding platform earlier this year.<\/p>\n

Rodrigo Nino, president & CEO of Prodigy Network, a New York City-based crowdfunding platform, advised potential platform sponsors to have a third-party administrator and a good attorney. While encouraging the audience to respect the regulatory structure associated with crowdfunding, he also urged his listeners not to be intimidated: \u201cStop thinking this is a complicated needle in a haystack.\u201d<\/p>\n

Although crowdfunding is a relative newcomer to real estate, panelists emphasized that they are applying high standards. Ellenoff noted that platform sponsors must be registered broker dealers, for example. Prodigy Network seeks institutional-quality assets, because, Nino explained, \u201cwe don\u2019t want to be reinventing the wheel.\u201d<\/p>\n

The Carlton Group\u2019s crowdfunding platform likewise takes a conservative approach, in part because the company puts its own equity into every deal, Swill noted. The company specializes in off-market deals that typically offer 6 percent cap rates and 20 percent internal rates of return.<\/p>\n

At CrowdStreet, a Portland, Ore.-based operator, \u201cwe are totally obsessed with quality sponsors,\u201d said Darren Powderly, the firm\u2019s co-founder. Employing a 15-point checklist for sponsors, the firm eliminates as many as 80 percent of candidates. Such an exacting approach is vital, Powderly explained, because \u201cwe risk our business with every deal we do.\u201d Moreover, he added, \u201cwhen the next downturn comes, we want to be the recipient of that flight to quality.\u201d<\/p>\n

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Innovation was a recurring theme at the Urban Land Institute\u2019s fall conference in Manhattan last week, and capital markets took the spotlight when a panel of executives explored the crowdfunding phenomenon.<\/p>\n","protected":false},"author":445,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21783,21742],"tags":[],"class_list":["post-1004106240","post","type-post","status-publish","format-standard","hentry","category-investment","category-latest"],"acf":[],"yoast_head":"\nULI Special Report: Crowdfunding Leaders Share Insights - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/uli-special-report-crowdfunding-leaders-share-insights\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"ULI Special Report: Crowdfunding Leaders Share Insights\" \/>\n<meta property=\"og:description\" content=\"Innovation was a recurring theme at the Urban Land Institute\u2019s fall conference in Manhattan last week, and capital markets took the spotlight when a panel of executives explored the crowdfunding phenomenon.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/uli-special-report-crowdfunding-leaders-share-insights\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2014-10-27T20:06:47+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-08T03:21:26+00:00\" \/>\n<meta name=\"author\" content=\"Paul Rosta\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/uli-special-report-crowdfunding-leaders-share-insights\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/uli-special-report-crowdfunding-leaders-share-insights\/\",\"name\":\"ULI Special Report: Crowdfunding Leaders Share Insights - 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