Crowdfunding platforms continue to gain momentum as a viable means for investors to identify real estate investment opportunities, and for real estate firms to raise capital and manage investors online. However, with this evolution has come greater differentiation between crowdfunding platforms concerning their fees, yields, risk and growth potential.
Taking a chance on real estate-crowdfunding has paid off for Mainstreet, a full-service developer of transitional care properties. And Scott White can’t wait to talk about it at IMN’s Second Annual Crowdfunding Forum for Real Estate West, which takes place in Santa Monica on September 16 and 17.
Health Care REIT Inc. (NYSE: HCN) has purchased Stonecroft Health Campus, a skilled nursing facility in Bloomington and the first-ever seniors housing community built using a crowd-funding platform, for $18.1 million.
The team at Portland real estate startup CrowdStreet is celebrating a win this week with its first sale of a development that was crowdfunded on the site. This week, Stonecroft Health Campus, a senior care facility that was crowdfunded through CrowdStreet and developed by the firm Mainstreet, was sold to Health Care REIT (NYSE: HCN). The sale generated an estimated 14 percent return for investors, matching the target stated in the crowdfunding campaign. The deal serves as an iconic affirmation of CrowdStreet's business model.
CrowdStreet, a crowdfunding platform enabling commercial real estate developers and operators to efficiently and effectively acquire, convert and manage investors for their projects, today announced the sale of Stonecroft Health Campus, a senior health care property crowdfunded through CrowdStreet’s marketplace and developed by Mainstreet, a developer of transitional care properties. Stonecroft Health Campus, located in Bloomington, Ind., generated a 14 percent annualized return on investment to investors.
In his annual letter to shareholders this year, JP Morgan’s Chairman and CEO, Jamie Dimon, warns those involved in traditional banking and lending that “Silicon Valley is coming.” According to Dimon in his message to JP Morgan shareholders, young financial technology (fintech) startups offering an alternative to traditional banking are already disrupting the lending business through their innovative and efficient solutions. This phenomenon is now heating up the competitive landscape of the industry.
Back in May, I published a completely subjective ranking of the “Top 10 Disruptive Forces in U.S. Commercial Real Estate.” These disruptors included such usual suspects as energy sector vagaries and the growth of the tech sector, but also included one or two items that are relatively recent to such rankings. Most notably, we included (at #10, but still…) crowdfunding as a dynamic and important disruptive force in 2015’s commercial real estate sector.
Real estate crowdfunding regulation has brought the world of private real estate online and opened it up to everyone. While this fragmented investment space is slowly becoming more transparent, it’s still challenging for non-real estate professionals to make informed investment decisions.
In mid-June of 2015, the SEC finally implemented part of its long promised reform rules, called regulation A+. Many in the real estate crowdfunding press predicted this would be a momentous event, because it would allow nonaccredited investors to invest for the first time. However, once again, the SEC has disappointed the optimists, and created regulations that are too crippled to be useful to the industry. Most sites say they will not be able to use it to open up to nonaccredited investors, leaving them "out of luck" again.
Section 15(a)(1) of the Securities Exchange Act of 1934 makes it unlawful for businesses to effect transactions in, or to induce the sale of any security, unless registered as a broker-dealer. Many people assume that funding platforms under Title II of the Jumpstart Our Business Startups (JOBS) Act must also register as a broker-dealer or become a branch office of one. They are wrong. And making an expensive and unnecessary mistake in that assumption.