Realquidity Wants To Be The Nasdaq Of Real Estate

Realquidity, a new online marketplace for buying and selling commercial real estate, has one goal in mind: it wants to be the Nasdaq of the real estate industry.

Founded by Shawn Silk and Harris Ross, Realquidity has been in stealth mode for more than two years. The site officially went live today and is ready to bring together property owners and accredited investors.

"[Realquidity] is a marketplace where you can sell fractional interest in a building," Silk, who serves as Realquidity's CEO, told Benzinga. "If [someone] wants to sell a fractional interest in a property, they can increase their chances of getting market value for that."

In turn, investors can buy a small percentage of the property and start earning monthly income. The property may also appreciate, allowing investors to earn a profit when they sell their fractional interest.

"We have contracts that, if a minority percentage of a building is sold, there are certain rights associated with that," said Silk. "The minority owners know they are not going to have the say of majority ownership, just like a corporation. There are certain things they get to vote on. They may not have control over it but they still get to have a voice if the building got sold."

Realquidity is working with Emerson Equity, the same broker-dealer that works with SharesPost.

"We're largely allowing accredited investors to come in to the system," Silk added. "There's a certain level of criteria we're adhering to right now. All that information is available to investors when they look at the deals. They can vote on everything, but no, if you're buying a minority share, you're not going to have total control over the building."

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Turning A Profit

How much can an investor expect to make from Realquidity? Profit and risk varies with the market and the location, but Silk said that all of the assets have cash flow associated with them.

"They're gonna pay a certain yield," he said. "It depends on where the property is located -- it's gonna fluctuate geographically. An apartment building in San Francisco might be more expensive than an apartment building in Seattle."

Using San Francisco as an example, Silk said that a property owner would be paid $600,000 a year on a $10 million building that provided a 6 percent yield.

"Anyone who buys [a fractional interest] would get a pro rata distribution of their rental income," Silk explained. "So if it's 6 percent and someone owns $50,000 worth, effectively, they're getting $3,000 of rental payments that's gonna be returned to them."

Real estate is not a foolproof investment, however. Ross (who heads up product and strategy) told Benzinga that "just like any investment, there's market volatility and the asset value can appreciate or depreciate, depending on market conditions."

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.