In an interview with Benzinga, CrowdStreet’s Shawna Wright-Smith and Tore Steen discussed how their platform strives to democratize commercial real estate endeavors through crowdfunding.
Founded in 2012, founders Steen and Darren Powderly took advantage of regulatory maturation.
Title II of the Jobs Act signed by President Barack Obama improved access to commercial real estate opportunities, allowing investors, through platforms like CrowdStreet, to crowdfund commercial real estate projects, removing the need for private offerings.
How The Platform Works
Through the online marketplace, investors, on their own, or under the guidance of the included advisory service, diversify their portfolios with allocations in funds or individual deals.
In accordance with Regulation D of the Securities Act, CrowdStreet facilitates non-advisory investment into commercial real estate by accredited investors that meet the necessary capital requirements and risk tolerances.
Non-accredited investors may also invest, under Regulation A+, in occasional investment opportunities.
The company's primary components are the posting platform, transaction center, investor room and management portal.
With those, users manage all aspects of investing with regard to solicitation, documentation, verification, funding, risk analysis and the like.
Plans to scale and expand scope are front and center for CrowdStreet.
The company is seeing interest from the wealth management sector, Steen said.
“They are looking for differentiation; they are looking for something unique they can bring to their clients, and that will kind of be a big part of our next phase.”
CrowdStreet’s ability to “listen to both sides and what their needs and desires are” is a key differentiator, Steen said.
With that, the platform has introduced features like portfolio blending and balancing.
By evaluating risk-reward profiles, investors can diversify their portfolios by participating fractionally in numerous commercial real estate projects.
Further improvements are planned alongside the growth of regulations and technologies like blockchain, CrowdStreet's co-founder said.
"Blockchain, as a technology platform and what it can enable, is significant. I believe that blockchain will be a part of commercial real estate investing, turning an illiquid investment into a more liquid investment," Steen said.
Steen and Wright-Smith said there are three key reasons why CrowdStreet is a go-to platform: its expertise, track record and innovation.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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