The assumption that the path to high realized portfolio returns is simply the sum of a series of high individual targeted returns is a recipe for disaster. Despite this, it is tempting for investors to take information at face value. This is why it is common for less sophisticated investors to fall prey to what I refer to as the “Returns Fallacy”. In this article we describe the Returns Fallacy and describe techniques investors can use to improve their realized investment returns.
Knowledge leads to informed decision making. Expand your understanding of commercial real estate with the articles, videos, whitepapers and curated links in the CrowdStreet Education Center. Learn more about the terms used in our glossary.I’m looking for:
UD+P is a vertically-integrated sponsor specializing in renovation and new construction in urban settings with a goal of enhancing the unique characteristics of each neighborhood and community. UD+P came to CrowdStreet looking to modernize their existing capital formation and investor management processes. CrowdStreet Sponsor Direct provided UDP with a secure online portal featuring a transaction center, investor reporting and communication tools which signifcantly streamlined their investor management process. UD+P's Investor Communications Manager, Tina McNearthney explains the positive impact this has had on their investor management and overall investor satisfaction.
Guerrilla Development is a real estate company focused on creating inventive and experimental commercial real estate projects. Guerrilla came to CrowdStreet in 2016 while planning the Regulation A+ capital raise for their Fair-Haired Dumbbell office development and they were in urgent need of a software solution that could handle online solicitation of the project as well as the expected heavy volume of investor transactions. Guerrilla selected CrowdStreet Sponsor Direct to manage these backend tasks and was very pleased with the results, as Guerrilla Development's owner, Kevin Cavenaugh, explains.
Non-traded REITs have come under fire recently for high fee structures and front-end loads that have sometimes exceeded 10-20%. However, if these high fees are removed, the Non-Traded REIT investment structure itself may provide significant potential benefits to investors. In this article we highlight the potential investor benefits of the “next generation” of low-fee, non-traded REITs.
Vesta Hospitality, established in 1996, is a respected hospitality industry leader offering a complete range of services including management, development and acquisitions. They came to CrowdStreet in 2014, interested in experimenting with online capital formation. CrowdStreet Sponsor Direct provided them with a powerful online funding portal which was directly integrated into their existing website. The engagement was highly successful and had a sigificant impact on how Vesta approaches capital formation, both online and offline.
The 2017 edition of Emerging Trends in Real Estate® (“Emerging Trends”) was published on October 26th in conjunction with ULI’s Fall Meeting in Dallas, TX, which CrowdStreet participated in as a sponsor and panelist. Emerging Trends is a trends and forecast publication now in its 38th edition, and is one of the most highly regarded and widely read forecast reports in the real estate industry. It provides an outlook on real estate investment and development trends, real estate finance and capital markets, property sectors, metropolitan areas, and other real estate issues throughout the United States and Canada. In this article, CrowdStreet will provide its thoughts on some of the most pertinent highlights of this year’s publication.
Investors often approach a deal with the same fundamental question – what’s the bottom line return? Yet the answer to that question is not always simple. There are different metrics that paint a picture as it relates to: 1) exactly how much will an investment pay out; and 2) when an investor is likely to see all or part of that return in their hands. While we published an article earlier this year on the definition of cash-on-cash returns, we now take the next step. In this article, we begin by revisiting the definition but then move on to highlight the differences between cash-on-cash yields and cash distribution yields.
We walk you step-by-step through a successful raise on the CrowdStreet Marketplace.
A commercial real estate transactions is complex, multi-step process. The benefits to investors of understanding the commercial real estate transaction process are 1) understanding the level of uncertainty at each phase of the transaction process and how execution risk diminishes over time 2) learning to better discern sponsors’ expertise and 3) gaining an appreciation for the amount of work involved for sponsors to bring deals to investors. In this article, we kick off the first of a three-part series on the commercial real estate transaction. Part I will cover the steps from developing an investment thesis to acquisition award (or “winning” the deal).
Oakland’s Uptown neighborhood is in the midst of an major urban renaissance. Capitalizing on an amazing Bay Area location with mid-20th century roots as a shopping and entertainment destination, Uptown Oakland is rapidly refashioning itself into a vibrant “live, work, play” environment replete with great food, jobs, and an arts & culture scene. This renaissance has positioned it in 2016 as, arguably, the hottest neighborhood in the entire Bay Area. From a real estate perspective, this transformation – along with a growing population of Millennials – has landed Uptown firmly on the radar of office users and real estate investors. In this article we highlight the many catalysts driving Oakland’s recent emergence, assess Oakland’s investment opportunities particularly across the Office property class, and provide details on how investors can capitalize on this generational urban renaissance.
A capital call is a legal right granted to the manager of a partnership or fund to compel additional capital contributions from investors (aka: limited partners). Additional capital contributions or, unforeseen capital calls, grant the sponsor or general partner the power to go back to investors and ask them to put more money into an investment on top of their existing equity commitment. Unforeseen capital calls are a relatively rare occurrence, but since they can occur (and often did occur during the Great Recession), they are worth discussing openly rather than simply hoping they never happen. The right to issue a capital call is standard in almost every private equity real estate partnership or joint venture agreement. Therefore, it is important for investors to understand why they exist, how they are used and what an individual’s options are in the event they occur.
How Denholtz Associates Transformed Their Fundraising Process Using CrowdStreet Sponsor Direct
Senior housing is a niche property type that has moved into the mainstream of commercial real estate investing in recent years. Both institutional and private investors have been expanding into senior housing, in large part due to the powerful demographic trend of an aging baby boomer population. In addition, the recent economic recession provided further evidence that senior housing tends to be a more resilient real estate property type that doesn’t experience the same level of occupancy swings as other asset classes during economic downturns. In this article, we will provide an asset class overview, highlight recent changes in use and conclude with thoughts on how investors can use this information to make informed investment decisions.
Self-storage is a unique asset class. It has a reputation of providing relatively high yields and has also been potentially resistant to recessions due to its lower declines and default ratios vis-à-vis other asset classes. Based on our research, publicly traded self-storage REITs have been one of the top performing sectors in recent years with a good track record of delivering potential dividends and stock appreciation. In fact, our research indicates that the industry has been considered by Wall Street analysts to be “recession resistant” based on its performance during the last economic recession. In this article, we will provide an asset class overview, highlight recent changes in use and conclude with thoughts on how to use this information to make informed self- storage investment decisions.
Real estate crowdfunding excels at raising capital and securing new investors for sponsors. Investor Relationship Management (IRM) software enables sponsors to streamline the management of large numbers of investors. Combining the two solutions creates a competitive advantage for real estate sponsors; an integrated platform that they can use to rapidly grow their investor networks while also modernizing fundraising and investor management processes. In this article we give an overview of online capital formation and IRM solutions, highlight the synergistic benefits delivered by platforms that integrate the two solutions, and provide several examples of how real estate sponsors are using these platforms to significantly scale their investor networks while streamlining fundraising processes.