Plan for $170-Million Series of Diversified Commercial Real Estate Investment Products Unveiled Today
-More choices: Invest directly in CrowdStreet’s individual properties or diversify broadly with a Blended Portfolio investment
-One-click to invest in 30-50 CrowdStreet marketplace offerings beginning today
PORTLAND, OR (October 17, 2018) — CrowdStreet, which operates the largest and most diversified online marketplace for direct equity investment in U.S. commercial real estate, is now raising $25 million for the company’s first CrowdStreet Blended Portfolio investment offering. To provide individual investors and registered investment advisors another way to diversify their investments with commercial real estate, the company plans a series of diversified and specialty portfolio investment options that will collectively raise and invest up to $170 million.
The first CrowdStreet Blended Portfolio’s proceeds will be deployed across 30-50 pre-vetted projects on the CrowdStreet marketplace, representing a broad range of commercial and multifamily asset types, risk profiles and geographies.
“Our investors have seen incredible returns on our marketplace, and we’re now opening up this asset class to new people with unprecedented simplicity and transparency,” said Tore Steen, CrowdStreet CEO. “Undertaking your own due diligence as a first time real estate investor can be daunting. Even for those familiar with the market, the race to review and invest across so many deals can be hard. Our new Blended Portfolio brings further simplicity, and investors and their advisors can access a wide range of pre-vetted and sought-after CrowdStreet marketplace offerings without the need to review and invest on an individual property basis. It’s diversification with one click at a low cost.”
The CrowdStreet Blended Portfolio simplifies investing in commercial real estate and opens the door for more people to access the market with diversification, which minimizes risk. The Blended Portfolio is a direct response to identified needs from both existing and prospective investors, as well as registered investment advisors who recommend that clients allocate a portion of their assets to institutional-quality commercial real estate.
More than 100,000 investors and more than 250 real estate operators and developers are on the CrowdStreet platform. Since inception, more than $8.5 billion of commercial and multifamily properties have been listed on the CrowdStreet marketplace, which makes private equity real estate investing accessible to millions of people.
Notably, CrowdStreet focuses on the so-called “middle market” of properties valued between $15 million and $50 million, a market underserved by large financial institutions, which helps create robust opportunities for private investors to fill equity gaps with the potential for above-average risk-adjusted returns. Since inception, fully realized offerings on CrowdStreet have produced an average annualized return of 36.3% The xIRR is a way of calculating the IRR for a series of cash flows that may not be periodic by assigning specific dates to each individual cash flow. xIRR is a complicated calculation done in Excel or other financial modeling software. The main benefit of using the XIRR Excel function is that these unevenly timed cash flows can be... More and a 1.6x In commercial real estate, the equity multiple is defined as the total cash distributions received from an investment, divided by the total equity invested. Essentially, it’s how much money an investor could make on their initial investment. An equity multiple less than 1.0x means you are getting back less cash than you invested. An equity multiple greater than 1.0x means... More on a 1.9-year holding period.
“The benefits of the new Blended Portfolio series extend to both sides of our marketplace, as the demand for diversified investment products is expected to raise more capital on the CrowdStreet platform, helping In commercial real estate, the sponsor is an individual or company in charge of finding, acquiring and managing the real estate property on behalf of the partnership. The sponsor is usually expected to invest anywhere from 5-20% of the total required equity capital. They are then responsible for raising the remaining funds and acquiring and managing the investment property’s day-to-day... More hit targets sooner and with greater certainty,” Steen says. “Removing friction from individual investors seeking diversification and from project sponsors seeking capital will accelerate growth of the marketplace as investors and sponsors build wealth together at a time when diversification is especially important.”
Fast Facts on CrowdStreet Blended Portfolio 1, Series I
- Capitalization: Up to $25 million
- Individual Asset Value: Properties between $15 million and $50 million
- Strategy: Blended portfolio of up to 50 offerings on the CrowdStreet marketplace
- Risk Profile: Core commercial real estate investments are the least risky offering. They are often fully leased to quality tenets, have stabilized returns and require little to no major renovations. These properties are often in highly desirable locations in major markets and have long term leases in place with high credit tenants. These buildings are well-kept and require little to no improvements... More, Core Plus, Properties are considered value-add when they have management or operational problems, require some physical improvements and/or suffer from capital constraints. By making physical improvements to the asset that will allow it to command higher rents – remodeling the kitchens in multi-family, installing more energy efficient heating systems in a medical office, etc. – improve the quality of tenants and increase... More, and Opportunistic real estate investments are the most high risk/high reward investment opportunities, requiring major development work. Opportunistic properties tend to need significant rehabilitation or are being built from the ground up. They have the chance to reach the highest rate of return for investors, but they little to no in-place cash flow at the time of acquisition and have the... More
- Geography: Mainly secondary markets across U.S.
- Target investment period: 5-10 years
- Target The Internal Rate of Return (IRR) is the rate at which each invested dollar is projected to grow for each period it is invested. It differs from other metrics in that it accounts for the concept of the “time value of money”, or the fact that a dollar received and reinvested elsewhere today is worth more than a dollar expected... More: 16%-18%
Learn more on the CrowdStreet website at the Blended Portfolio page, available here.
CrowdStreet is the premium provider of online commercial real estate investment marketplace, technology and professional services. Investors can directly access institutional-quality commercial real estate offerings with CrowdStreet’s online investing platform. For CRE developers and operators, CrowdStreet Connect provides a platform to manage investors and investments, and to raise capital to grow their businesses. CrowdStreet maximizes opportunities for investors by diversifying outside of the traditional avenues of the stock market, better distributing risk and fundamentally transforming real estate investing through technology. Together, CrowdStreet is creating a community where individual investors and CRE firms are working together to maximize wealth through commercial real estate. The CrowdStreet senior leadership team has 120+ years of combined experience in real estate, technology, online marketing and private equity. For more information, please visit www.crowdstreet.com.
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