CrowdStreet is excited to announce that we have reached a significant industry milestone with more than $2 billion raised across 500+ real estate deals, including single-asset projects and funds, by individual investors using the CrowdStreet Marketplace.
The $2 billion milestone comes as 2020 proved to be the most successful year ever for CrowdStreet, with individuals investing $641+ million on the platform, nearly three times more than was invested in 2018 ($229+ million) and almost 12 times more than just five years ago ($49+ million).
Investors on CrowdStreet have now funded more than 500 deals in 39 states (including Washington D.C.) across 14 asset classes and 24 asset types. The average deal value (total project capitalization) has increased almost fourfold from $20 million in 2014 to $78 million, reflecting our focus on institutional-quality properties. The total market capitalization of all deals on the CrowdStreet platform since inception is $20.9 billion and individual investors have received more than $220 million in distributions from project sponsors, with 54 fully realized deals to date.
"We’ve proven the concept, become the industry leader, and are growing rapidly as a result of the multiplier effect, with more sponsors bringing us more diverse and larger deals, and quickly becoming the destination for investing in real estate projects across the CrowdStreet platform. Crossing the $2 billion mark for investments is a significant milestone, not only for CrowdStreet but for the real estate industry as a whole. As real estate sponsors continue to move their fundraising operations online, and as more investors expect more online investing options and tap into them, we provide the perfect place for those worlds to come together," said Tore C. Steen, CEO of CrowdStreet.
A Deeper Dive Into the First 500 Deals
- The average equity raise (per project) on CrowdStreet increased to almost $7 million in 2020, as compared to $4.5 million in 2019 and $2.2 million in 2018.
- The largest equity raise to date was $34.5 million.
- The top state for deals is Texas, with 92 deals and $340 million raised for projects in the state.
- Investors in California have invested the most into deals, with $384 million dollars invested by people in the state.
- The average amount invested by individual investors is $134,000, with the amount increasing consistently year over year. 59% of investors are repeat investors who invest, on average, roughly $250,000.
- The most popular asset class (as a percentage of the overall number of deals) is multifamily.
- Other niche asset types on the platform have included a charter school, a cannabis fund, and data centers.
CrowdStreet Takes the Lead in Dollars Raised
Based on dollars invested by individual investors, CrowdStreet has been recognized as the leader in online commercial real estate marketplaces by Adam Gower Ph.D., an industry authority and author of the recently published book, Real Estate Crowdfunding Unleashed. In first-of-its-kind research, Real Estate Crowdfunding Unleashed documents the growth of online syndication and crowdfunding marketplace activity based on data collected from the SEC
Gower has been tracking the crowdfunding market since its inception and examined over a million data points pulled from the SEC to illustrate how crowdfunding has gone mainstream in private equity real estate finance by making it substantially more efficient and easier for sponsors to raise equity for projects and giving the average investor access to an asset class that historically was reserved for a small privileged few.
Gower has discovered that in just seven years since the JOBS Act of 2012 was promulgated, crowdfunding has grown to represent nearly 25% of all private equity capital raises for commercial real estate in America, with crowdfunded deals reaching $15 billion in 2020 (up from $7 billion in 2019), an all-time high.
Of all marketplaces specializing in commercial real estate, CrowdStreet stood out to Gower as the industry leader and the largest based on dollars raised on its marketplace. “In a milestone for the industry, CrowdStreet has become the first online commercial real estate investment marketplace to raise $2 billion in equity from individual investors,” said Gower. “This is an extraordinary achievement for an industry just seven years old and for a company that had ‘only’ raised $200 million four years ago.”
Online Investing Becomes the Standard
"As someone who has invested in real estate deals of all forms, the CrowdStreet approach has become my go-to marketplace for several reasons including the company's sponsor screening process, diverse deal flow across all types of geographies and asset types, and more generally, just the insights they provide into each of the offerings. I like that I can start with a small investment as I get to know a sponsor and build confidence to go bigger later on while also building out my portfolio across a number of actual physical real estate projects,” said Vipanj Patel, an investor on CrowdStreet and former venture capitalist. “It is not surprising to me at all that ‘crowdfunding’ is on track to overtake traditional syndication and that CrowdStreet is leading that change given their evaluation practices, long-time industry expertise and track record."
Destination for Real Estate Sponsors Sourcing Equity Capital
New and seasoned sponsors are turning to CrowdStreet to raise capital, expand their direct networks of and relationships with investors, and improve the efficiency and consistency of their investor relations. “Online syndication is now something we consciously consider as part of the capital stack for every deal,” said David B. Pollin, Co-Founder and President of The Buccini/Pollin Group. “The industry has come a long way since the JOBS Act, thanks in large measure to CrowdStreet, which has stayed focused on creating a platform for institutional-quality property sponsors and individual investors to come together. But while the industry has come a long way, the industry is still in the early innings of scaling up to realize the full potential for online capital raising and investing.”