Top 5 Take-Aways from IMN’s Winter Forum On Real Estate Opportunity & Private Fund Investing

IMN held their Winter Forum at the end of January for 800+ participants including funds, developers, LPs, law firms, accounting firms, technology firms. This article summarizes the top five take-aways from the event as observed by CrowdStreet Co-Founder Darren Powderly.

At the end of January, I had the great pleasure of attending IMN’s Winter Forum on Real Estate Opportunity & Private Fund Investing in beautiful Laguna Beach, CA, along with CrowdStreet’s VP Sales Dan Laun and VP Investments Ian Formigle.

This was CrowdStreet’s second year at IMN, and it proved to be a fantastic opportunity for us to demonstrate our growing platform and how CrowdStreet has emerged as a leader in online investing for commercial real estate.

Here are our top five takeaways from the IMN event:

1. Despite current stock market correction anxiety, 2016 will be another good year for CRE investing. With a few regional exceptions, fundamentals are in place for continued economic expansion, job growth and CRE appreciation. Caution should be applied to primary cities where CRE values are at historical highs.

2. A cautious approach to underwriting is increasingly important in order to avoid overpaying for assets. In certain markets and property types we are past peak pricing while in other markets we remain in the expansion phase of the economic cycle. Therefore, stress testing pro-forma assumptions and exit cap-rate scenarios is an essential exercise.

3. Capital remains plentiful for large CRE investments. However, capital is selective in secondary and tertiary markets as well as for small balance CRE deals. Bank financing restrictions has created a larger equity gap which needs to be filled by mezzanine debt, joint venture or common equity.

4. While stabilized income and value-add projects continue to capture most of investment activity, new ground-up development is finally picking up as the availability of vacant space in existing buildings continues to shrink. Developers are busier than they have been since 2006, trying to get projects out of the ground while the economy is in expansion mode and unemployment rates continually drop. Speculative development remains scarce except in the hottest markets.

5. Online-fundraising has emerged as a viable method of capitalizing a CRE investment. The leading crowdfunding portals coupled with do-it-yourself technology solutions have driven many innovative CRE investment firms to the internet to access the 9 million U.S. accredited investors. New legislation in 2016 will open access to unaccredited investors, a move that will further accelerate online-fundraising for CRE.

Related content >

All information provided through the education center is for educational purposes only and does not constitute investment, legal, or tax advice, or an offer to buy or sell any security or investment product. The information contained herein has been obtained from sources we believe to be reliable but is not guaranteed as to its accuracy or completeness. The articles in this education center are written by employees of CrowdStreet and have been prepared solely for informational purposes. Any videos presented are for educational purposes only and do not constitute investment advice. Whenever there are hyperlinks to third-party content, this information is intended to provide additional perspective and should not be construed as an endorsement of any services, products, guidance, individuals or points of view outside of Crowdstreet. All examples are hypothetical and for illustrative purposes only.