Many new investors have questions about the timing and speed of the Marketplace’s investment process. And if you’re used to the public equity markets, we get it–success can be measured in milliseconds.
But becoming a limited partnerA limited partner is a business partner whose liability is limited to the amount of their investment in the company. They are also known as silent partners and their income is considered as passive income by the IRS. On the CrowdStreet marketplace, our investors are limited partners.... More in a CrowdStreet commercial real estate offering takes considerably more time than buying public stock, and there is typically no need to rush your due diligence process or scramble to get your documents in order before submitting an offer.
We have an Evaluation Period, usually about three days long, that starts when a new offering is added to the Marketplace and ends when we start the live sponsor-led webinar. This window gives you time to review the offering’s details and documents, plus indicate your interest in investing. If you indicate your interest in the property, we’ll email you right before the webinar starts so you can log in and submit your offer once the investing window opens. We developed this practice to help ensure that you have time to decide if a particular opportunity is right for you and your portfolio.
When you submit an offer, it is quickly checked against the equity allocation to make sure there is space available in the deal, and then it is pre-approved by the CrowdStreet team. Once your offer has been pre-approved, you typically have about five days to complete the action items in your CrowdStreet Transaction Center. (We are happy to make accommodations for investors who may need extra time due to extenuating circumstances; in that case, just reach out to our Investor Relations team.)
It’s important to note that, once the investing window opens, some deals may subscribe rapidly due to high investor demand. Some deals may even oversubscribe. OversubscriptionA commercial real estate offering is “oversubscribed” when the investor funds offered exceed the total equity the sponsor was looking to raise. Essentially, it means there is more demand than supply. To help reduce the rate of oversubscribed offers on the marketplace and ensure that all investors have equal opportunity of access to sponsor deals, CrowdStreet instituted a three-day waiting... More is when the total amount of offers exceeds the equity allocation available for CrowdStreet investors. If this happens, not all investors with approved offers will be accepted into the investment. CrowdStreet typically accepts offers in excess of 5 -10% of the total equity allocated to Marketplace investors to account for investor attrition (those who make an offer but ultimately decide not to fund).
We always strive to proactively communicate with investors in any situation where there might be any urgency (or benefit) in completing your documents and funding early. Our goal is to give you ample time to complete your due diligence and documents, and ultimately, to fund your investments.
