This article is the final in a three-part series with CrowdStreet executives Tore Steen, Darren Powderly, and Ian Formigle, about their roles on the Urban Land Institute (ULI), the world’s largest and oldest network of real estate and land use professionals. Read the first article and second articles now.
How often do these trends and insights from ULI play into commercial real estate opportunities on the CrowdStreet Marketplace?
IAN: The majority of the offerings on our Marketplace are value-addProperties 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. The deal that we recently did in Atlanta, 100 Edgewood, is a vacant, 20-story office tower located in an Opportunity Zone. The sponsorIn 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 is acquiring it for $50/square foot and investing $200/square foot. It will be redeveloped to meet modern levels of sustainability with completely modern ventilation systems, new glass, the works.
DARREN: With CrowdStreet, a large number of people are helping an empty building become a state-of-the-art, experiential real estate property. Our investors will participate throughout the project along with the developer. That wouldn’t have been possible before. If these investors did come across an opportunity to invest, it would have been through a pension where the money would have been extremely diluted through fee levels and middle managers. This is the power of the direct-to-investor model. ULI gives us the support and legitimacy to bring that model mainstream.
TORE: It goes both ways. As ULI members, we’re bringing awareness to developers and operators that there are new ways to raise capital and manage investors. CrowdStreet is transforming their firms and making business easier and more efficient for them. We’re finally realizing the original vision we had when we attended those first ULI meetings years ago. It turns out to be much like constructing a building. Before we could get anything done, we needed to lay the groundwork.
ULI’s 2019 Fall Meeting may be over, but you still have a chance to meet our team on the road. We’re constantly adding new investor meetups and livestreams. Learn more and RSVP to one of our free events.
