Capital has been pouring into private equity real estate funds globally, and now accredited investors can more easily access those funds via CrowdStreet’s online platform.
The CrowdStreet platform has been built on the simple premise that we believe that direct investment in real estate represents a great opportunity to build wealth. Sound real estate investments can generate attractive yields and add to portfolio diversity. Initially, our platform has focused on opportunities to invest in individual properties, such as an apartment complex or office building.
One of the big advantages of real estate funds is that they spread investment risk across multiple properties. So, rather than putting all of your eggs in one basket with a single office building in Orlando or a shopping center in Phoenix, an investor can buy a stake in multiple properties that might be located in multiple cities. Essentially, individual accredited investors are in a joint venture equity opportunity investing along with other co-investors. At the same time, an investor’s minimum investment amount for buying a stake in a portfolio of properties could be exactly the same as the buy-in for an individual property.
It is important to note some of the key differences in investing in a private equity real estate fund as opposed to other alternatives such as buying Modeled after mutual funds, a REIT (real estate investment trust) is a company that owns, operates or finances income-producing real estate. They allow individual investors to buy shares in commercial real estate portfolios.... More stocks. Private equity real estate funds are generally headed by a fund manager or managers that acquire and manage the properties. Oftentimes, these funds have a narrow focus or follow a specific investing strategy, such as buying Class A office properties or net lease retail properties in major metros.
In comparison, when one buys stock in a REIT he or she is buying into the entire portfolio of properties that a REIT owns, as well as buying a stake in the REIT as an operating company. In addition, investors in REIT stocks do not participate in the depreciation of the underlying real estate assets.
Again, we at CrowdStreet believe that real estate is a great addition to investment portfolios. Through our selection of direct investment in individual properties and now the addition of private equity real estate funds, we aim to give investors more choices and more opportunities to diversify their investment portfolios through quality real estate investments.