Investments Managed on CrowdStreet Platform Grow 4x to $4.2 Billion in 2017,
While Number of Participating Investors Double
PORTLAND, Ore. – November 7, 2017 – CrowdStreet, provider of the leading commercial real estate investment platform for investor acquisition and relationship management, is making its commercial real estate investment marketplace for In 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 and investors a reality. CrowdStreet, a pioneer in this space, is putting the power in the hands of consumers and providing investors with a superior way to build wealth through commercial real estate. Historically, investors have been unable to directly invest in commercial real estate offerings and have paid exorbitant fees to access market offerings. At the same time, the developer and operator community, known as sponsors, have had to rely on spreadsheets and manual processes to manage their investor base, which has hampered their ability to scale and grow. With offerings for both investors and sponsors, CrowdStreet has created efficiencies that break down these barriers for commercial real estate investing, significantly reducing fees and lowering the time it takes to close transactions.
With its innovative integrated online investor marketplace and software as a service (SaaS)-based investment lifecycle management solution, CrowdStreet has increased investment dollars managed on its platform by 4x, reaching $4.2 billion in 2017, and doubled the number of investors year-over-year to more than 61,000. These results signify a major shift in confidence in online commercial real estate investing as this infographic illustrates.
CrowdStreet Automates Commercial Real Estate Investing in 2017
“Individuals have become accustomed to leveraging the internet to make investments and track their progress. But there wasn’t a comparable platform for those interested in investing directly in commercial real estate,” said CrowdStreet CEO Tore Steen. “Technology and automation are making it possible for the commercial real estate market to now join other financial sectors. CrowdStreet’s platform is playing a key role in this transformation, enabling companies to attract a wider base of potential investors, lower the hurdles to investing for investors, and drive greater efficiency in the commercial real estate funding lifecycle.”
During the past year, CrowdStreet has launched new products and features that have helped propel the usage of its platform, increased opportunities for firms to expand their universe of potential investors and generated significant returns, while improving the user experience for investors:
- New management console: A complete user interface revamp providing a premium user experience.
- Expanded CRM functionality: New features and a modern user experience that provide more tools for relationship management and investor engagement, enabling firms to better manage the investment lifecycle.
- Enhanced marketing solutions: Powerful and modernized email tools, such as HTML emails, secured attachments and delivery statistics, which enable sponsors to better engage with investors.
- Expanded and streamlined the capabilities of CrowdStreet’s automated offer submission process: Multi-signer DocuSign support and online ACH payment processing speed up the time to close.
- Added product features for financial advisors: Digitizing document distribution improves investor engagement and saves firms time and money.
In 2017, CrowdStreet’s technology platform has seen more than $745 million distributed back to investors, a 3x increase from $245 million last year. The marketplace investment run rate also grew by over 3x reaching $250 million of equity raised this year, compared to $76 million in 2016.
Laws Enable Innovative Companies Like KBS to Go Digital
New laws enabling commercial real estate companies to use the internet to market directly to investors have dropped barriers to entry, resulting in significantly reduced fees for direct-to-investor models. An internet-based platform, like CrowdStreet’s, offers companies an efficient way to extend their reach and draw in new investors at lower minimums and lower costs, while providing access for more people to invest in commercial real estate projects. This new model removes the middleman, which reduces costs and provides an unprecedented degree of deal transparency.
A recent case in point is KBS, one of the largest and most respected commercial real estate companies in the United States, which recently announced its direct-to-investor online platform – KBSDirect.com – for accredited investors and advisors, powered by CrowdStreet’s software platform. KBS is applying CrowdStreet’s technology with KBS’s 25-year history and $34 billion-plus track-record of acquiring and managing institutional real estate assets to offer the $500 million KBS Growth & Income 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 directly to investors and their advisors. KBS Growth & Income REIT already owns nearly $150 million in commercial office properties in Portland, Ore.; Irvine, Calif.; and Houston, Texas; and has more acquisitions pending.
“We are very pleased to have worked with CrowdStreet on KBSDirect.com in making KBS Growth & Income REIT available for direct investment by accredited investors and their advisors in a professionally managed portfolio of institutional-quality commercial real estate assets with no loads or upfront fees,” said KBS CEO Chuck Schreiber. “Across almost every investment sector, online platforms have increased transparency and reduced transaction costs. Now, by combining the innovative structure of KBS Growth & Income REIT with new technology, we have been able to do the same for the commercial real estate sector.”
Growth Continues into 2018 with Expanded Team and New Advisors
CrowdStreet, the only company offering solutions for both investors and sponsors, continues to add to its strong foundation, which will help it maintain its market leadership and meet current and potential market demands. Today, the company also announced the appointment of two new senior executives and the formation of an advisory board, which is comprised of members with broad industry expertise who will offer strategic guidance to support CrowdStreet’s continued growth.
“Direct investing in commercial real estate is inevitable, and technology platforms like CrowdStreet’s will enable it to scale on a global basis,” said Christopher Keber, a former senior managing director at Hines who is now a CrowdStreet advisory board member and serves as head of investments and strategy at McCourt Global. “CrowdStreet is getting better sponsors and better offerings, which attracts more, high-quality investors. The platform is an amazing way for investors to get access to assets of this type, which was previously unavailable to them.”
CrowdStreet is a financial technology (fintech) company that is transforming the $15 trillion U.S commercial real estate industry through its innovative and integrated approach to online fundraising and investor lifecycle management. CrowdStreet solutions allow real estate developers and operators to accelerate their fundraising processes while achieving enhanced visibility and control over all aspects of investor relations and lifecycle management. Sponsors are able to use the CrowdStreet Marketplace to gain instant access to a nationwide audience of accredited investors. Enterprise-level sponsors are able to present investment offerings to their existing investors under their brand and through their own website by deploying CrowdStreet investment management software. Both solutions democratize access to commercial real estate investment opportunities by connecting accredited investors, family offices and institutions directly with real estate sponsors for no-fee co-investing with a modern digital portfolio management experience. Headquartered in Portland, Ore., CrowdStreet was founded in 2013 by a senior leadership team with over 80 years of combined experience in commercial real estate, software development and private equity. For more information, please visit www.crowdstreet.com.