IIRR Management Services Discusses RealtyShares Acquisition, Vision for the Future of Real Estate Crowdfunding

IIRR Management Services (IRM) claims to be one of the largest crowdfunded real estate investment firms in the world. IRM is owned by RREAF Holdings and iintoo Investments. The company recently took over management of Realtyshares’​ portfolio – once a prominent entrant in the real estate crowdfunding sector that unexpectedly collapsed in 2018 stunning the industry. Today, IRM claims over $1.5 billion in combined assets salvaged from RealtyShares.

Crowdfund Insider recently caught up with Jeff Holzmann, CEO of IRM and former Chief Operating Officer of iintoo to get an update on the RealtyShares acquisition and the companies vision for the future. Our discussion is shared below.


In the last report, you (via iintoo) had acquired the assets of RealtyShares. How has that worked out? What is the status of that portfolio?

Jeff Holzmann: IRM was founded in equal parts by iintoo and RREAF to serve the existing RealtyShares portfolio. The idea was to help an industry pioneer and one of the largest crowdfunding platforms in the world which had run into difficult times. Since IRM took over day to day management of the RealtyShares portfolio, we have hired experienced asset managers, fund administrators, and customer service representatives. The entire operation has been scaled back in order to cover a more financially sound footprint, and IRM has been able to significantly improve the quality while reducing the cost.

IRM has been able to achieve this because we are not selling anything, we are only focused on asset management. By eliminating all the marketing, sales, and Broker Dealer services, IRM is able to run a successful operation.

IRM does not require any customers to invest with iintoo or RREAF, but many of RealtyShares customers who had a chance to work with the professional services that IRM delivers were impressed enough to choose and invest with iintoo and RREAF directly. The strategy was to have a chance to earn the customers’ trust via performance – which we have been able to do – rather than require anyone to invest in a new entity.

[easy-tweet tweet=”IRM was founded in equal parts by iintoo and RREAF to serve the existing RealtyShares portfolio #crowdfunding” template=”light”]

I see you still maintain the RealtyShares site. What about RealtyShares users. Did they stick with the new entity?

Jeff Holzmann: RealtyShares stopped raising funds about a year ago. IRM was hired by RealtyShares to bring its experience, procedures and systems to manage the existing portfolio. Neither RealtyShares nor IRM solicits the sale of new investments.

Any RealtyShares customer who wants to invest new funds has the option of contacting iintoo and RREAF directly, which many have chosen to do.

Can you provide some insight as to how RealtyShares go into trouble?

Jeff Holzmann: RealtyShares was a pioneer in the space. As an early entrant, it did a very good job in creating a brand and powering marketing efforts that translated to leads and then sales.

RealtyShares experienced rapid growth fueled by venture capital, which also resulted in pressure to show top-line growth. It appears that in the rush to grow, less emphasis was placed on professional underwriting, asset management and customer service. This lead to the funding of deals that would not be considered “professional grade,” lax oversight as the number of investments grew into the thousands and inadequate customer service as the number of clients reached tens of thousands.

It is easy to pass judgment in hindsight, but RealtyShares did have a team of professionals working in its underwriting, asset management, and marketing departments.

The simple fact is that not all early-stage players survive the growth stage, and some blame can certainly be placed on the VC funds that pressed for the wrong metrics of growth instead of sustained profitability.

We are seeing this play out now with the WeWork fiasco, and I’m sure we will continue to see it with other startups in the future.

[easy-tweet tweet=”The simple fact is that not all early-stage players survive the growth stage, and some blame can certainly be placed on the VC funds that pressed for the wrong metrics of growth instead of sustained profitability” template=”light”]

What differentiates iintoo management versus RealtyShares?

Jeff Holzmann: iintoo is a “REIMCO,” a Real Estate Investment Management Company, meaning it is focused on managing an investment beginning with a very strong filtering process of which sponsors they even consider.

RealtyShares funded Fast Flips, while iintoo only works with qualified, experienced sponsors.

One excellent example is RREAF, which has transacted with iintoo before.

RREAF is an outstanding real estate developer based in Dallas, Texas, with a very clear and narrow focus on providing housing and hospitality solutions to middle America. RREAF spends a lot of time learning the local market, underwriting the financial model and overseeing construction.

While nothing is guaranteed, the level of risk associated with a professional builder such as RREAF – compared to a one-man-show, buy & flip operation – is significantly lower, making it a much more attractive investment in the long run.

You are only doing single property investments – correct? Have you considered a fund?

Jeff Holzmann: IRM is not soliciting investments at all, we are only focused on asset management for our existing customers and do not accept new investments.

Both RREAF and iintoo offer direct property and fund type investments.

What have average returns been like? What do you expect when we hit a recession?

Jeff Holzmann: Both RREAF and iintoo have an average recent return in the high teens, as they are both top players in their categories. The average return across the IRM portfolio will be much lower. Some deals will deliver impressive double-digit returns, but several will end up returning less than original invested capital, therefore hurting the average.

While IRM may be one of the best asset management companies in the country, we are not magicians and we can’t make money out of thin air.

In some cases, the investment underwriting, execution or market conditions are so negative that nothing can be done. They can’t all be winners in this portfolio, and many investors are now learning the hard way why it is important to invest with professionals that have a strong and long track record.

You have incorporated an equity protection plan. How does that work? What has the default rate been?

Jeff Holzmann: IRM does not sell any investments. To learn more about the EPIC equity protection, you’ll need to contact iintoo directly for comments.

In your opinion, how is the real estate crowdfunding sector evolving?

Jeff Holzmann: Like any new industry, it is shaken up by mergers, acquisitions, crashes, and growth.

I think the dominant factor now is the marketing and branding. We see consumers running to the “next big thing” based on who gets the most media attention or has the flashiest brand. This will fail, for sure, as always.

What customers should be doing is judging by the facts, check for successful track records, professional underwriting and proper asset management.

Unfortunately, we often hear from RealtyShares customers today that they chose RealtyShares based on their ads, and now regret not going to more professional outfit like iintoo or investing with a sponsor like RREAF directly.

[easy-tweet tweet=”We see consumers running to the next big thing based on who gets the most media attention or has the flashiest brand. This will fail, for sure, as always #RealEstate #Crowdfunding” template=”light”]

Assure Services Claims to be the Largest SPV Service in the World and it Has Many Fintech Platforms as Clients

Recently Crowdfund Insider encountered a successful service that is not exactly a high profile business in the Fintech world. Back office fund management provided by Assure Services. What we did not realize is that many Fintech platforms are outsourcing their fund management so they may better focus on what they do best which is frequently raising capital and managing issuers and investors.

Assure Services claims to rank 5th in the world when it comes to funds under management – so it is providing a significant service. Assure also claims to be the largest SPV (special purpose vehicle) manager in the world.

Assure also claims over 30 clients in the crypto market assisting with fund setup and administration (including SPVs) to initial coin offering (ICO) purchases.

Assure helps its clients to lower costs, simplify compliance by allowing a specialized team manage the record keeping, and aiding in the client’s growth as it can rapidly scale as volume increases.

CI recently had the chance to discuss Assure Services with founder and CEO Jeremy Neilson. Our discussion is shared below.


How did you get into the alternative investment management space?

Jeremy Neilson: I was hired to launch and manage the Utah Fund of Funds.  The Utah Fund of Funds is a $300 million State of Utah sponsored fund of funds.

I spent 7 years building the program ultimately winning a number of Best of State awards and become a premium double bottom line program in the United States.   We invested in 28 venture capital and private equity funds across multiple asset classes (VC, Buyout, Energy, Distressed, and more).

When I started Assure, we offered due diligence advisory and investor relations services.

In July 2013, I was contacted by a well-known angel investor platform and [was] asked if Assure could set up fund entities in bulk. I said, “yes,” and we developed a process to provide these services to other investors.

In the space of less than six years, we have grown to more than 200 clients and more than 4,300 deals.

You currently service AngelList, EquityZen and SeedInvest. Can you share any other platform names? Exactly which services are you providing for these platforms? Following SeedInvest’s acquisition – are you still providing services?

Jeremy Neilson: We are still providing services to SeedInvest.

[Other platforms include] FundRx, Propelx, Launch, Forge, EquityMultiple, and SPV Fund Administration services.

How do you see the online capital formation industry evolving?

Jeremy Neilson: I see online capital formation growing and growing.

The rising generation is more comfortable and prefers to invest on their phones.

Newspapers, magazines, in office visits, and even online systems are not part of investors joining the investment community.  Trusted recommendations and ease of use are the two most important factors in deciding what assets to invest in.  Hence, online capital formation will continue to grow.

Speaking about Real Estate specifically, this sector of crowdfunding has seen some high profile failures as well as some resounding successes. What are the differentiators, in your opinion?

Jeremy Neilson: Management is the difference.

Those groups with strong management and smart decisions thrive.  One big management decision is using outsourced administrators rather than build that expertise in house.  The best groups focus on what they do best which are deals and investor networks leaving the other areas like the administration to experts in those areas.

How do you see real estate crowdfunding evolving over time?

Jeremy Neilson: It is my opinion that Real Estate Crowdfunding will become a comfortable and frequently participated in investment vehicle.

Crowdfunding provides the two most important factors to the rising generation, trusted recommendations (who is investing in this deal that I trust) and ease of use (online, simple, fast).

Groups like RealtyShares had a popular product, their struggles were from operations.

What about blockchain (or distributed ledger technology – DLT)? Do you expect wide adoption? And, if so, how soon?

Jeremy Neilson: Blockchain/DLT is an attractive concept but wide adoption is not likely for many years because of the clunky nature of the blockchain … The fact that DLT is not necessary but is a nice to have and because the potential features are futuristic.

Broad use is unlikely until Blockchain/DLT is easier to use and with more features than the current system.

What about liquidity for these alternative investments?

Jeremy Neilson: Alternative investments have zero or limited liquidity options.

Depending on the asset class, liquidity could occur sooner or later.

For example, real estate investments tend to have shorter liquidation horizons then an investment into an early-stage technology company.

Real Estate Crowdfunding: iintoo Acquires RealtyShares Assets

Commercial real estate crowdfunding platform iintoo has stepped up and acquired the assets of defunct platform RealtyShares. Deal terms were not disclosed.

The news was revealed in a release from iintoo.

RealtyShares, previously a leader in the real estate crowdfunding sector, shocked the market when it shuttered its doors in November 2018. Management distributed an email telling site users it had been unable to raise additional capital and had run out of money.

iintoo claimed that RealtyShares was the second largest online real estate investment platform in the US before shutting down.

At the time, the company reportedly had 300 active projects and approximately $400 million in equity from its investors.

Since that date, numerous crowdfunding platforms have reviewed the RealtyShares book but until today no other firm has stepped in to take over the assets.

iintoo said the purchase expands its foothold in the US.

The purchased assets were said to be part of a joint venture, with RREAF Holdings, LLC, that accelerates iintoo’s growth – increasing its portfolio size from $1 billion to $2.5 billion in assets under management.

According to its website, RREAF currently manages a multifamily portfolio consisting of 4,877 units valued at over $1 billion, with properties located primarily across the South, Southeast and Southern Atlantic regions of the United States.

All of RealtyShares’ former and current investors will now have access to iintoo’s platform and investment opportunities.

“We are excited to bring RealtyShares’ investors into our community and offer them professional oversight and management of our highly vetted commercial grade real estate opportunities,” Eran Roth, CEO of iintoo.

Roth said the acquisition was a “watershed moment for iintoo.”

Investment opportunities start at $25,000 on iintoo. Investors also have access to a social community where they can interact and learn from one another and follow savvy investors to see how their investments have performed.

Shoshana Winter, iintoo’s Managing Director in the US, said their vision is to take the success they have seen to date and continue to offer new and alternative asset classes to our expanded base of investors.

“We are confident that our innovative investment platform, our equity protection product and our data-driven, curated approach to delivering premium investment opportunities will make us a leading brand that investors can depend on as they seek new ways to diversify their portfolios.”

ArborCrowd Co-Founder Adam Kaufman on the Future of Real Estate Crowdfunding

Real estate crowdfunding is going through a bit of a transition right now. Some platforms that garnered early traction have dimmed or disappeared while others have emerged to lead the charge as they execute on their chosen business model. ArborCrowd is a platform that has an interesting approach to creating an online marketplace for real estate investment as it is an offshoot of a far larger firm. The company describes itself as the first real estate institution to launch a crowdfunding platform, “opening up [their] exclusive network to a new class of investors.”

ArborCrowd is part of a group of companies which includes Arbor Realty Trust (NYSE: ABR), a publicly traded real estate investment trust (REIT). ArborCrowd prides itself on its selectivity claiming that out of 500+ deals screened in the past year only 7 were selected for their investment offerings. Quality over quantity.

Real estate and crowdfunding remain a bright story of success even while several platforms have shut down. Providing easier access to an asset class that can be difficult to invest in just makes sense.

Recently, Crowdfund Insider discussed real estate crowdfunding with ArborCrowd co-founder and Managing Director Adam Kaufman. Our conversation is shared below.


You recently commented on the demise of RealtyShares. There have been others. Is this a harbinger for more closures or consolidations?

Adam Kaufman: In short, yes. All nascent industries face challenges as they become more established, and real estate crowdfunding is no exception. Now, nearly seven years after the Jumpstart Our Business Startups Act (JOBS) of 2012 made general solicitation possible in commercial real estate investing, we’re noticing the first real cracks starting to appear as platforms that fail to evolve or address their shortcomings start to fold.

This is because, following the passage of the JOBS Act, a number of tech entrepreneurs jumped at the chance to capitalize on this legislation by launching real estate crowdfunding platforms. However, the people running those platforms lacked the extensive industry-specific knowledge and experience in various market cycles necessary to succeed in the real estate industry. In my opinion, this is a critical cause for concern, especially given where we are in the current market cycle. While the industry has benefitted from (and only existed in) an extended upcycle, the general consensus is that we are at or near the top of the cycle and a correction is imminent. This is particularly concerning as many of the people operating real estate crowdfunding platforms have never invested in real estate during a downcycle. We see a number of investments on various crowdfunding platforms that are overpriced and being offered by inexperienced operators, and I expect this will lead to additional turbulence in the space. This does not spell doom and gloom for the industry though, as the platforms that are sophisticated, knowledgeable and responsible enough to make or enable smart investments will stand the tests of both time and shifting market cycles.

Did you look at RealtyShares portfolio?

Adam Kaufman: ArborCrowd is always looking at opportunities in the industry, but we cannot comment on any specific one. I can say that we’ve seen other platforms, including RealtyShares, offer investments that we’ve passed on because the math just didn’t work out after applying our rigorous underwriting process.

For example, if another platform presents a New York City deal projecting a 20 percent internal rate of return, we might have analyzed that same deal and determined the projected return to be only 12 percent.

In these instances, I believe it calls into question the practices these platforms are employing in predicting their returns, as well as the experience and skill of the people underwriting these deals.

You stated that “a lack of focus on real estate among platforms operating in the space” has undermined the sector. Please explain.

Adam Kaufman: Our industry is unique in that it represents the convergence of the tech and real estate sectors, but expertise in one does not directly translate to success in the other.

Technology is necessary to create the crowdfunding platforms and facilitate transactions, but it’s critical for those of us operating in the space to remember what our product is — real estate.

As I noted earlier, many real estate crowdfunding platforms that came into existence following the JOBS Act were launched by tech entrepreneurs who were touting and pitching their new technology to investors. The platforms that are still operating without a true focus on real estate at the core of their businesses are doing a disservice to both their investors and the industry at large.

It is irresponsible for an entrepreneur, with no true context of the nuances in the realm of commercial real estate investing, to assume he or she can correctly, responsibly and successfully source, underwrite and invest in deals for his or her investors.

You wouldn’t hire a financial advisor to give you nutritional advice, so why rely on a tech expert to procure successful real estate investments? This misappropriation is dangerous for investors and can be truly damaging for the industry.

Has there been too much hot money in the real estate crowdfunding sector? What about quality deals?

Adam Kaufman: I think you need to bifurcate money being invested by retail investors in actual real estate transactions from money being invested in the platforms themselves by venture capital firms.

By its nature, real estate is a long-term investment predicated on diversifying your portfolio and increasing wealth over time, so I’m not necessarily concerned about hot money in real estate crowdfunding. However, I do think there is an issue with platforms that are funded primarily with venture capital dollars.

These platforms have demonstrated hasty investing practices in the industry — particularly the platforms that are run by tech entrepreneurs, as the tech industry’s modus operandi, and the expectation of VCs, is very fast-paced growth. It’s an interesting dichotomy to see the VC and tech industry culture being applied to a long-term industry like real estate, and I think it necessitates a change in mindset for some platforms, as these approaches inherently conflict. Venture capital-backed real estate crowdfunding platforms have to show rapid growth, activity and trajectory to justify and sustain their VC funding.

This pressure can lead to irresponsibly investing in deals that may not be supported by the strongest fundamentals, and these practices can hurt investors and the industry in the long run.

There are a lot of quality investments out there, but at this point in the cycle, many deals are overpriced and unlikely to generate the kinds of returns most platforms are targeting. Taking a more patient, diligent and cautious investment approach can ensure that the investments you do make are poised to perform in any environment.

[easy-tweet tweet=”I do think there is an issue with platforms that are funded primarily with venture capital dollars #RealEstateCrowdunding” template=”light”]

Why is ArborCrowd different? What is your forté?

Adam Kaufman: We are the only real estate institution to launch a crowdfunding platform, providing investors with access to institutional-quality deals sourced from our exclusive network.

Our affiliation with The Arbor Family of Companies ensures that we have the depth of knowledge and institutional savvy to navigate the highly complicated real estate market and bring only opportunities that pass our high underwriting standards.

Our relationships allow us to identify and invest in deals that are not available to other crowdfunding platforms. We are one of the few real estate crowdfunding platforms to operate under the 506(c) model, which allows us to present just one deal to the crowd at a time.

While others are forced to rack up as much transactional volume as possible to show progress to key stakeholders, our structure ensures that we can focus on offering quality investments. We believe in each deal so much that we commit the capital upfront at closing, before syndicating equity positions to the crowd.

This practice promotes greater transparency, allowing us to produce incredibly in-depth due diligence materials to help our investors fully understand the risks and opportunities associated with each investment before they choose whether to commit their hard-earned capital.

[easy-tweet tweet=”We are the only real estate institution to launch a #crowdfunding platform, providing investors with access to institutional-quality deals sourced from our exclusive network” template=”light”]

Do you expect to see consolidation in 2019?

Adam Kaufman: I believe that 2019 will see some more platforms fail as opposed to consolidating. There are many reasons why a platform may cease to operate, but for many of the current players in the industry, they will not necessarily want to inherit the issues that come along with acquiring or merging with a failing business. The reality is that many in the space share the same investors. At the end of the day, the platforms with the best products – the strongest deals and best customer service – will be the ones to win the exclusive trust and business of those investors.

If a platform grows through consolidation, but cannot offer a good product to its suddenly larger investor base, it will quickly lose those investors.

That being said, there is still plenty that our peers who may be heading in the wrong direction can do to shift their practices and prevent the worst-case scenario. I strongly believe that real estate crowdfunding factors heavily into the future of real estate investment, and those of us who act responsibly and focus on making smart investments will remain while those who don’t will fail.

As such, I’m an advocate for increased responsibility and transparency in real estate crowdfunding and believe it is in the best interest of my responsible peers to band together for the long-term viability of the industry.

Any predictions on new models? Blockchain?

Adam Kaufman: New models will inevitably emerge, but for that to happen, changes must be made to the laws governing real estate crowdfunding. We’re currently operating in a regulatory environment that has been adapted to laws that were introduced many years ago, and as the industry continues to evolve, the law will have to similarly evolve to accommodate it.

As I see it, there are two scenarios in which these changes would be realized. The first is if enough bad actors behave so irresponsibly that it becomes a problem and causes significant pain for investors, legislation will be developed in response to protect both the industry and its investors.

These changes would obviously be detrimental to the industry.

Conversely, an abundance of success in the industry could lead to the creation of new regulations to take advantage of the newfound prosperity. These changes would hopefully be more positive to allow the industry to assist as many people as possible to achieve financial stability.

Regardless of which direction it goes, new models will certainly come to market to capitalize on what is still a tremendous opportunity.

On the topic of blockchain, I’m not sure that there is enough trust yet by investors to make it a compelling segment of the market.  That trust may come in due time, but the setbacks we’ve seen, and will likely continue to see, with traditional platforms will delay that trust from becoming widespread anytime soon.

What happens when the economy goes sideways?

Adam Kaufman: The good news is that the real estate industry and the economy as a whole have seen numerous cycles and many companies have thrived in both the ups and the downs.

The bottom line is that the companies that are making or facilitating impulsive, irresponsible investments in overpriced assets will end up hurting both themselves and their investors, while those that have exercised calculated restraint against overvalued assets will put themselves in a healthy position to weather a slowdown.

As I noted earlier, real estate is a long-term investment, and it’s generally considered to be less volatile than the stock market. Savvy platforms will be well positioned to take advantage of discounted pricing on high-quality assets during a downturn, creating additional value for their investors.

For individuals looking to invest in real estate through crowdfunding platforms, it’s important to be aware of the differences between platforms. To protect themselves, investors should devote the proper time to research not only the investments, but the platforms themselves to ensure the leadership teams driving investment strategies have experience navigating and successfully investing in real estate through multiple market cycles.

Patch of Land Adds Voice of Support for Real Estate Crowdfunding Sector Following RealtyShares News

Patch of Land, another early entrant in the real estate crowdfunding sector, has joined the growing chorus of platforms commenting on the demise of RealtyShares while expressing its confidence in the industry.

Patch, one of the very first online property finance platforms, started as a fix and flip site and then proceeded to add commercial and multi-family to its portfolio of offerings. Today, the vast majority of the investment offerings are under $2 million and many are short-term financing offers.

In an email, Patch management noted that competitors have pursued different strategies for growth and they have “been able to manage exceptional growth and build a track record of delivering high-yield, short-term investments opportunities to accredited investors.”

Patch assured its audience that, while the news about RealtyShares may be unfortunate, they remain steadfast in their ability to execute on their mission:

“As the industry continues to mature, there will be winners and losers in the space. We are proud of our disciplined growth as we continue to enjoy a healthy business. We are operationally sound, running a lean organization, closely managing expenses to deliver declining operational costs as a percentage of revenue as we continue to scale our business. We are excited for what the future holds at Patch of Land. We look forward to continuing to provide a consistent and reliable source of capital to our borrowers and attractive short-term yields for our investors.”

Patch notes that they have returned more than $200 million in principle and interest since platform launch.

“Patch of Land has developed a strong and fast-growing business funding almost 2,000 loans, exceeding $800 million in loan value on properties valued over $1.2 billion. Despite a highly competitive industry, we have experienced phenomenal growth over the past two years, reporting 98% growth in dollar volume from 2016 to 2017 and as of Q3 2018, 65% growth in dollars over the same period a year ago. We expect to finish [the] calendar year 2018 with a strong fourth quarter.”

While the news of RealtyShares intent to wind down is disheartening the growing voice of industry stalwarts willing to express their confidence in their operations are reinforcing the belief in the business model of real estate crowdfunding.

As RealtyShares Shuts Down, the Real Estate Crowdfunding Industry Ponders the Future

Earlier this week it was revealed that RealtyShares, a respected real estate crowdfunding platform that has originated just under $900 million in investment capital, was winding down operations. The turn of events was driven by the lack of available risk capital to keep the real estate platform afloat. Previously backed by big name VCs, these investors turned their back on the young company.

Founded in 2013 by Nav Athwal, RealtyShares had been a widely respected operation. As is in the case within any industry, there is plenty of background chatter regarding platforms and how they operate. Many people in the sector were surprised when RealtyShares collapsed as it was held in rather high regard.

It takes time for any new industry to gain sufficient traction to drive a profit. Real estate crowdfunding is no different and, as far as we are aware, no US-based real estate crowdfunding operation is currently driving money to the bottom line.

Yesterday, in the wake of the RealtyShares news, Charles Clinton, CEO & co-founder of EquityMultiple – another entrant in the crowdfunding real estate sector, felt compelled to differentiate his platform and reassure their investors.

In an email, Clinton said their approach has been and remains “distinct from our competitors.”

“At inception, we partnered with an established real estate capital markets firm, Mission Capital, rather than relying on funding from venture capital,” stated Clinton. “We remain focused on commercial real estate – the core of our expertise – because we have seen firsthand how institutional asset managers invest and grow effectively in this realm.”

Clinton assured everyone that EquityMultiple is on “strong financial footing” and the platform is committed to sustainable growth.

“We recently closed a successful funding round, led by notable executives in real estate and finance. These investors are aligned with our disciplined growth vision to expand thoughtfully, build the right team rather than the biggest, and emphasize scalable business lines. We strongly believe in the vision of offering institutional-quality commercial real estate to accredited investors. As with any nascent industry, success depends on execution and attention to detail. We remain steadfastly committed to getting these details right as we grow.”

Clinton says the industry has grown exponentially in the last few years:

“… we believe this trajectory will continue. With continued focus on the quality of our investments, asset management and customer service, we are well-positioned to grow with it.”

CI reached out to Amy Wan,  a former General Counsel at real estate platform Patch of Land, now a founder at Legaltech firm SageWise. Amy echoed Clinton’s sentiment almost exactly to the word. Wan believes that real estate crowdfunding still has “teeth.” Online investment platforms may be the new shiny but real businesses take time to grow. Once the glow wears off, that’s when execution, determination, and experience come into play. Online capital formation is effective and the future, but it is not a foregone conclusion for success within real estate, early stage, or any other Fintech vertical.

“I’m saddened to hear the news about RealtyShares, but the dream of real estate crowdfunding is still alive and well, especially with the new interest in tokenized real estate investments,” Wan stated.

Timothy Li, a Fintech veteran, a former employee of RealtyMogul and founder of multiple firms including the founder of Kuber Financial, had this to say:

“Real estate crowdfunding platforms provide access to a whole new class of assets to accredited investors that were never before available. Some of the commercial real estate crowdfunding platforms, such as RealtyMogul, were the first online platforms to provide access to multi-family, offices, storages etc . The investment hurdle is low so the idea of allowing millions of accredited investors to get a taste of commercial estate was genuinely attractive. However, these platforms such as Fundrise, Prodigy Network, Realt, Shares and the aforementioned Realty Mogul, all had issues convincing both sides of the platform (the accredited investors and project sponsors) to join up.”

Li says these platforms have always struggled to strike a balance between investor demand and deal flow. Investor acquisition sometimes runs into the thousands of dollars per investor. That’s a steep cost for a thin margin operation. Some of the real estate platforms are just too expensive (fees) for sponsors to list their project and make their traditional profit margins, says Li. Obviously, this is another sector challenge.

“The last issue is the promise of speed relative to the size of the deal,” said Li. “Smaller equity deals or mezzanine deals that are below $1.5 million have an easier time to raise. A deal could be fully pledged or over pledged within a few weeks. However, anything above $2 million dollars of an equity raise required a lot of good old cold calling from investor relationships department.”

Li believes that RealtyShares demise was due to several problems. First, it was the untimely departure of former CEO Nav Athwal.

“I won’t even venture to guess what might have happened after that,” Li shared. “But investor acquisition, deal flo, and today’s real estate environment probably have something to do with their demise.”

Li is of the opinion that the investment crowdfunding industry is here to stay – it’s just not going to happen over night:

“I feel like it’s still a little bit ahead of its times.”

Crowdfunding Real Estate Platform RealtyShares to Shut Down as Money Runs Out

RealtyShares, one of the more promising entrants in the once-hot real estate crowdfunding sector, is shutting down, according to several sources.

A write up in the RealDeal from earlier today said the investment platform had been unable to raise additional growth capital as investors failed to pony up and keep the platform alive. As it stands now, all investing activities will cease.

Reportedly, sufficient staff will be kept in place to wind down operations and manage existing portfolio needs but the prospects for the real estate platform remain grim.

An email which was distributed to site users explained:

“Over the past six months, RealtyShares aggressively pursued a number of financing options to continue growing the business.  Unfortunately, despite our best efforts, we were unable to secure additional capital. As a result, we will not offer new investments [nor] accept new investors on the RealtyShares platform.”

Over the past five years, RealtyShares raised over $60 million in venture funding – backed by big names such as Union Square Ventures, General Catalyst Partners, and Menlo Ventures.

According to the website, commercial real estate totaling more than $870 million was invested into more than 1,160 projects but what was apparently missing was sufficient scale to drive money to the bottom line.

It is almost one year ago exactly when RealtyShares founding CEO Nav Athawal left the firm he launched and handed over leadership to Ed Forst, former CEO of Cushman and Wakefield, as interim CEO – a job that eventually went to Alexis de Belloy.

At the time, Athawal stated:

“RealtyShares is in the strongest position it’s ever been in. The company is moving from the build phase to the scale phase of its lifecycle. To best position RealtyShares for the future, I made the decision to transition out of my role as CEO to a new role on the Board of Directors.”

Tore Steen, CEO of CrowdStreet a crowdfunding competitor, commented on the news that RealtyShares was shutting down operations, putting a positive spin on his platform:

“We were saddened to see the news about RealtyShares. It is common in rapidly evolving, disruptive spaces to see things like this happen as different business models are changing quickly. We are seeing a thriving crowdfunding market around commercial real estate here at CrowdStreet. We are growing fast, hiring across most teams and, in fact, just last week launched a new investment product. We could not be more optimistic about our approach to democratizing commercial real estate investing, and making it as easy and effortless as possible.”

Related: As RealtyShares Shuts Down, the Real Estate Crowdfunding Industry Ponders the Future


Airbnb Now Features RealtyShares as First Multifamily Financing Solution

 

RealtyShares, a leading online marketplace for commercial real estate investing, today announced it is featured by Airbnb as a financing resource in its Multifamily Properties Toolkit, which is described as a website that gives owners, operators, and developers of multifamily buildings resources to support long-term tenants who wish to share their space with travelers.

According to RealtyShares, landlords may now manage Airbnb activity in their buildings and share in the additional rental income with the Airbnb Friendly Buildings Program. As a result, multifamily property owners have become increasingly interested in helping their tenants improve and share their space on Airbnb. Jaja Jackson, Airbnb’s Director of Multifamily Housing Partnerships, stated:

“Home sharing is good for landlords, good for tenants and good for travelers. Adding home sharing as an option is just another way buildings can attract and retain tenants.”

RealtyShares also reported it excels at financing unique opportunities and emerging concepts, including multifamily development projects that offer long-term rentals units that can be easily shared with travelers. Traditional capital providers do not usually participate in this sector. The real estate platform raises capital for these projects through a mix of institutional funds and capital from accredited investors investing through its platform. Bill Lanting, Vice President of Debt Originations for RealtyShares, also commented:

“RealtyShares’ biggest strength is our non-traditional mentality. Landlords are increasingly interested in offering home sharing as an option for their tenants. We see a big opportunity to create value for the multifamily housing community by financing properties that are adopting this model.”

RealtyShares added in 2017 it helped finance more than 80 multifamily properties from Miami to Phoenix, each going through an extensive due diligence process by their experienced team to ensure it met the company’s rigorous standards. These complex and creative financing opportunities make up the core of the platform’s investment marketplace, which has deployed more than $700 million dollars across over 1,000 projects in 39 states.

RealtyShare’s Latest Survey Reveals Many Americans Believe Commercial Real Estate is Critical to Improving Local Communities

RealtyShares, an online marketplace for real estate investing, announced on Wednesday the results from its Commercial Real Estate Investing Survey, which was conducted online among over 2,000 U.S. adults in December 2017 by Harris Poll on its behalf. The results revealed that many Americans believe commercial real estate is a catalyst for improving local communities. While sharing more details about the results, RealtyShares stated:

“The survey found that a quarter of U.S. adults (25%) felt commercial real estate investment has the biggest impact on enhancing the reputation of a community. Roughly 1 in 5 of those who have or are currently investing in commercial real estate have done so for reasons that may support their community, like helping a friend or family member with capital for a commercial real estate investment (20%) or needing a facility for their own business (17%).”

The survey also revealed that 53% of Americans would invest in commercial real estate within their communities if given a chance. For those who have never invested in commercial real estate, affordability and access were the major roadblocks. 61% percent also believe they lack the necessary funds, while 19% don’t know how to invest. This may be creating an investing gap, as nearly 9 out of 10 Americans (89%) have never invested in commercial real estate.

“Millennials appear more eager to tap into this multi-billion dollar asset class than some older adults. The survey found 67% of Americans ages 18-34 would invest in local commercial real estate if given the chance (compared to 45% of adults ages 45+). The biggest hindrance to commercial real estate investing, according to millennials, may be the perceived lack of opportunity. Seventy-one percent want investing in these type of properties within their community to be easier, and 62% are looking to their local government to attract more commercial real estate investment.”

Edward Forst, CEO of RealtyShares, then added:

“People clearly see commercial real estate as a driver to a healthy, thriving community, and they’re interested in participating. RealtyShares can bridge the gap between interest and participation. Our platform allows investors the opportunity to participate in quality real estate projects across the nation.”

RealtyShares Releases 2017 Year in Review (Infographic)

Real estate crowdfunding platform RealtyShares took a look back at 2017 with its Year-in-Review. While sharing details about the past twelve months the funding portal revealed:

“Disruption in the commercial real estate industry hit a fever pitch in 2017. We saw a change in the tax code, an increase in funding for real estate technology companies, and a shift in business models from traditional commercial real estate firms as they adapted to the sharing economy – just to name a few. RealtyShares continued to gain momentum as a leading real estate technology company serving a growing audience of investors and real estate partners. In the last four years, we have deployed over $700 million to more than 1,000 real estate projects in 39 states. In 2017 alone, investors made 18,000 investments on the platform and received $23 million in earnings.”

RealtyShares also stated in 2017 it raised $28M in Series C financing, sold its residential debt origination business to Lima One, and welcomed Ed Forst as CEO. The platform noted that these milestones have given it momentum coming into the new year. It then added:

“2018 is poised to be an even bigger year of change. Commercial real estate investors and sponsors are faced with changing tenant dynamics and customer demographics along with a growing need for more data. RealtyShares is well positioned to help investors capitalize on these changes and help our real estate partners finance more projects than ever before.”

See RealtyShare’s 2017 Year-in-Review infographic below.

Nav Athwal Exits CEO Role at RealtyShares

 

Nav Athwal, one of the more prominent founders in the real estate crowdfunding space, has announced his decision to step down from the CEO role at RealtyShares, a platform he founded four years ago. RealtyShares has raised over $500 million for real estate projects making it one of the largest sites of its kind in the US. To date, RealtyShares has returned over $80 million to investors from more than 1000 projects. Registered users now number more than 120,000. Big name VCs backed the crowdfunding platform helping to fuel the company’s rapid growth in a sector of alternative finance that has become increasingly competitive.

Athwal has been widely recognized as an adept manager with the skillset and horsepower to grow the innovative platform. Athwal was class valedictorian at UC Berkley Law School and had previously been active in the real estate industry before he launched the online investment site.

Ed Forst, RealtyShares Board Member and former CEO of Cushman and Wakefield, has been selected as the interim CEO while the company searches for a permanent replacement. Forst released a comment on the executive change at RealtyShares;

“RealtyShares is a special company. In my thirty-five year career, I have not come across an organization of this size with as much talent leading change of this magnitude. When Nav asked me to join the Board of Directors, it was the team and opportunity to change the real estate industry that inspired me to be part of this company’s journey. I am honored to take on the role of interim CEO, while Nav, the Board, and I search for our permanent CEO. I look forward to continuing to drive Nav’s vision and supporting the culture that he built inside the company.”

Crowdfund Insider spoke to Athwal regarding his decision to change his leadership role at RealtyShares and he explained he would continue to be engaged with the company;

“RealtyShares is in the strongest position it’s ever been in. The company is moving from the build phase to the scale phase of its lifecycle. To best position RealtyShares for the future, I made the decision to transition out of my role as CEO to a new role on the Board of Directors. I asked Ed Forst to take on the role of interim CEO, while we look for a permanent CEO who will fit the culture and profile we’re seeking. I am still very much a part of RealtyShares and will be actively involved in strategic decision-making. I am looking forward to supporting the company in this new capacity and getting back into principal real estate investing and agribusiness. As I begin to work on additional projects, I will be sure to let you know.”

This morning, Athwal published a note on the RealtyShares blog announcing his departure. His statement is republished below.

I started RealtyShares four years ago with the idea of creating a company that would make real estate more accessible, efficient, and transparent. RealtyShares has come a long way since those early days in my living room. It is now a 100-person operation and the leading platform for online real estate investing and capital formation.

None of this would have been possible without the people at RealtyShares. We’ve accomplished so much; the strategic decision to focus on the commercial middle market, our successful round of Series C financing, and the strengthening of our data science capabilities are just a few of our many accomplishments in 2017.

My primary focus has always been to best position RealtyShares for future success. RealtyShares is now at an inflection point. We’re moving from the build phase to the scale phase of our company’s lifecycle. It is for that very reason that I’ve decided to transition out of my role as CEO of RealtyShares and make way for a seasoned CEO who can scale the company and lead it into its next chapter. While we identify the best long-term CEO of RealtyShares, I have asked Ed Forst, Board Member and former CEO of Cushman and Wakefield, to serve as interim CEO and lead day-to-day operations. I will remain on the Board of Directors supporting the company as it continues on its journey to build a global marketplace for real estate investing.

The future of RealtyShares is incredibly bright. I’m grateful and humbled to be surrounded by this incredibly talented team. I look forward to watching and aiding the company in its continued growth as it transforms the real estate industry for the better.

Nav

 

Real Estate Crowdfunding Platform RealtyShares Finances Several Commercial Properties in Texas

Real estate crowdfunding platform RealtyShares announced last week it has financed several commercial properties in Texas. The funding portal revealed that a total of $10.1 million was raised for Sheraton DFW Airport Hotel and Texarkana Multifamily Portfolio.

RealtyShares reported that it secured $2.4 million equity investment for a 302-room, full-service Sheraton hotel in Irving, Texas. The property is just 15 miles from downtown Dallas and includes three restaurants, 23 banquet and meeting rooms, and one of the largest event spaces in the area. The hospitality equity transaction was sponsored by The Buccini/Pollin Group (BPG). Brandon Flury, vice president at Buccini/Pollin, stated:

“BPG is excited to partner with RealtyShares on our acquisition of the Sheraton DFW. RealtyShares’ knowledge of and track record within the Dallas market provided an efficient and seamless capital raising execution for us. We appreciate and value the institutional-quality team of real estate professionals assembled, technological sophistication and infrastructure employed, and overall growth of the platform, and look forward to expanding our relationship together on future opportunities around the country.”

Akshay Verma, associate director at RealtyShares, also commented:

“RealtyShares has been active in hospitality financing and continues to seek out quality real estate companies in that sector that operate in primary markets like Dallas. Buccini/Pollin has a strong reputation in the hotel industry, and we’re excited to be developing a long-term relationship with such an experienced and trusted hospitality sponsor.”

Meanwhile, RealtyShares recently also closed over $7.7 million in loans on a portfolio of seven multi-family properties, many of which are located in or around Texarkana, Texas. The debt capital, structured as individual bridge loans, was raised both from institutional partners and from individual investors on the crowdfunding platform. Nick Fletcher, director of commercial debt originations at RealtyShares, added:

“This collection of properties is a testament to our capacity to fund projects in markets both large and small. Our platform provides the flexibility to fund deals even in relatively smaller towns where traditional lenders may be constrained. For the Texarkana portfolio, we were able to creatively structure our financing in a way that achieve the sponsor’s objectives.”

RealtyShares Raises $28 Million During Series C Funding Round

RealtyShares announced on Thursday it raised $28 million during its Series C funding round, which included participation from Cross Creek Advisors, Danhua Capital, Barry Sternlicht (Founder of Starwood Capital and Starwood Resorts) and Bow Capital, along with prior investors Union Square Ventures, General Catalyst Partners, and Menlo Ventures.

The real estate marketplace platform claimed it has emerged as one of the industry’s most diverse real estate investment platform, deploying $500 million across more than 1,000 real estate opportunities in 39 states, as of this summer. The portal has more than 120,000 registered users and has a growing list of institutional partners. Now, RealtyShares stated it is bringing its technical excellence to bear on scaling full capital stack commercial solutions, with over $242 million deployed across more than 120 commercial debt and equity projects in the last year alone. RealtyShares Founder and CEO, Nav Athwal, revealed:

“In a few short years we’ve developed a thriving marketplace, giving developers a fast and flexible capital source, while offering individual and institutional investors unprecedented access to high quality investments. Middle-market commercial real estate comprises the majority of commercial real estate transactions, but it’s one of the last frontiers to be disrupted by technology. The new partners we’re bringing on in this round have significant experience transforming old industries, and can help us deepen our focus on the severely underserved commercial financing market.”

RealtyShares also noted that the investment brings the pioneering startup’s total capital raised to-date to $60 million and adds (among others) four new investors. Cross Creek Advisors Managing Director Tyler Christenson, added:

“We have watched data and technology transform a broad range of industries, and RealtyShares is reinventing the way in which real estate investments are traditionally made. In our diligence, we identified RealtyShares as a leading disrupter in virtualizing real estate transactions into a democratized marketplace.”

Former Acquire Real Estate CEO: “When We Decided to Sell the Company, it Became Apparent that RealtyShares Was the Right Choice”

Last month, Real estate crowdfunding platform RealtyShares announced it acquired technology-first, marketplace platform Acquire Real Estate. The funding portal described Acquire as an innovative rival that has set a bar for product development within the industry. The company focused on developing industry-first products to serve its commercial sponsors and investors, keeping the platform at the forefront of innovation despite better-funded rivals.

At the time, RealtyShares founder and CEO Nav Athwal, stated:

“RealtyShares and Acquire share a vision that technology will make real estate investing easier and more accessible, uniting bold thinkers to set an innovative tone for the industry. Josh and Gerry are a perfect culture fit for our company. They bring the intuition, tenacity and experience we need to remove friction from the real estate investing process and help RealtyShares redefine this industry.”

Now, less than 30-days later, Director of Business Development at RealtyShares and former CEO of Acquire, Josh Klimkiewicz, is sharing more details about the acquisition. In a recent blog post, Klimkiewicz stated:

“When we decided to sell the company, it became apparent that RealtyShares was the right choice. We had built something great but required a partner that could take the technology Acquire had developed and really bring it to the next level. Like RealtyShares, we believe that technology will make investing in real estate and raising capital for projects easier and more accessible. RealtyShares not only shares our vision but has excelled at bringing it to life. It is a company with tremendous leadership, a dominant position in the market and one that is built for long term success.”

He also revealed:

“The mission doesn’t end here. I will join the RealtyShares team as the director of commercial business development to lead that channel as RealtyShares continues to scale. In my new role, I will concentrate on building long-term relationships between RealtyShares and real estate owners across the country.  These relationships are important to the vision I mentioned earlier – a world where real estate sponsors have almost instant access to capital and investors can invest in vetted opportunities anywhere. I’m excited to leverage my years of industry experience to continue furthering this goal.”

He went on to add:

“I’m most excited, however, to join RealtyShares and become part of the team leading the charge to evolve the real estate landscape through technology. I know RealtyShares is the best landing place for our users, our technology and me. Together we can grow the company and build an environment where sponsors and investors can make better decisions and transact more quickly through a seamless, transparent and data-powered, user-friendly system.”

 

RealtyShares Announces Acquire Real Estate Acquisition: Seeks To Accelerate Next Phase Of Innovation

Real estate crowdfunding platform RealtyShares announced on Thursday it has acquired technology-first, marketplace platform Acquire Real Estate. RealtyShares describes Acquire Real Estate as an innovative rival that has set a bar for product development within the industry.

According to the funding portal, Acquire Real Estate was led by CEO Josh Klimkiewicz and CTO Gerry Polucci. The company focused on developing industry-first products to serve its commercial sponsors and investors, keeping the platform at the forefront of innovation despite better-funded rivals. It was also the first real estate marketplace to introduce a real estate exchange, investor profiles, a dynamic investment calculator and self-directed IRA investing. Speaking about the acquisition, RealtyShares founder and CEO Nav Athwal, stated:

“RealtyShares and Acquire share a vision that technology will make real estate investing easier and more accessible, uniting bold thinkers to set an innovative tone for the industry. Josh and Gerry are a perfect culture fit for our company. They bring the intuition, tenacity and experience we need to remove friction from the real estate investing process and help RealtyShares redefine this industry.”

Klimkiewicz also commented:

“Like RealtyShares, we saw a real opportunity to use technology to close the gap and create a better process for raising capital. We targeted commercial equity day one, specifically middle market projects with equity checks between $5 million and $10 million, recognizing that there was just no efficient way for institutions or investors to participate in those types of deals without innovative solutions. By taking the time to understand our community, we were better able to address needs and build products that truly solved problems.”

Polucci added:

“I saw a lack of audacity. Technology can transform our industry, but people with real estate backgrounds saw complex problems in their industry as intractable. Our team possessed a unique perspective, which allowed us to identify and tackle those challenges directly.”

Both Klimkiewicz and Polucci reportedly will join RealtyShares as part of the acquisition, spearheading integration from the company’s East Coast office.

RealtyShares Appoints Kristina Wallender Senior Vice President of Marketing

Real estate crowdfunding platform RealtyShares announced on Thursday it has appointed Kristina Wallender as its new senior vice president of marketing. According to the funding portal, Wallender has both marketplace and marketing leadership experience spanning large enterprise businesses such as Amazon and early stage companies like Ticketfly, where she was the head of marketing for the past four years.

Speaking about Wallender’s appointment, Nav Athwal, founder and CEO of RealtyShares, stated:

“Kristina’s marketing acumen is unquestioned, but she also brings a rare mix of qualities to RealtyShares that will make her an invaluable asset across all facets of the organization. Kristina has exhibited exemplary leadership to scale marketplaces at companies of all sizes, and we are tremendously excited to welcome her to our leadership team.”

Wallender also commented:

“RealtyShares has a tremendous opportunity to make real estate investing easier and more accessible. We’re breaking down barriers in the industry for investors and delivering a vastly improved financing experience for borrowers. We want to make investing in real estate is as easy as buying stocks.”

RealtyShares reported along with Wallender it has added Vartika Ambwani, who joined as RealtyShares’ director of investor operations and Barbara Silvermann as the director of residential mortgage operations. The platform added since January 2017, more than one-third of all new hires have been female, and all three leadership hires have been women, bucking the standard within the real estate sector which has historically lacked diversity across the leadership spectrum.

RealtyShares Reports “Largest Commercial Debt Transaction to Date”

Real estate crowdfunding platform RealtyShares is reporting they have closed on the platforms largest commercial real estate debt transaction yet at $11.9 million. The deal was structured to include funding from RealtyShares’ institutional investor network as well as its crowdfunding marketplace.

The funding was for the acquisition and partial recapitalization of a 10-property portfolio of student housing in Seattle, WA, located within 1.5 miles of the University of Washington, a campus of 54,000 students.

“We are very pleased to have provided financing for the Seattle Student Housing Portfolio,” said Anthony Dagati, Director of Commercial Real Estate Debt Originations at RealtyShares. “RealtyShares was able to leverage its institutional capital relationships, together with its growing accredited investor base, to provide $11.9 million of structured debt–our largest Commercial Debt raise to date—in a tight timeframe. We hope to close many similar transactions nationwide in 2017.”

RealtyShares said this specific deal highlights its ability to offer a diverse asset class to investors while providing a “nimble and creative approach to sourcing capital.” RealtyShares said the majority of the total loan was contributed by one of their private equity partners. The platform then was able to offer its network of accredited investors the opportunity to participate in the debt transaction.

To date, the RealtyShares network of investors has funded approximately $300 million across more than 550 investment opportunities on the platform for real estate projects in 35 states.

RealtyShares Appoints Former CEO of Cushman & Wakefield Edward Forst As New Board of Directors Member

Real estate marketplace lending platform RealtyShares announced on Thursday that Edward Forst, former president and CEO of Cushman & Wakefield, was named the newest member of the company’s board of directors.

Ed Forst, president/CEO of Cushman & Wakefield, 3/14/15. Photo by Chris Lee

According to RealtyShares, Forst oversaw 16,000 real estate professionals in 60 countries at Cushman & Wakefield. He joined the firm after 16 years at Goldman, Sachs & Co., Where he held multiple leadership roles included global chief administrative officer, global co-head of the Investment Management Division and membership on the firm’s Global Management Committee. Speaking about his appointment to the board, Forst stated:

“After leading capital markets and investing businesses empowered by the finest tech teams, it was a shock to see how starved real estate has been for technology advancement. People didn’t think technology could penetrate real estate, but more and more it is finding its way into key markets and RealtyShares is at the forefront of that infiltration. With a sophisticated team of professionals at the helm, both CEO Nav Athwal and Chief Credit Officer and former Head of Risk at Citi Mortgage Arash Sotoodehnia understand that our company is going to be measured by the marriage of sourcing power, underwriting expertise and technology-powered execution.”

Athwal also commented:

“Ed has a perfect mix of operating experience, as CEO at Cushman & Wakefield, and tremendous connections in the capital markets world owing to his time at Goldman Sachs. Not to mention he is a great mentor and strong believer of what we’re doing here at RealtyShares. Our company sits at the intersection of technology, real estate and capital markets, so Ed is going to be a pivotal board member and can help strengthen the legitimacy of our business model with lenders, institutions and other high-powered real estate incumbents.”

Forst then added:

“Capital markets have been at the core of my career and what small and medium-sized institutional investors have lacked is a trusted, highly-selective sourcing and execution engine for real estate. It has been very cumbersome to identify two or three primary originators and toggle a spotlight onto the best opportunities for you. That is one of the powerful aspects of RealtyShares. We are about helping you target and efficiently mine the right real estate opportunities pre-screened with a high caliber underwriting process.”

Forst will also be a member of the RealtyShares advisory board.

De Rito Partners Raises $800,000 on RealtyShares For Arizona Shopping Center

Real estate marketplace lending platform RealtyShares announced on Thursday Arizona retail investment and brokerage firm, De Rito Partners, secured $800,000 through its platform for a Mesa-base shopping center. According to the funding portal, De Rito Partners acquired the property last year and is looking to capitalize on a temporary tenant turnover of the former fully-leased retail property. Iver Bowden, Partner at De Rito Partners, stated:

“Raising capital can be time consuming, but RealtyShares has allowed us to outsource the equity raise in order to more efficiently match opportunities with costs. We were able to raise sufficient capital in a short amount of time, complementing our typical partnership-based financing strategy. We are attracted to grocery-anchored retail properties in today’s market. This property is anchored by a top grocery store in the area, and we were able to acquire it at a favorable cost due to a recent vacancy in a historically well-occupied space.”

Brian Esquivel, Senior Director of Commercial Equity Investments at RealtyShares, also commented:

“We have been selective when investing in the retail space. This opportunity presented by De Rito Partners checked all the right boxes for us. We had a very experienced local Sponsor, a service-oriented neighborhood center, and a market leading grocery as an anchor. We are always on the look-out for similar opportunities and look forward to many more with De Rito.”

De Rito Partners owns 20 properties, manages approximately 1.9 million square feet of retail space, represents 180 shopping centers in a leasing agency capacity, and is currently developing a Fry’s Marketplace-anchored shopping center and a strip center located in Chandler, AZ. The firm added the funds raised through RealtyShares to invest in tenant improvements and implement a leasing strategy to achieve market-level rents.

RealtyShares’ Latest Survey Reveals: Americans May Not Know Which Investment Types Have Performed Best in Real Estate

Real estate marketplace lending platform RealtyShares, announced on Thursday findings from its new Real Estate Investing Survey, which was conducted online among over 2,000 U.S. adults in March 2017 by Harris Poll on its behalf. The report revealed Americans’ interest in real estate investing.

According to RealtyShares, the survey finds that 40 percent of Americans aren’t sure what type of investment has performed the best since 2000 when asked to choose among stocks, real estate, commodities, bonds, cash equivalents such as oil, gold and cotton, and other. One-quarter of Americans (25%) thought that stocks have been the top-performing asset class since 2000, while only 16 percent of Americans believed it has been real estate. Among the remaining asset classes, 9 percent believed commodities have performed the best, 6 percent chose cash equivalents, while 3 percent of those polled thought bonds have performed the best.

RealtyShares also noted that since 2000, real estate has outperformed the stock market approximately 2:1, returning 10.71 percent annually compared to a 5.43 percent annual total return with the S&P 500 Index (range from December 31, 2000 – December 30, 2016). The online lender shared that the S&P has had the advantage more recently, but both markets have recovered well with the S&P posting a 12.65 percent annual return since 2010 compared to a 11.37 percent annual return for real estate (range from December 31, 2010 – December 30, 2016). Keep in mind historical returns may not recur or be achieved in the future.

Speaking about the report’s findings, Nav Athwal, CEO of RealtyShares, stated:

“Real estate returns have kept pace with or even exceeded certain investment options in the past and, yet, 85 percent of Americans aren’t taking advantage of the opportunity to invest in this asset class. Risks are inherent with all investments, so diversification is important for any investor’s portfolio. That the majority of Americans haven’t tapped into real estate can speak to the lack of access that has been inherent in the industry for a long time.”

RealtyShares also explained:

“When it comes to America’s appetite for investing in this asset class, the survey shows that 48 percent of Americans would be more likely to invest in real estate if there were technology available to make the process easier, and that number grows to 63 percent among millennials (18-34).”

Other findings from the survey include:

  • Roughly two-thirds of American men and women agree that flipping a home is a good way to make money (64 percent of men and 68 percent of women).
  • Men are more likely than women to think they would be able to complete a home flip (44 percent compared with 31 percent).
  • Adults ages 35-44 are more likely than those ages 45+ to think that flipping a home is a good way to make money (77 percent versus 60 percent).

Athwal then added:

“Residential real estate as an asset class is a $29 trillion market, and the commercial sector adds another $10 trillion. Over the last ten years, we’ve seen an application of technology to real estate to make it easier for homebuyers to research properties, and open up real estate investing to a much wider audience. The next wave of tech companies, such as RealtyShares, has the potential to fundamentally alter the way in which we transact within this industry — making it easier for someone to raise capital, get a loan or efficiently put that capital to work as part of a larger investment portfolio. Our vision is to continue closing the gap between the way people invest in the stock market and the real estate market.”