West Orange, NJ —The Industrial and Office Real Estate Brokers Association of the New York Metropolitan Area (IOREBA) recently hosted its Fall Kick-Off Event to a group of industry experts eager to learn about the night’s topic: Crowdfunding for Commercial Real Estate.
Moderated by Greg Brown, managing director, NAI DiLeo-Bram & Co., the panel featured commercial real estate crowdfunding experts William Florent, founder of Selequity and Brian Esquivel, director of investments at Realty Shares; along with commercial real estate veterans who have had recent success in using these platforms, Stephen Cassidy, president of Denholtz Associates; and Jason Bogart, owner of Accordia Realty Ventures.
There is a mystery surrounding crowdfunding and how it works. The platforms for the commercial real estate industry are much different from a typical Kickstarter platform, which deals in products rather than in equity, and are essential online marketplaces for owners and investors.
“Essentially, we are doing marketing for real estate companies—bringing sponsors and investors together and helping them get access to equity,” commented Esquivel. “Historically, real estate professionals have a county club mentality, but with these new platforms we are assisting them in expanding their networks,” he added.
“It is a very transparent technology,” added Florent. “All of your real estate documents are online, and owners and investors can see what is going on at all times.”
Steven Cassidy shared that his company is entering into its third crowdfunding investment, and just last year raised about $800,000 in equity on a crowdfunding platform, which helped acquire and reposition an office building in Florida.
“These platforms allow you talk directly to investors, and I like that,” said Cassidy. “Investors; however, are not typically real estate investors, making them sometimes slow to make decisions. But, in the long run, if you don’t use these platforms in our industry, I think you will be left behind,” he added.
Crowdfunding is slowly emerging as a new technology platform for real estate investment firms. Panelists agreed that it hasn’t yet caught the attention of large businesses and that the concept needs more exposure and belief amongst potential users.
“It is on companies like us that are using crowdfunding, to perform and show our industry that it works, and when the big guys see the results they will see that it is great to have another line of equity for deals,” said Bogart. “So far, we’ve had moderate success in this sector. In the long-term, I feel like it is going to be a great vehicle for us,” he added.