Real estate crowdfunding platform PeerRealty is set to unveil their new exchange, Crowdfunding CrossMarkets (CFX), in January 2016.
The exchange will look to provide an open market for secondary-market transfers, and anticipation is slowly building with several crowdfunding platforms already signed up for offerings.
PeerRealty, an organization focused on the real estate crowdfunding space, developed the exchange in response to the issue of liquidity in private markets, with private investors often tied to a deal for up to 10 years. The organization began the development of CFX last year in response, as a cross-industry platform where investors may sell crowdfunded assets to retail investors, and people could buy on the secondary market.
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“It’s the asset that’s easiest to understand and price,” said head of marketing Daniel Kelly. “You can get a room full of investors to agree on value of a building, harder when it’s a start-up company. The pricing mechanism becomes very attractive to secondary market where you need to price.”
The CFX will be an open framework, and will have the functionality to be integrated into partner portals where investors may click through the same site to access the exchange. Alternately, a standalone site may be used where investors can log on and interact directly with the exchange.
When it comes to competitors, PeerRealty found there weren’t many existing online marketplaces or exchanges, particularly for alternative investments.
“There are grey markets that exist offline but we’re taking that experience online to create an open and transparent platform where people can make intelligent decisions,” added Mr. Kelly. “We think it should be as easy to buy or sell shares of any crowdfunding entity as it should be to buy Microsoft or Google stock.”
https://www.youtube.com/watch?v=-5VGNXkzk4I
Mr. Kelly doesn’t see the new service as a threat to existing markets, and in fact sees it as a complementary add-on, with the option of liquidity set to help other industry players grow their user bases.
Enthusiasm and encouragement has been widespread across the industry, with individual platforms like PropertyStake, CrowdFranchise and of course, PeerRealty on board to participate in the exchange.
Investors looking for added portfolio diversification should keep a close eye on CFX come January.
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